Increasing Profitability by $12MM Through a Risk-Based Reliability Improvement Project
- A manufacturing and packaging facility needed a solution to help increase asset utilization and increase profitability.
- PinnacleART facilitated a risk-based reliability improvement process to help the facility identify reliability gaps and opportunities for improvement.
- As a result, the facility has the potential to achieve a 20 percent increase in asset utilization, resulting in an annual profit increase of over $12 million.
A U.S. Lubricant Manufacturing and Packaging facility blends and packages various engine oils, process oils and industrial lubricants to be distributed worldwide. In order to meet output goals, the facility identified the need to optimize its Preventive Maintenance (PM) program, and identify reliability gaps preventing them from achieving desired output.
In 2016, this particular facility faced a combination of complications, leading to inefficient operations. The facility’s largest problem was low asset utilization, due to excessive planned and unplanned downtime, as well as production slowdowns. This low asset utilization caused lower profitability, as the facility was not able to operate at full capacity.
While dealing with low asset utilization, the facility also had relatively high personnel turnover rates within the maintenance and operations teams. Because of the high turnover, the average experience level of the personnel was decreasing, potentially leading to additional inefficiencies.
The low capacity utilization, combined with a high product demand created an increasing reliance on a third party to supplement packaging of its product. This resulted in increased packaging costs, further reducing profitability.
Based on all of these challenges, the facility identified the need to formally assess performance gaps and identify potential improvement opportunities.