Opportunity Analysis: “Panning for Gold”
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1. The process is really quite simple Let s look at a simple scenario Reliability Center Inc You send out a message to all of the people that you would like to interview You state the date time and a brief description of the OA process for the interviewees Note it is important to interview at least 2 or 3 people in each session so that the interviewees can bounce ideas off of each other Once in the room you will need to display a large copy of the contact flow diagram and the failure definition so that they are in clear view of the interviewees Now you will begin the process of asking your questions There really is only one initiating question that needs to be asked What events or conditions satisfy the definition of failure within each of the subsystems in the contact flow diagram At this point the interviewees will begin to brainstorm all of the failure events that they have experienced within each of the subsystems Once you have exhausted all of the possibilities ask the interviewees what the frequency and impact is on each of the failure events The frequency should be based on the number of occurrences per year The interviewees however will give you the information in the measurement units that make most sense to them For instance they may say it happens once per shift It is your job to later extrapolate that figure into the number of occurrences per year The impact should include items such as manpower requirement2. events that are redundant As far as making the conversions to numbers of times per year your more advanced spreadsheets can do many of these tasks for you Consult your user s manual for creating lookup tables The following example should give you an idea of what is meant by summarizing your data Sub Failure Event Failure Mode Frequency Yr Impact System Occurrence Recovery Recirculation Pump Bearing Fails 1 per month 1 shift Fails Recovery Recirculation Pump Oil Contamination 1 per 2 months 1 day Fails Recovery Recirculation Pump Bearing Locks Up 1 per month 12 hours Fails Recovery Recirculation Pump Bearing Seizes Fractures 1 per year 5 days Fails Shaft This data suggests that the first three items are the same since they each impact the bearings and have fairly consistent frequencies and impacts The last item is also related to bearings but went one step beyond the others Reliability Center Inc 5 since we not only lost the bearings but we also suffered a fractured shaft This would indicate a separate mode of failure A summarization of this data might look something like this Sub Failure Event Failure Mode Frequency Yr Impact System Occurrence Recovery Recirculation Pump Bearing Problems 12 per year 12 hours Fails Recovery Recirculation Pump Bearing Seizes Fractures 1 per year 5 days Fails Shaft Completed OA failure event summarization St
3. the criticality probability x severity of potential failure modes in specific system This sounds wonderful in theory but it takes a tremendous amount of time and energy to do this sometimes as much as 50 100 man years Realizing that we just do not have that much time or resources in our manufacturing plants we had to devise a way to make the process less cumbersome The Opportunity Analysis or OA approach makes one simple change to the FMEA process Instead of looking into the future we are going to take a look at our past failures This changes the time to conduct such analyses from man years to man weeks This makes the process much more practical to use in our facilities The OA process is used to determine what failures are occurring in our facility and what their impact and frequencies are Think of it this way Failure Event Failure Mode Frequency Impact Total Annual Year Occurrence _ Loss Failure of pump p 1002 Bearing failure 12 failure yr 2 000 failure 24 000 Sample Failure Event This simplified table demonstrates the power of this technique Imagine performing the above calculation for every failure event in your facility I can assure you that the results would be astounding Of course we do not want to work on every failure event so we need to determine which failure events are the most significant It just so happens that typically 20 or less of the failure events represent 80 or mor
4. Reliability Center Inc www Reliability com Opportunity Analysis Panning for Gold 804 458 0645 Robert J Latino CEO RCI info reliability com N Abstract Oftentimes people learn new methodologies and employ tools to support those methodologies However they are disappointed with their bottom line results Root Cause Analysis RCA is a prime example of this People usually leave new RCA training pumped up and ready to set the world on fire when they return but they are usually faced with the status quo when they get back and their new learning is rarely ever used The other problem is that if they are able to use their new RCA knowledge they tend to use it like a hammer and treat all problems as nails When one is using RCA properly on every problem that crops up it is usually overkill and an extremely inefficient process In this paper we will strive to help the analyst focus on the qualified candidates for RCA or the real opportunities Wouldn t it be great if you knew exactly what all of those costly chronic repetitive failures were actually costing your facility There is a way It is called Opportunity Analysis or OA for short A similar process called Failure Modes and Effects Analysis or FMEA was a technique first developed and utilized in the aerospace industry to find problems with an aircraft design before it ever left the ground In short it is a way of looking into the future and determining
5. also provides a basis for a common understanding of what the facility s needs are Not to mention it is an essential step in the development of a Significant Few failure list There are few rules of thumb to consider when developing a failure definition It must be concise and easily understandable If it is not it will leave too much room for interpretation It should not have to be interpreted It must only address one focus If we include too many topics our target becomes too large Finally it should be approved and signed by someone in authority so that everyone in the organization sees that it is a priority issue Reliability Center Inc 2 The next step in the preparation process is to develop a contact flow diagram used synonymously with process flow diagram The contact flow diagram will allow you to break down your system into smaller more manageable subsystems The rule for this diagram is to map all of the process units that come into contact with the product This diagram as well as the failure definition will be used when we begin to collect the data for the analysis Below is a sample of what a global contact flow diagram might look like in a simple refinery i Crude Storage Distillation Product Disposition The next thing we need to accomplish before we begin our OA is to perform a gap analysis In other words we need to uncover the disparity between what we are producing now and what is our potential This will give
6. ay seem trivial but it is an essential step in the analysis If we were to ask 100 people to define failure we would probably get 100 different definitions This would make our analysis far too broad We need to focus not on everything but on the things that are most important to our business at that point in time For instance if utilization is critical to our business today we should center our definition around utilization if our priority issue is quality than our definition should center on quality Let s take a look at some examples of common failure definitions Failure is any loss that interrupts the continuity of maximum quality production Failure is a loss of asset availability Failure is the unavailability of equipment Failure is a deviation from the status quo Failure is not meeting target expectations Failure is any secondary defect Oe ge Oe MS The definitions above are some common industrial failure definitions Please note that there are no perfect failure definitions For instance Failure is any loss that interrupts the continuity of maximum quality production has to include planned shutdowns rate reductions for decreased sales etc It would not pick up failures on equipment that is spared since it does not interrupt the continuity of production A precise failure definition is important since it focuses the facility on the priority issues It fosters good communications since everyone knows what is important and it
7. de 12 40 00 300 12 000 Sub System 1 Failure Event 13 Failure Mode 13 12 00 1 000 12 000 Sub System 2 Failure Event 14 Failure Mode 14 10 00 1 000 10 000 Sub System 1 Failure Event 15 Failure Mode 15 48 00 200 9 600 Sub System 3 Failure Event 16 Failure Mode 16 3 00 2 000 6 000 Sub System 2 Failure Event 17 Failure Mode 17 6 00 1 000 6 000 Total Global Loss 3 680 575 Significant Few 2 944 460 Losses In the example above we have totaled the loss column and have a total global loss of 3 680 575 The total loss column has been sorted in descending order so that it is easy to identify the Significant failure events Our Significant Few loss figure that we are looking for is 2 944 460 3 680 575 x 80 Now all we have to do is simply go to the top of the total loss column and begin adding from top to bottom until we reach the Significant Few loss figure of 2 944 460 It turns out that the first 2 failure events represent approximately 80 of our losses 2 950 000 or our Significant Few failure list Now instead of doing Root Cause Reliability Center Inc 7 Analysis on everything we are only going to do it on the ones in our Significant Few failure list We could also look at our data in chart form to see graphically what the Significant Few failures represent compared to the rest of the failures 7 ais gt of ee BY 7 Step 6 Validate Your Results There a
8. e of our losses This means that we do not have to do Root Cause Analysis RCA on everything just the ones that are most important Let s take a look at the steps involved in performing an OA Steps Description 1 00 Perform preparatory work Develop a failure definition contact flow diagram gap analysis and preliminary worksheet and interview schedule Reliability Center Inc 1 2 00 Collect data Interview facility personnel to determine what the failures are their frequencies and their impacts 3 00 Summarize amp encode Input into an electronic spreadsheet and determine any results redundancies 4 00 Calculate loss Multiply frequency times impact for every failure event in the analysis 5 00 Determine Significant Determine the 20 or less of the failures that result in Few 80 of the losses 6 00 Validate results Verify that the results are valid 7 00 Issue a report Communicate results Steps to perform an Opportunity Analysis Step 1 Perform preparatory work Before beginning any analysis it is important to do some preliminary prep work This analysis is no different The first thing that needs to be accomplished is to select a system to analyze For instance we may want to select a small subset of the facility as opposed to selecting the entire facility as our system Once we know what system we want to work on we must DEFINE FAILURE AND OR LOSS This m
9. ehind body language It is not important that you become an expert in this area However it is important to know that a substantial portion of human communication 55 60 is through body language Let the body language talk to you 8 In any set of interviews there will be a number of people who are able to contribute more to the process than the others It is important to make a note of the extraordinary contributors so that they can assist you later in the analysis They will be extremely helpful if you need additional information for validating your finished OA as well as assisting you when you begin your actual Root Cause Analysis RCA 9 Remember to use your failure definition and block diagram to keep interviewees on track if they begin to wander off of the subject Step 3 Summarize amp Encode At this point we have conducted a series of separate interviews and we need to look through our data to filter out redundant entries Then we convert frequencies from the interviewee s measurement units into occurrences per year i e 2 month would translate into 24 year The easiest way to summarize this information is to input the information into an electronic spreadsheet There are many off the shelf products on the market that you could use to conduct these analyses Once the information is input you can use your spreadsheet to sort the raw data first by sub system and then by failure event This will give you a closer look at the
10. ep 4 Calculate Loss At this point we want to do a simple calculation to generate our total loss for each event in the analysis The calculation is as follows Frequency x Loss per Occurrence Impact Total Loss per Year Let s look at an example of just how to apply this Sub Failure Event Failure Mode Frequency Impact Total Annual Loss System Yr Occurrence hrs yr Recovery Recirculation Bearing Fails 12 per year 12 lost hrs 144 lost hrs of Pump Fails prod Compressor Seal Failure Blown Seals 4 per year 24 lost hrs 96 lost hrs of prod Mixers Filter Switches Filters Clogged 26 per year 2 lost hrs 52 lost hrs of prod Vent Pressure Gauge Leaks Due To 33 per year 24 lost hrs 8 lost hrs of prod Condensers Leaks Corrosion Completed Loss Calculation Example What we need to do is multiply the frequency times the impact to get our total loss In the first event we have a failure occurring once per month or 12 times per year We lose a total of 12 hours production every time this occurs So we simply multiply 12 occurrences times 12 hours of lost production to get a total loss of 144 hours per year If you decide to use an electronic spreadsheet all of these calculations can be performed automatically by multiplying the frequency and impact columns Refer to the section in your software s user manual that concerns multiplying columns It is important to make sure that
11. hest to lowest 3 Multiply the global total loss column by 80 or 80 This will give you the Significant Few loss figure that you will need to determine what the Significant Few failures are in your facility 4 Go to the top of the total loss column and begin adding the top events from top to bottom When the sum of these losses is equal to or greater than the Significant Few loss figure than those events are your Significant Few failure events Let s take a look at how this applies to our discussion on OA Sub System Failure Event Failure Mode _ Freq Yr Impact Total Occurrence Annual Loss Sub System 3 Failure Event 1 Failure Mode 1 2000 00 850 1 700 000 Sub System 2 Failure Event 2 Failure Mode 2 1000 00 1 250 1 250 000 Sub System 4 Failure Event 3 Failure Mode 3 4 00 75 000 300 000 Sub System 2 Failure Event 4 Failure Mode 4 18 00 6 000 108 000 Sub System 3 Failure Event5 Failure Mode 5 6 00 12 000 72 000 Sub System 2 Failure Event 6 Failure Mode 6 52 00 1 000 52 000 Sub System 3 Failure Event 7 Failure Mode 7 _ 80 00 500 40 000 Sub System 3 Failure Event 8 Failure Mode 8 12 00 3 000 36 000 Sub System 4 Failure Event9 Failure Mode 9 1365 00 75 27 375 Sub System 3 Failure Event 10 Failure Mode 10 24 00 1 000 24 000 Sub System 1 Failure Event 11 Failure Mode 11 12 00 1 300 15 600 Sub System 2 Failure Event 12 Failure Mo
12. ndidates for Root Cause Analysis A listing of everyone involved in the analysis including all of the interviewees a SE oS Last but not least make sure that you communicate the results of the analysis back to the interviewees who participated so that everyone can feel a sense of accomplishment and ownership In summary OA is a fantastic tool for limiting your analysis work to only those things that are of significant importance to the facility You cannot afford to perform Root Cause Analysis on everything However you can use this tool to help narrow your focus to what is most important to conduct an RCA Reliability Center Inc 8 Robert J Latino is CEO of Reliability Center Inc Mr Latino is a practitioner of root cause analysis in the field with his clientele as well as an educator Mr Latino is an author of RCI s Root Cause Analysis Methods training and co author of Basic Failure Analysis Methods workshop Mr Latino has been published in numerous trade magazines on the topic of root cause analysis as well as a frequent speaker on the topic at trade shows and conferences His most recent publication is titled Root Cause Analysis Improving Performance for Bottom Line Results He can be contacted at 804 458 0645 or blatino reliability com Reliability Center Inc 9
13. re a few validations that should be performed to make sure that our analysis is correct You can use the gap analysis to make sure that all of the events add up to 10 of the gap If it ends up being less you have probably left some important failure events off the listing If you have more than the gap then you probably have not summarized your results well enough There may be some redundancies in your list A second validation that you can use is having a group of experienced people from your facility review your findings This will help ensure that you are not too far off base A third and final validation would be to use your computerized data systems to see if the events closely match the data in your maintenance management system This will give you further confidence in your analysis Do not worry if your list varies from your Computerized Maintenance Management System CMMS since you will pick a lot of events that are never even recorded in the work order system i e those events that may take only a few minutes to repair Step 7 Issue a Report As with any analysis it is important to communicate your findings to all interested parties Your report should include the following items An explanation of the analysis technique The failure definition that was utilized The contact flow diagram that was utilized The results displayed graphically as well as the supporting spreadsheet lists Recommendations of which failures are ca
14. s material costs and any downtime that might have been experienced This is all there is to it When you begin the interview process it is best to interview the people who are closest to the work i e mechanics and operators You should also talk with supervisors and possibly managers but certainly not to the extent that you would for mechanics and operators As a Principal Analyst PA you will also need to be the principal interviewer This means that you have to explain the process to the interviewees ask the questions and capture the information on your log sheet This can be a difficult job If it is feasible it would be advantageous to have an associate interviewer to assist you by recording the information on the log sheets This allows you to focus on the questions and the interviewees The job of interviewing can be quite an experience particularly if you do not have a lot of experience in conducting them It tends to be more of an art form than a science Below is a listing of some tips that may be useful when you begin to conduct your OA interviews Interview Hints 1 Be very careful to ask the exact same lead questions to each of the interviewees This will eliminate the possibility of having different answers depending on the interpretation of the question Later you can expand on the questions if further clarification is necessary 2 Make sure that the participants know what an OA is as well as the purpose and struct
15. total loss is communicated in the most appropriate units For example we used hours of downtime per year in the example above Hours of downtime might not mean much too some people So it might be more advantageous to convert that number from hours per year to dollars per year since everyone can relate to dollars In other words use the units that will get the most attention from everyone involved Step 5 Determining the Significant Few The concept of the Significant Few is derived from a famous Italian Economist name Vilfredo Pareto Pareto stated that In any set or collection of objects ideas people and events a FEW within the sets or collections are MORE SIGNIFICANT than the remaining majority Consider these examples Reliability Center Inc 6 e 80 of a bank s assets are representative of 20 or less of its customers e 80 of the care given in a hospital is received by 20 or less of its patients Well it is no different in industry 80 of the losses in a manufacturing facility are represented by 20 or less of its failure events This means that we only have to perform root cause failure analysis on 20 or less of our failure events to reduce or eliminate 80 of our facilities losses Now that is significant In order to determine the significant few you must perform a few simple steps 1 Total all of the failure events in the analysis to create a global total loss 2 Sort the total column in descending order i e hig
16. ure of the interviews If you are not careful the process may begin to look more like an interrogation than an interview to the interviewees You want the interviewees to be comfortable 3 Allow the interviewees to see what you are writing This will set them at ease since they can see that the information they are providing is being recorded correctly NEVER use a tape recorder in a OA session because it tends to make people uncomfortable and less likely to share information 4 Never argue with an interviewee Even if you do not agree with the person it is best to accept what they are saying at face value and double check it with the information from other interviews Reliability Center Inc 4 The minute you become argumentative it reduces the amount of information that you can get from that person and others 5 Always be aware of interviewee s names There is nothing sweeter to a person s ear than the sound of their own name remember Dale Carnegie If you have trouble remembering simply write the names down in front of you so that you can always refer to them 6 It is important to develop a strategy to draw out quiet participants There are many quiet people in our workforce who have a wealth of data to share but are not comfortable sharing it with others We have to make sure that we draw out these quiet interviewees in a gentle and inquiring manner 7 Be aware of the body language of interviewees There is an entire science b
17. us some indication as to the potential opportunity in our facility For instance we produce widgets in our facility and we currently produce 150 000 per year However our potential is 300 000 per year Now we have a gap of 150 000 widgets per year The final step in the preparation stage is to design a preliminary interview sheet and a schedule of people to interview to collect the data This will be the form to assist you in collecting the data from your interviews To put this all into perspective the following is a checklist of items to be covered prior to beginning an OA OA Preparatory Steps Completed Y N Define the system to analyze Define failure Draw a contact diagram Calculate the gap Develop data worksheets Develop preliminary interview schedule OA preparation checklist Step 2 Collect the Data There are a couple of ways of collecting the data for this analysis You can rely on your computer data systems i e Computerized Maintenance Management System CMMS or you can go to the people who are closest to the work and get their input Although each has its advantages interviewing is probably the best since the information will be coming straight from the source If you have enough confidence in your data systems then it will be useful to use that information to later validate your interviews At this point let s discuss how you would use interviews to collect the data for your analysis
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