X hits on this document

PDF document

Measuring Overall Craft Effectiveness (OCE) - page 10 / 13

79 views

0 shares

0 downloads

0 comments

10 / 13

The Maintenance Excellence Institute

How OCE Impacts Your Bottom Line: Part II – Page 10

Example C: What if We Increase Wrench Time from 30% to 50% and Craft Performance from 80% to 90% When we look at the combination of improving both craft utilization and performance, we see an even greater opportunity for a return on investment. Let’s now look at a very realistic 20 point improvement in Craft Utilization and a 10 point increase in Craft Performance for the same 20- person craft work force shown back in Table 3 and having an average hourly rate of $18.00.

  • Baseline Cost Per Direct Maintenance Hour @ 30% Utilization and 80% Performance 20 crafts x 40 hours/week x 52 weeks/year x .30 (CU) x .80 (CP) = 9,984 Direct Craft Hours/Year = 499 Direct Hours/Craft Position Baseline Cost: $748,800 ÷ 9,984 Direct Hours = $75 Cost Per Direct Craft Hour

  • Improved Cost Per Hour With 50% Craft Utilization and 90% Craft Performance 20 crafts x 40 hours/week x 52 weeks/year x .50 (CU) x .90 (CP) = 18,720 Direct Craft Hours/Year = 936 Direct Hours/Craft Position Cost Per Direct Craft Hour @ 50% Craft Utilization and 90% Craft Performance = $40 $748,800 ÷ 18,720 Direct Hours = $ 40 Cost Per Direct Hour

  • Total Direct Craft Hours Gained = 8,736 Total Direct Hours Gained (87% Increase) 18,720 Hours – 9,984 Hours @ Baseline = 8,736 Direct Craft Hours Gained 8,736 Hours Gained ÷ 9,984 Hours @ Baseline = .87.5 x 100 = 87% Gain in Direct Craft Hours

  • Total Gain in Equivalent Number of Craft Position: 17 Equivalent Craft Positions 20 crafts x .87 (%Hours Gained) = 17.4 Equivalent Craft Positions 8,736 Hours Gained -:- 499 Hours/Craft Baseline Average =17.4 Equivalent Craft Positions

  • Total Gained Value = $655,200

Gain of 8,736 Direct Craft Hours x $75 Baseline Cost/Direct Hour =$655,200 Gained Value

$655,200 -:- $748,800 = 87 % Gain from a Baseline of 30% Wrench Time and 80% Craft Performance

Summary of Our Previous Examples: The previous examples have illustrated that increasing OCE provides greater craft capacity and gained value from increased wrench time. Improving Craft Performance in combination with improving Craft Utilization simply compounds our return on investment; an astronomical amount of 87% as shown in Example C.

Improve

Craft Labor

Gained

Examples

Baseline

To:

Gain

Value

A

CU @40%

CU@50%

5

$187,200

B

CU@30%

CU@50%

13

$497,952

C

CU@30% & CP@80%

CU@50% & CP@90%

17

$655,200

Document info
Document views79
Page views84
Page last viewedSat Dec 03 15:50:21 UTC 2016
Pages13
Paragraphs279
Words4944

Comments