Page 38 - TPM A Route to World-Class Performance

Assessing the true costs and benefits of TPM 19

Table 2.2 Company-wide loss avoidance focus
Cost area Typical causes of hidden cost
Availability Performance Quality

Material W Late receipt H Material Manufacturing
Preparation losses characteristic/ imperfections
tolerance W Environmentall
weaknesses customer usage
Planned waste conditions
Transformation Supply Equipment idling Process
failure/penalties Tooling designs deterioration
Disposal losses W Human error
Equipment H Breakdown W Minor stops Rework
operating Set-up and W Reduced speed Start-up losses
adjustment losses
Management H Lackof Door-to-door losses Logistics losses
orders/resources Non-added value (not on time in full)
Planned activities Equipment/
shutdowns and product
unused capacity management
losses

an internal rather than customer-focused perspective which stifles
innovation;
individual rather than team-based motivation which discourages idea
sharing;
political rather than effective management where presentation and image
are as important as results.

This ignores the need for learning, assuming that one-off, quick-fix solutions
are possible and that they are easily implemented.
The key to challenging this assumption is a clear understanding of how
manufacturing costs really behave. The loss model provides such a picture,
allowing management to make accurate predictions of the impact of strategic
options.
Following on from the theme presented in Chapter 1, the model recognizes
that a reduction in equipment loss is only part of what TPM can deliver.
Management, material and transformation losses can be reduced, to transform
operations in a way which touches all functions - making it an effective
integrator of company-wide continuous improvement.
This opportunity will be missed with the simplistic cost-down focus or
traditional management thinking.

2.2 The management challenge
Company-wide loss reduction provides the opportunity to: