A unique analysis called Manufacturing Opportunity Index (MOI) is the next approach we discuss. In the last Caravel asset utilization approach blog, Part 3, we focused on the run time component of asset availability. Based on our experience in a number of different industries, there are other factors that can also affect asset utilization.
The expansion of traditional asset utilization calculations provides a more robust picture of how well the facility is running and how much additional production may be obtained from existing assets. Caravel Solutions’ unique analysis, called Manufacturing Opportunity Index (MOI), utilizes these factors and places them on a similar profitability improvement scale as asset utilization.
Categories for Manufacturing Opportunity Index (MOI)
- Compliance events – resulting from running at too high or too low operating rates, resulting from downtime events, permit limitations or changes, long term business impact
- Quality – includes shutdown and startup off quality, meeting quality specifications through production blending, exceeding quality specifications, rerunning off-specification products or intermediates
- Yield – changes to feedstock, changes to product mix, operation of intermediate equipment, recycle, waste
- Fixed costs – impact of reliability on fixed costs over time, impact of downtime and repairs, etc.
- Variable margins – variations due to yield, energy, raw materials availability and quality, high or low margins at the time of downtime events, seasonality
- Energy effectiveness – reliability of sources, energy used per unit of production
SEE ALSO – Caravel Solutions Blog – Manufacturing Performance Optimization
Consideration of these additional categories in conjunction with asset utilization gives a more complete picture of the improvement opportunities in a given facility or system. This allows identification of typically three to five KEY opportunities to increase profitability of the business.
If you believe your team needs assistance building or benefiting more from an asset utilization process, contact us at [email protected]. We can work with you to identify options and develop an effective path forward as well as providing support during implementation.
Written by Allen Lasater