Based on the character of 16 major losses mentioned in the previous article, JMAC would like to introduce Loss Improvement Steps, utilized in actual Kaizen/Improvement projects.

In some companies, the 16 major losses might not fit perfectly. Losses are opportunities to identify problems and implement improvement projects. There is no point applying something that does not work for your company. In those cases, please try to customize the loss definitions matching your work environment.

The same thing applies to Loss improvement. It is not necessary to follow the steps given by someone or from some information sources to improve losses. Once confirming that all key perspectives have been covered, refer to this chapter and proceed the steps, according to your company's loss characteristics.

The 16 major losses is only standard guidance, and there are additional losses on top of the 16 major losses, or less losses reduced from the 16 major losses based on the company characteristics.

How to proceed with Loss Assessment

When proceeding with Improvement activities, grasping the characteristics and the quantity of losses (problems) in your company before considering "what to do" is very important. Without grasping the losses/problems, the need for Improvement will remain unclear. Also, without a clear understanding on the quantity of the loss, it is impossible to evaluate the impact of improvement.

Once the losses are identified, there is no choice but to resolve them. The fundamental approach is to categorize the losses according to the location, loss types, and occurrence mechanisms to clarify "What losses must be resolved".

The improvement process begins with identifying losses. The following shows the procedure to identify losses.

 

（1）　Considering Loss Definition and Quantatification

Defining losses according to your company characteristics and considering the measurement method. 

（2）　Quantifying Losses

Collecting the loss-data, and analyzing them by processes(company) and equipment. Also, clarify the bottleneck process points.

（3）　Setting a Target

Setting a target value to achieve by each company process. The target could be established from the top management policy or the business target.

（4）　Selecting Improvement subject

Improvement subject selection shall be done with the consideration of contribution to  the target value of the entire improvement initiatives.   

 

The key point here is to select improvement subjects' contribution to the total targeted loss elimination amount, and the impact needs to be set higher than the targeted amount for loss elimination you are desiring to achieve. 

Should the subject for improvement merely equal the target amount for loss elimination, there is a risk that the total targeted loss elimination amount will fail to meet the goal, even if some subjects are left unsolved or underperforms.

Generally, the target amount for loss elimination is set 30% to 50% higher than the target amount for loss improvement. Improvement subjects are then selected according to this elevated target. (For instance, if the target saving for loss improvement is 10,000USD, the loss elimination target will be set at 13,000USD to 15,000USD, and improvement subjects are selected to match this elevated target.)

 For the next step, select project members for each selected subject, and make sure to indicate by when (=deadline/timeline) and to which level (=Target) you expect them to achieve.

The Definition of Loss

There are two ways of measuring losses. One is by defining losses compared to the standard, and the other one is by comparing the target between goal and current status. Here in this chapter, we define Loss as follows.

The Losses, impeding equipment efficiency

Based on time as a scale; Measuring losses from the gap between the current productive hours and the ideal operation time which the machines continue producing only good products at the machine's maximum rated speed or theoretical output per hour.     

The Losses, impeding labor efficiency

Based on man-hour as a scale; Measuring losses from the gap between the current man-hour spent and the standard (required/desired) man-hour.

The Losses, impeding material efficiency

　Based on the cost as a scale; Measuring losses from the gap between actual material costs and the theoretical material cost. (ie. use the ratio by weight as an indicator)

Now that we visualize losses, let's think about how to improve. This is where the Kaizen steps for each loss comes in.

Loss and the Kaizen Steps

Here is the overview of the Losses and the JMAC recommendation for Kaizen/Improvement steps.

The Losses, impeding equipment efficiency 

1 Breakdown Loss

2 Setup/Changeover and Adjustment Loss

3 Minor stops and idling Loss

4 Speed Loss

5 Defect Loss

The Losses, impeding labor efficiency

6 Motion Loss

7 Line Organization Loss 

8 Skill Loss

The Losses, impeding material efficiency / Other Losses

9 Information processing loss

JMAC is planning to provide details on the losses impeding equipment's efficiency in near future. 

*In case you have questions/comments to JMAC or the author of this article, please contact us through the inquiry form. Click here to ask JMAC!

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.●Author profile

Nobuhiro Otsuka, Chief TPM Consultant

After joining the Japan Institute of Plant Maintenance (JIPM), Nobuhiro has been working on projects to improve productivity, reduce costs, and improve quality in the metal products, electrical and electronic parts, automotive, food and beverage, pharmaceutical and medical products, and paper industries. Nobuhiro provides consulting support from both a Gemba (shopfloor) perspective and a management perspective. Supports many companies both domestically and overseas. Currently works on a wide range of projects including TPM, cost management/cost reduction, quality improvement, industrial engineering, factory layout planning, purchasing/procurement, etc.

Katsunori Kanegae, Chief TPM Consultant, Director of TPM Consulting Business

After working as a production engineer at an electrical manufacturer, Katsunori became a consultant. As an expert in production strategy, production methods, and equipment management, he has been supporting domestic and international manufacturing companies in productivity improvement, cost management, defect reduction, inventory reduction, and lead time improvement projects. His expertise extends to researching advanced equipment maintenance technology and working on digital transformation in equipment maintenance. He also has authored numerous articles on digital transformation.

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