Basic Description
Loss management relates to the identification and elimination of losses such as minor stops, speed losses, process failures, quality losses, etc. It involves data analysis, prioritization of efforts, and the elimination of losses through tools such as standards, center lining, and inspections.
In the world of operations, effectiveness and efficiency are king. Companies strive to get the most out of their resources, whether it’s equipment, labor, or materials, while minimizing waste and unnecessary downtime. However, achieving peak operational efficiency is easier said than done. Losses—whether they stem from setup and adjustment losses, minor stops, speed losses, process failures, or quality issues—can chip away at productivity and profitability. Loss management is a structured approach aimed at identifying, prioritizing, and ultimately eliminating these losses. It is a cornerstone of continuous improvement and is critical for companies seeking operational excellence.
Understanding Loss Management
At its core, loss management is about identifying where losses occur in the production process and taking systematic steps to eliminate them. Overall Equipment Effectiveness (OEE) and Total Effective Equipment Performance (TEEP) are the tools we using to find these losses.
Analysis of capacity and its utilization comes through 2 basic measures: OEE & TEEP.
- OEE looks at how effective we are with the scheduled time to run our assets
- TEEP looks at how effective we are with our installed asset capacity
Typical organizational objectives, such as cost reduction, quality of product, increased throughput and a safe, reliable work environment are all affected by the inability to achieve installed capacity. It should be understood where each asset’s losses are contributing to keeping you from achieving or exceeding the organizational objectives. This is achieved by understanding and utilizing these 2 measures to drive out losses.