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Using the Business Level FMEA approach to better understand and prioritize production losses and extraordinary costs, companies can now do a better job selecting the appropriate tool and approach to solve or mitigate the problem. What’s more, this strategy will be based on a system level review of the production process. For example:

  1. If supplier quality and/or quantity is the top opportunity for improvement, supply chain principles and perhaps even Six Sigma can be applied to reduce the variability in quality and quantity of the supply.
  2. If the next biggest opportunity is inconsistency in the production process due to a lack of training of operators, a request can be made to human resources or training to develop a plan to address this need.
  3. If the next biggest opportunity is related to a specific machine and its unreliability, the 5S methodology might be applied first to get the machine in reasonable order. Remember, the purpose of 5S is defect detection and elimination, along with workplace discipline, not housekeeping. Doing a 5S exercise will eliminate many small defects in the machinery. Next, certain Total Productive Maintenance (TPM) principles, such as operator care, or better preventive maintenance (PM) and predictive maintenance (PdM) may be applied to better manage these failure modes. Then, reliability centered maintenance (RCM) may be used to better understand the machine’s functional requirements and the failure modes that are resulting in loss of functionality in an effort to optimize PM and PdM tasks. If the problem with the machine was particularly difficult, root cause analysis (RCA) may be used.
  4. If the next biggest opportunity is to reduce the erratic nature of production planning and frequent changeovers, the approach might be to work with sales and marketing to analyze product mix, sales and gross profit by product and key customers, with a view to better understand and rationalize product mix and sometimes even customers. The company would probably want to implement a quick changeover capability and work to level its production flow, even at the risk of modestly increasing inventory in the short term.
  5. If the next biggest opportunity is to reduce spares unavailability, RCM methods would be applied to understand the most common failure modes or the highest consequence failure modes. Then, certain supply chain principles would be used to make sure the needed spares are on hand, but no more than is needed.

In some cases a company will want to develop a so-called A3, a one-page action plan that contains in very simple terms the current state, future state, business case and action plan. An illustration of a high level A3 that could be used to develop a more detailed and specific one is shown in Figure 4.

A3 Action Plan

Figure 4: A3 action plan

Tip from Where Do We Start Our Improvement Program? by Ron Moore

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