Transcript ROI, OEE, ROA and RAV - Do You Know What These Really Mean?

Business Industrial Network
True Downtime Cost
www.DowntimeCentral.com
Introduction
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A little about the speaker
AFE Region 9 – Marketing and Communication
Representative
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Benefits of Trade Organizations
Networking among similar organizations
What is commonality between the Internet and
organizations
Why the topic Downtime Cost?
•
TDC Survey
www.DowntimeCentral.com
The Power of networking…
You
A third
intangible force
Organization
Internet
www.DowntimeCentral.com
2002 Downtime Survey
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150 employees, only 80 hours annual
downtime reported
Average OEM respond time, 20 hours.
Max 40 hours, cost nothing?
7 industries surveyed, 4 industries
reported on an average, that they had
less than 6 PLCs in their facility.
30% PM, 10% emergency. The Truth 9% PM, 60% emergency.
www.DowntimeCentral.com
Quick Help Results
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10
Our customers can
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see ROI of 200%
6
BIN makes
4
Manufactures,
Vendors, and Support
2
companies more
0
profitable through
TDC information. Hours Down
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Without BIN
BIN Customers
Overview – The 3 step plan
 True
Downtime Cost
 Adopt Information Standards
 Understanding OEE
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Acronyms explained
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ROI
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OEE
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ROA
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RAV
• Return On Investment
• Overall Equipment Effectiveness
• Return on Assets
• Replacement Asset Value
www.DowntimeCentral.com
True Downtime Cost (TDC)
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Corrugators = $ 10,000 per hour
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Air compressor = $ 30,000 per hour
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Cell Bottleneck = $ 3,000 per hour
• 6 Hours saved in Unplanned downtime, $60K
• 6 Hours saved in Unplanned downtime, $180K
• 6 Hours saved in Unplanned downtime, $18K
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Overview (Definition:)
TDC – True Downtime Cost
•A method of recording and analyzing all significant cost
metrics associated with equipment downtime in a building
or manufacturing facility.
•TDC provides a way to assign time and/or monetary value
to previously considered “non-tangible” cost of downtime.
•Also TDC includes downtime factors commonly overlook
to arrive at a more true value for the cost of downtime.
www.DowntimeCentral.com
HOW MANY HOURS PER YEAR ?
Our survey shows the average annual
downtime that was tracked and
reported, to be 450 hours.
True Downtime cost per year
Corrugators = $ 4,500,000 per year
Air compressor = $ 13,500,000 per year
Cell Bottleneck = $ 1,350,000 per year
www.DowntimeCentral.com
Focus on the 80%
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80% of the failures come from 20% of the
failure modes.
TDC helps you focus on the greatest cost
of downtime, as opposed to traditional
broad categories such as “Maintenance”
, “Labor”, “The Hottest Fire” etc.
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Why use TDC?
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Executive Management
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True (Better) information, make better daily
decisions based on true cost, not just labor
and production schedule.
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Maintenance Management
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TDC gives you the tools to cost justify those much
needed equipment upgrades and replacements.
All Service and Product Suppliers
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Allows you to show customers the true value and
savings of your product or service.
Helps your customers cost justify purchasing from you.
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You’ve seen the value in CMMS, now see
that value increase.
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CMMS, might pay for itself in 18-30
months
Targeted cost/risk review of projects and
maintenance requirements will typically
achieve net payback in 3-6 months.
www.DowntimeCentral.com
Data Collection
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Equipment –constants
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Labor – constants
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Downtime – occurrences
• Updated annually, or as needed
• Updated when needed automatically
• Updated at time of each occurrence
automatically
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A Quick Look at TDC metrics
Equipment
Categories
People
Labor
LPP/M
Downtime
Time
Reduced
QC
Scrap
Product
Maintenance
Start-Up
Bottleneck
Sales Exp
Engineering
Band-Aid
OEM
Tooling
Management
Overhead
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Part / Ship
A greater return is why we see the popularity of …
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TPM
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(Total Productive Maintenance)
RCM
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(Reliability Centered Maintenance)
CMMS
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(Computerized Maintenance Management System)
OEE
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(Overall Equipment Effectiveness)
www.DowntimeCentral.com
TDC shows at least 10 times the cost that
conventional methods show.
This is why TDC amplifies the value
of asset management programs by
many times.
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What if TDC dies off, employees
lose interest?
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TDC made easy by growing number of
Computer systems
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Are being recognized as necessary and
valuable for …
• asset information
• work management
• condition monitoring
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The Old Mindsets
The relationships are poorly
understood, the mathematics
are too nasty, and the
available raw data is usually
inadequate. However, much
has changed through the
TDC project.
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TDC to OEE
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OEE can appear improved by actions
such as purchasing oversize equipment,
providing redundant supporting systems
and increasing the frequency of
overhauls.
Also complete understanding of OEE is
required to make sound decisions.
TDC enhances OEE accuracy, and
places it in perspective.
www.DowntimeCentral.com
TDC represents the final
bottlenecks to a fully integrated
and auditable approach to
maintenance strategy
development / justification.
Visit online to learn more about
•Standards
•OEE
•TDC Data Source
•TDC Cost Factors
“LEAN”
TPM, RCM, PM
TDC
ERP,CMMS,EDI,DCS,PLC
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