Performance Optimization and Measurement
Eliminate bottlenecks and maximize production through this systems-based approach.
By Alan Malo
Throughout my career in the aggregates industry, I’ve had the good fortune of constantly encountering new operational challenges. Over time, I have developed some techniques I use each time I assume responsibility for an underperforming process, site, or company. The very first step I take is to interview key staff. I ask very simple questions about performance, processes and personnel. An encounter I had with a site manager (SM) several years ago stands out because it precisely cut to the heart of the issues at this particular site.
Me: What are the major causes of downtime in this operation?
SM: We don’t have any.
Me: Excuse me? You mean to tell me that this facility has no downtime?
Me: I find that hard to believe.
SM: It’s true. Any time something breaks, we just shut the whole operation down and perform maintenance. No downtime.
If you have been involved with continuous improvement efforts in your company, you may have had a similar encounter. The site manager I referred to above was a veteran employee with a strong work ethic and was as honest as they come. The issue was that no one ever introduced him to performance optimization or performance measurement (metrics). These ideologies would have enabled him to access his operation and make changes that would be beneficial and profitable. He had what I call, ‘calibrated fingertips’. He used his gut and intuition to make decisions about his operation. That is a recipe for disaster.
What is performance optimization?
“An ounce of performance is worth pounds of promises,” Mae West, American actress
Performance optimization is the process of optimizing a system based on its current operational limitations. This process also highlights bottlenecks in an operation that may limit its performance potential. Performance optimization enables operational teams and companies to maximize their profit and minimize their waste. Specifically, it will help organizations to:
• Balance production, sales and inventory;
• Improve yield of demand products;
• Reduce waste;
• Reduce surplus and by-product yield;
• Reduce unit cost of production;
• Increase production rate; and
• Improve profit.
What is performance measurement?
“If it can’t be expressed in figures, it is not science; it is opinion,” Robert Heinlein, American author
Performance measurement is a means to access the effectiveness of current state, determine the gap between actual performance versus targeted performance, and determine the productivity (or efficiency) of an operation. These metrics can be almost anything. Some important guidelines to remember when establishing operational metrics are:
• Don’t choose too many metrics. Remember that less is more here.
• The metrics you choose should easily communicate your goals.
• Tailor the metric for each employee, group, or natural work team.
• Remember that these metrics will evolve over time. Once you accomplish a goal, the metric used to measure that goal may no longer be relevant. New goals may require new metrics.
• Conspicuously display metrics to the workforce so they can be seen by all members of the team during normal work shifts.
• Update metrics daily. If you don’t update your metrics daily, you risk sending the wrong message to your team.
Some examples of operational metrics include:
• Uptime (availability);
• Load counts;
• Tons of ASTM 57 stone made each day; and
• Number of defects.
WHAT DOES A PERFORMANCE OPTIMIZATION PROJECT LOOK LIKE?
“Tell me and I will forget, show me and I may remember, involve me and I’ll understand,” Chinese Proverb
The first and most important step in beginning a performance optimization project is to involve the right people in your organization. This team should include all the stakeholders involved, as well as change agents and/or specialists from different areas of the business. It is important to identify employees who are recognized as leaders and known for their ability to create a good rapport with their co-workers. For example, the team may be comprised of a sales manager, business analyst, operations manager, lean manufacturing expert, and a quality control professional. Finding the right mix of personalities and experts during this phase is a critical factor to achieving success.
The next step in your performance optimization project is to build a process model. There are several simulation tools available, it doesn’t matter which one you use. Be sure to accurately model your plant’s current state. I recommend that you conduct sampling and other field tests to help determine the current state. It is also important to be able to select your particular equipment in the simulation, which will allow you to model production and flow rates as accurately as possible.
Next, identify the various production modes that your plant is capable of operating. For instance, you may decide to maximize asphalt products, or you may choose to maximize concrete products. I have seen plants with well over one hundred possible modes. If your plant has multiple modes, choose the top five to 10 modes that account for 80 percent of total production.
Now you are ready to set targets and goals. Crushers, screens, feeders, etc., all have specifications and recommended production rates. Due to the inevitable variances in deposits and the chemical and physical properties of stone, I recommend that you discuss your targets with your OEM (original equipment manufacturer) to ensure that your goals are realistic and will not damage your equipment.
Now you know your actual operating state and your designed capacity for the operation. This is where the team starts earning its keep! The team can begin working to understand why the gaps exist in operational performance, i.e., the difference between actual and design capacity. Hold regularly scheduled brainstorming sessions that include all the stakeholders to get to the root causes of the delta between actual and targeted performance.
Once your team generates a list of ideas, you may find that bottlenecks exist that prevent your targeted performance, or you need to modify the operation’s existing processes. You will want to make these changes, update your model, measure the results, and adjust your plan as necessary to account for these changes in the operation. Remember that this is an iterative process, but each time another change is made, you will be closer and closer to achieving your targeted performance goals.
“We are what we repeatedly do. Excellence, then, is not an act, but habit,” – Aristotle
Arguably, the hardest part of the entire process is securing ownership from the workforce. Once achieved, this will empower them as individuals and as a team to sustain and continue the iterative improvement process you have begun. Do your best to maintain the positive momentum with regular team meetings, status review updates, and performance reviews. Last, but not least, make sure you take the time to celebrate your successes and to recognize the team’s efforts.
Hopefully, these steps will provide your organization with a roadmap for effective performance optimization in all areas of your operation and become second nature.
Alan Maio is principal of Orria Consulting, and has spent more than two decades as a senior manager and change agent leading performance optimization strategies and plans in the aggregate and building materials industries. He can be contacted at firstname.lastname@example.org.