KPI: No more heroes
3 Oct 2007
Patrick Raleigh visits Flexsys' Ruabon Works — now a world-class chemicals operation following a series of management initiatives to establish effective performance measures across the site
One of the UK's oldest chemicals plants, the Flexsys Rubber Chemicals Ltd site at Ruabon, North Wales, has clearly undergone many changes since it was established in 1860 to manufacture products based on phenolic feedstock derived from locally mined coal. The most recent changes have seen the operation earn world-class 'Operational Excellence' status and it is now preparing to challenge its competitors in cheap-labour countries on a production-cost basis.
Under long-time owner Monsanto, Ruabon once employed over 2000, manufacturing a broad range of chemicals — everything from aspirin to corrosion inhibitors. The now 160-employee operation is 100%-owned by Solutia Inc., following the US group's recent buyout of former JV partner Akzo Nobel's 50% stake in Flexsys.
Ruabon produces three rubber chemicals — vulcanisation accelerator diphenyl guanidine (DPG); trimethylquinoline (TMQ), a UV stabliser; and N-cyclohexylthiophthalimide (CTP), a prevulcanisation inhibitor. The COMAH-registered site also offers continuous and batch production facilities for guest operators such as DuPont Air Products, which currently produces nanomaterials there.
Flexsys' rubber additives are supplied to major tyre manufacturers such as Michelin, Bridgestone and Goodyear, and general rubber goods producers — many under massive cost-down pressures from the automotive industry.
Allied to low-price competition from suppliers in China and eastern Europe, the situation led Flexsys to embark on the Oliver Wight sales/operations planning process — also known as MRP2, in operational excellence — which the Ruabon site went through in 2001.
"Oliver Wight starts off with getting customer forecasts for demand and works through to the production department and making sure that your suppliers deliver on time," explains Roger Mason, operations manager at the Ruabon Works, near Wrexham. "It is more of a pull rather than push because you are not putting things into a store and getting your people to sell it."
The Oliver Wight programme delivered gains through enhancing the site's ability to supply on time. More significant, though, were the savings through major reductions in working capital via inventory reductions and warehouse closures.
"We were no longer manufacturing for long periods and then shutting down when the warehouse got full. We were manufacturing on a monthly basis. So operators were seeing the plant shut on and off much more regularly," explained Mason.
For instance, Ruabon started testing and loading its powder and pellet products straight off the bagging machines onto pallets for delivery to Antwerp. The process is today completed within three days, compared to around two weeks previously.
Despite the efficiencies, the Oliver Wight process generated a number of issues, not least among the plant operators, who could not see the value of the new demand-led production regime, said Mason.
Few champions
This, in turn, meant that the improvement project was being driven by a few champions who 'got it' and then pushed it on to everyone else. As Mason put it: "When the boss says jump everyone jumps, but they whinge like hell behind his back."
And, despite achieving Oliver Wight's Class A accreditation in planning and control — the operation was struggling to achieve even 50% of one of the three main KPIs [key performance indicators] — the weekly production planning performance measure (MPSP).
Ruabon was hitting its MSP daily and PPP monthly production targets, which were both averaging near 100% of 'demonstrated capacity'. But it couldn't consistently produce to target on week-to-week basis, as seven days was not enough time for production to catch up if there was a plant failure.
According to Mason, the Oliver Wight concept of production schedule performance meant that maintenance had become all about getting the plant back up and running to hit the production KPIs, and therefore had to be reactive.
"So we had implemented good material systems, good stores, lots and lots engineering spares to get equipment back up quickly. There were about 70 contractors on standby waiting to get in just in case anything broke down. That is what we had created but we hadn't intended to," he explained.
Another symptom was a heavy reliance on people who were good at reactive maintenance, according to Andy Edwards, engineering resource manager at Ruabon.
"We almost treated people who were good at reactive maintenance as heroes, especially maintenance coordinators whose whole reputations were built on this activity. So in terms of reactive maintenance we were world class," quipped Edwards.
"People were promoted and occasionally even given bonuses for being good at emergency work," added Mason. "But," he said, "even when we were doing it we knew it was wrong. We knew that to get these plants running properly we should do preventive maintenance."
These concerns led the Ruabon management to engage engineering consultancy MCP, based in Solihull, West Midlands, to perform its "AMIS" audit in 2003. This found the site well below its sector average, with a score of 38% — reflecting the production-led demand to fix any breakdown quickly.
Flexsys and MCP implemented a programme called Asset Care Excellence (ACE), redesigning the entire site maintenance process, according to Richard Jones, managing director of MCP. This, he said, involved making local production managers responsible for adherence to the new process, which included hitting the new KPIs.
Under the ACE programme, the Ruabon team also introduced;
l daily equipment check routines for operators
l redesign of lubricant oil storage & application
l oil debris and machine condition analysis routines
l re-design of the site 'term contractor' support arrangements
l introduction of official satellite stores
l RCA (Root Cause Analysis) of all failures, which required 'reactive' working
l equipment maintenance strategy reviews
l 5S workplace excellence
The ACE team at Ruabon further coordinated a new work-order management process and a 6-sigma FMEA (failure mode and effects analysis) — a technique to decide on critical adjustments to the new process.
The FMEA was done to simplify the process and examine how each step might go wrong, said Mason: "It was a bit like poacher turned gamekeeper. From years of experience, Andy, myself and other team members knew how to convince management that the systems they had given us were working, even if they weren't."
The Ruabon managers tried to pick the plan apart and find what wasn't going to work and where they were going to have a battle on their hands. They discussed the issues with supervisors and managers and explained why they wanted them to work in this new way.
As Edwards said: "We spent months on this before launching it on the site. We were very conscious that the system had to belong to the plant. It had to work for the technicians, the production people, maintenance coordinators and even stores and purchasing people. It had to work on all different levels."
Second audit
A second MCP audit, 12 months later showed that the AMIS score was raised from 38% to 60% as the new processes started to kick in. However, it also emerged that the shopfloor was struggling with changes such as structured schedules, while some managers feared that their core problem-solving skills were no longer wanted.
An MCP opinion survey found that Ruabon had a committed management team and a number of enthusiastic supervisors but also around 100 operators who were merely going along with it, said Jones.
Flexsys, therefore, introduced a personal and team development programme to examine behaviours and interaction among employees. This included working with training firm Wentworth Consultants on how to encourage feedback from people about their values and motivations at work.
"From this training, you started to get the skills to sit down with someone face-to-face, break down some of the personality barriers and help people recognise what they were coming to work for," said Mason.
According to Edwards, this initiative played a key role in getting most of the supervision team and a significant number of the technicians and operators to believe that the changes were worth doing.
For example, he said, the technicians needed a lot of convincing about taking the time to do a root cause analysis on the equipment failures and record any problems they had found.
"This was a mindset change in some instances. We were saying spend more time on the computer. Input what went wrong and your ideas on how to make sure this doesn't happen again. This is how we want to use your time, and if you don't get on to the next job, then fine," he said.
Being a COMAH, top tier site, Ruabon had good arrangements for critical and pressurised equipment inspections, and for monitoring and stopping the big, once-in-ten-year breakdowns. But, the focus now broadened to smaller issues such as the blocking pipe or failing probes that could be solved by routine checking and servicing. The site introduced condition monitoring teams to keep the machines in better condition and operators started doing much more checking around the plant and reporting failures directly into the CMMS at a much better rate.
Preventive miantenance
"We were putting in more of these preventive maintenance jobs," said Mason. "And because it was coming from the technician saying, for instance, why don't we check that O-ring [more often], they were keener to do these jobs when they came up."
This led to work processes being strictly laid down that specified that a technician doing a preventive maintenance job should not be called over to fix a nearby breakdown, even if this added time on the repair.
"That seemed counter intuitive but what we were doing was trying to get this sense that preventive maintenance routines were the absolute key to moving forward and being good at repair was where we had come from," commented Mason.
After about 18 months, Ruabon started to see fewer breakdowns and was hitting all its KPIs as the preventive routines began to eliminate problems and show what was really going wrong. A third MCP audit in late 2005 recognised these changes, with a score of 75% - the World Class threshold.
Jones at MCP, however, recommended further improvements to establish Ruabon as a true 'World Class' performing site. "There was still too much noise and fluctuation - not catastrophic problems, but chronic issues that interrupt things," he explained.
The Ruabon team redesigned various processes and the RCA procedures and changed the way operators did their checks as well as the way the stores were working.
A third MCP audit, about 12 months later, showed that the weekly production planning performance measure, MPSP, had doubled — regularly achieving the 'Class A' performance of 95%. The AMIS benchmark is now in the top 5%, from about 4000 benchmarks in the world-class group.
Benchmark fixed costs from the AMIS audit are also very good at 1.4% or 1.5% against capital asset replacement value. Another important metric, overall equipment effectiveness (OEE) is regularly over 90% and averages over 85%.
"We know that we are working as well as any one else in our benchmark group and in most instances we are probably beating them. In the West, that's what you have to do to stay in business," commented Mason.
These achievements have now led on to "Project Ebony, which carries the challenging goal of making the Ruabon Works' manufacturing costs comparable with those of competitors in China. The plan involves restructuring the site and automating activities, such as sampling and sample analysis, which take up significant operator time.
Phase I of the project is expected to yield annual savings of around £750,000, with a payback of less than two years. The "modest" capital spend element, said Mason, concerns about four or five processing changes such as putting in pressure monitors and automatic valves controls.
"In Phase I we are going to take two of the production plants and put them together into one, based around one control room and combine the two services plants," said the Flexsys manager. Phase II, he said, will reduce manning in the third plant. Ultimately there is potential to move all operations into the central control room, with a team of multi-plant field operators. The only issue is, said Mason, "is it worth doing, because the investment must be financially justified."
The operators all know about the Project Ebony proposals, according to the Ruabon Works managers, who are currently waiting for the green light from Flexsys' new ownership.
"One of the areas we looked at with Project Ebony is how the new operational and Asset Care Excellence work processes would run after these changes," Mason continued. "If in reducing people we actually take away the ability to use these processes it is going to go wrong."
Meanwhile, concluded the Ruabon operations manager, the process and the KPIs have got to be kept real, and not become something that was put in two years ago. "You have" he said, 'to keep going back to your KPIs, changing them or dropping them as you [and everyone working at the site] ask if these processes are delivering what we want."
Under long-time owner Monsanto, Ruabon once employed over 2000, manufacturing a broad range of chemicals — everything from aspirin to corrosion inhibitors. The now 160-employee operation is 100%-owned by Solutia Inc., following the US group's recent buyout of former JV partner Akzo Nobel's 50% stake in Flexsys.
Ruabon produces three rubber chemicals — vulcanisation accelerator diphenyl guanidine (DPG); trimethylquinoline (TMQ), a UV stabliser; and N-cyclohexylthiophthalimide (CTP), a prevulcanisation inhibitor. The COMAH-registered site also offers continuous and batch production facilities for guest operators such as DuPont Air Products, which currently produces nanomaterials there.
Flexsys' rubber additives are supplied to major tyre manufacturers such as Michelin, Bridgestone and Goodyear, and general rubber goods producers — many under massive cost-down pressures from the automotive industry.
Allied to low-price competition from suppliers in China and eastern Europe, the situation led Flexsys to embark on the Oliver Wight sales/operations planning process — also known as MRP2, in operational excellence — which the Ruabon site went through in 2001.
"Oliver Wight starts off with getting customer forecasts for demand and works through to the production department and making sure that your suppliers deliver on time," explains Roger Mason, operations manager at the Ruabon Works, near Wrexham. "It is more of a pull rather than push because you are not putting things into a store and getting your people to sell it."
The Oliver Wight programme delivered gains through enhancing the site's ability to supply on time. More significant, though, were the savings through major reductions in working capital via inventory reductions and warehouse closures.
"We were no longer manufacturing for long periods and then shutting down when the warehouse got full. We were manufacturing on a monthly basis. So operators were seeing the plant shut on and off much more regularly," explained Mason.
For instance, Ruabon started testing and loading its powder and pellet products straight off the bagging machines onto pallets for delivery to Antwerp. The process is today completed within three days, compared to around two weeks previously.
Despite the efficiencies, the Oliver Wight process generated a number of issues, not least among the plant operators, who could not see the value of the new demand-led production regime, said Mason.
Few champions
This, in turn, meant that the improvement project was being driven by a few champions who 'got it' and then pushed it on to everyone else. As Mason put it: "When the boss says jump everyone jumps, but they whinge like hell behind his back."
And, despite achieving Oliver Wight's Class A accreditation in planning and control — the operation was struggling to achieve even 50% of one of the three main KPIs [key performance indicators] — the weekly production planning performance measure (MPSP).
Ruabon was hitting its MSP daily and PPP monthly production targets, which were both averaging near 100% of 'demonstrated capacity'. But it couldn't consistently produce to target on week-to-week basis, as seven days was not enough time for production to catch up if there was a plant failure.
According to Mason, the Oliver Wight concept of production schedule performance meant that maintenance had become all about getting the plant back up and running to hit the production KPIs, and therefore had to be reactive.
"So we had implemented good material systems, good stores, lots and lots engineering spares to get equipment back up quickly. There were about 70 contractors on standby waiting to get in just in case anything broke down. That is what we had created but we hadn't intended to," he explained.
Another symptom was a heavy reliance on people who were good at reactive maintenance, according to Andy Edwards, engineering resource manager at Ruabon.
"We almost treated people who were good at reactive maintenance as heroes, especially maintenance coordinators whose whole reputations were built on this activity. So in terms of reactive maintenance we were world class," quipped Edwards.
"People were promoted and occasionally even given bonuses for being good at emergency work," added Mason. "But," he said, "even when we were doing it we knew it was wrong. We knew that to get these plants running properly we should do preventive maintenance."
These concerns led the Ruabon management to engage engineering consultancy MCP, based in Solihull, West Midlands, to perform its "AMIS" audit in 2003. This found the site well below its sector average, with a score of 38% — reflecting the production-led demand to fix any breakdown quickly.
Flexsys and MCP implemented a programme called Asset Care Excellence (ACE), redesigning the entire site maintenance process, according to Richard Jones, managing director of MCP. This, he said, involved making local production managers responsible for adherence to the new process, which included hitting the new KPIs.
Under the ACE programme, the Ruabon team also introduced;
l daily equipment check routines for operators
l redesign of lubricant oil storage & application
l oil debris and machine condition analysis routines
l re-design of the site 'term contractor' support arrangements
l introduction of official satellite stores
l RCA (Root Cause Analysis) of all failures, which required 'reactive' working
l equipment maintenance strategy reviews
l 5S workplace excellence
The ACE team at Ruabon further coordinated a new work-order management process and a 6-sigma FMEA (failure mode and effects analysis) — a technique to decide on critical adjustments to the new process.
The FMEA was done to simplify the process and examine how each step might go wrong, said Mason: "It was a bit like poacher turned gamekeeper. From years of experience, Andy, myself and other team members knew how to convince management that the systems they had given us were working, even if they weren't."
The Ruabon managers tried to pick the plan apart and find what wasn't going to work and where they were going to have a battle on their hands. They discussed the issues with supervisors and managers and explained why they wanted them to work in this new way.
As Edwards said: "We spent months on this before launching it on the site. We were very conscious that the system had to belong to the plant. It had to work for the technicians, the production people, maintenance coordinators and even stores and purchasing people. It had to work on all different levels."
Second audit
A second MCP audit, 12 months later showed that the AMIS score was raised from 38% to 60% as the new processes started to kick in. However, it also emerged that the shopfloor was struggling with changes such as structured schedules, while some managers feared that their core problem-solving skills were no longer wanted.
An MCP opinion survey found that Ruabon had a committed management team and a number of enthusiastic supervisors but also around 100 operators who were merely going along with it, said Jones.
Flexsys, therefore, introduced a personal and team development programme to examine behaviours and interaction among employees. This included working with training firm Wentworth Consultants on how to encourage feedback from people about their values and motivations at work.
"From this training, you started to get the skills to sit down with someone face-to-face, break down some of the personality barriers and help people recognise what they were coming to work for," said Mason.
According to Edwards, this initiative played a key role in getting most of the supervision team and a significant number of the technicians and operators to believe that the changes were worth doing.
For example, he said, the technicians needed a lot of convincing about taking the time to do a root cause analysis on the equipment failures and record any problems they had found.
"This was a mindset change in some instances. We were saying spend more time on the computer. Input what went wrong and your ideas on how to make sure this doesn't happen again. This is how we want to use your time, and if you don't get on to the next job, then fine," he said.
Being a COMAH, top tier site, Ruabon had good arrangements for critical and pressurised equipment inspections, and for monitoring and stopping the big, once-in-ten-year breakdowns. But, the focus now broadened to smaller issues such as the blocking pipe or failing probes that could be solved by routine checking and servicing. The site introduced condition monitoring teams to keep the machines in better condition and operators started doing much more checking around the plant and reporting failures directly into the CMMS at a much better rate.
Preventive miantenance
"We were putting in more of these preventive maintenance jobs," said Mason. "And because it was coming from the technician saying, for instance, why don't we check that O-ring [more often], they were keener to do these jobs when they came up."
This led to work processes being strictly laid down that specified that a technician doing a preventive maintenance job should not be called over to fix a nearby breakdown, even if this added time on the repair.
"That seemed counter intuitive but what we were doing was trying to get this sense that preventive maintenance routines were the absolute key to moving forward and being good at repair was where we had come from," commented Mason.
After about 18 months, Ruabon started to see fewer breakdowns and was hitting all its KPIs as the preventive routines began to eliminate problems and show what was really going wrong. A third MCP audit in late 2005 recognised these changes, with a score of 75% - the World Class threshold.
Jones at MCP, however, recommended further improvements to establish Ruabon as a true 'World Class' performing site. "There was still too much noise and fluctuation - not catastrophic problems, but chronic issues that interrupt things," he explained.
The Ruabon team redesigned various processes and the RCA procedures and changed the way operators did their checks as well as the way the stores were working.
A third MCP audit, about 12 months later, showed that the weekly production planning performance measure, MPSP, had doubled — regularly achieving the 'Class A' performance of 95%. The AMIS benchmark is now in the top 5%, from about 4000 benchmarks in the world-class group.
Benchmark fixed costs from the AMIS audit are also very good at 1.4% or 1.5% against capital asset replacement value. Another important metric, overall equipment effectiveness (OEE) is regularly over 90% and averages over 85%.
"We know that we are working as well as any one else in our benchmark group and in most instances we are probably beating them. In the West, that's what you have to do to stay in business," commented Mason.
These achievements have now led on to "Project Ebony, which carries the challenging goal of making the Ruabon Works' manufacturing costs comparable with those of competitors in China. The plan involves restructuring the site and automating activities, such as sampling and sample analysis, which take up significant operator time.
Phase I of the project is expected to yield annual savings of around £750,000, with a payback of less than two years. The "modest" capital spend element, said Mason, concerns about four or five processing changes such as putting in pressure monitors and automatic valves controls.
"In Phase I we are going to take two of the production plants and put them together into one, based around one control room and combine the two services plants," said the Flexsys manager. Phase II, he said, will reduce manning in the third plant. Ultimately there is potential to move all operations into the central control room, with a team of multi-plant field operators. The only issue is, said Mason, "is it worth doing, because the investment must be financially justified."
The operators all know about the Project Ebony proposals, according to the Ruabon Works managers, who are currently waiting for the green light from Flexsys' new ownership.
"One of the areas we looked at with Project Ebony is how the new operational and Asset Care Excellence work processes would run after these changes," Mason continued. "If in reducing people we actually take away the ability to use these processes it is going to go wrong."
Meanwhile, concluded the Ruabon operations manager, the process and the KPIs have got to be kept real, and not become something that was put in two years ago. "You have" he said, 'to keep going back to your KPIs, changing them or dropping them as you [and everyone working at the site] ask if these processes are delivering what we want."
