Asset provision and how to trigger it


        The level of asset provision is the average OEE of capacity pool in one specific duration such as one year. One month after the asset provsion, the average OEE of capacity pool can be calculated.
        Asset provision level is one core KPI of enterprise's competitiveness because the percentage of assets' cost  including depreciation, maintenance, energy consumption and labor usage etc. in the operational cost is more than 60%. The best provision level in the world is between 65% and 75%.
        Asset provision includes asset purchase, asset relocation, asset scrap and asset sales etc.
        Capacity pool is the combined capacity of series of platforms which can produce same categories of SKUs. When calculating provision level, the OEE of capacity pool should be combined as weighted average of different platforms such as equipment producing bread and lines fermenting beer. When triggering one specific provision action, the OEE  of capacity pool must be calculated by same separated platforms. Bread lines cannot be calculated together with beer ones. Besides, when having new provision, capacity pool must include all of the same platforms in the whole enterprise. When having asset relocation, the same platforms of the capacity pool can be only in one area or specific asset combination.  
        Asset purchase must consider all of the same platforms in the whole enterprise. Asset relocation only consider the same platforms of one specific combination such as the same platforms in one or several plants which belongs to one specific enterprise.
        Triggering of provision is based on the market change or production change if the improvement of OEE has no space any more in current management level of one production unit. If there is improvement of OEE, never consider provision. Based on the production data of capacity pool in the history, the market trend can be observed. If there is one flat trend line, there is no necessaty of asset provision. If the trend line decrease, separate the idle assets from the financial register should be triggered. Only if the trend line increase, the asset purchase can be triggered step by step to avoid cliff provision which may result asset wall or redudance.