Beyond OEE: 5 steps to success

Congratulations! Your company has chosen Overall Equipment Effectiveness as the primary metric to help you unlock hidden capacity within your manufacturing operation.


Congratulations! Your company has chosen Overall Equipment Effectiveness as the primary metric to help you unlock hidden capacity within your manufacturing operation. Applying OEE to your production processes will help you benchmark your current levels of performance; find and eliminate major bottlenecks and constraints that are limiting your production throughput; and help you achieve World Class levels of performance. Now all that’s left to do is implement OEE within your factory. So, what does this mean and how do you do it?

Fulfilling the promise of OEE is no easy task. It takes a focused approach, the dedication of your operations personnel and the right combination of technology and best practices to unleash the full potential of your manufacturing operation. But making the most of OEE does not have to be time consuming or painful. What are the critical success factors for improving productivity and why are they important? Many companies have quickly and measurably improved the performance of their operations by taking these five vital steps.

1. Start a continuous improvement program

The best way to ensure that OEE gets the attention it deserves is to build a continuous improvement program around it. Present the program to senior management; detail the benefits that such a program will have for the company; and ensure that you have their buy-in before moving forward. In some cases, you may find out that a similar productivity improvement program is already in place, and that you can leverage it to get the needed management buy-in. With management’s support and direction, there is less resistance to assigning primary job duties to employees that focus on improving OEE.

Tip : Make sure to obtain a benchmark OEE value for your existing manufacturing processes and to set realistic business objectives and goals for the program %%MDASSML%% for example, “Increase OEE for packaging operations by 10% in 1 year.”

2. Automate the collection of performance data

There are specific types of shop-floor data that must be collected to correctly calculate OEE and report it effectively. Usually, gathering this data manually is time-intensive and can yield inaccurate results. Having operators collect equipment downtimes and performance loss information on a clipboard typically results in information that people have little confidence in. Typically, manually collected data lacks the needed context and details for effective root-cause analysis and ranking of improvement opportunities.

Quite often, crucial data related to short stops is missing, which could lead to further inaccuracies in calculating the actual OEE. Using software applications specifically designed for real-time performance management to automatically collect productivity-related data needed to compute OEE yields accurate information and allows operators to focus on their primary job duties: keeping the process running. Since not all factors affecting productivity are equipment related, the right solution must allow for capturing and analyzing the impact of issues such as operator training, product mix, suppliers, scheduling and maintenance. Automatically capturing this data helps identify hidden trends and removes bottlenecks that contribute to substandard performance.

Tip : Combining automated data collection with operator observations and feedback adds context to the information behind OEE, making it more actionable and useful. Real-time performance management software provides operators with an interface for collecting this information that is non-intrusive to existing automation and control systems.

3. Use OEE in real time

While historical analysis of OEE gives great visibility into the root causes of poor performance, it is still only historical and doesn’t allow operators to correct detected problems in real time to meet the current shift production targets. Viewing OEE in real time gives operators the tools to minimize the impact of different performance losses as they occur.

Just a small percentage drop in OEE can equal a large reduction in line output. For example, a 4% drop in OEE (from 40% to 36%) results in 10% fewer units produced during one shift. That’s a big loss that can be prevented by responding to changes in OEE at the first sign of problems. Real-time OEE also allows management to set production goals for achieving clearly defined OEE numbers and to define escalation procedures when OEE is substandard for certain periods of time. Management can choose to reward operators for achieving certain levels of performance, which provides incentives for them to focus on their performance numbers and to find new ways to improve them.

Operators are key components in any continuous improvement initiative. Giving them the right tools in real-time to do their jobs more effectively sets everyone up for success.

Tip : Large-screen displays and marquees are ideal for keeping everyone aware of OEE trends and goals in real time. Put one on the shop floor, in a main hallway or even in the breakroom to achieve maximum visibility.

4. Implement Web-based reporting

Having all of the necessary data required for OEE analysis is of little value if people within your organization don’t have access to it when needed. Sharing OEE through Web-based reporting allows the right people to have access to the right information at the right time. Support for different views of OEE data and role-based reporting allows different groups within your organization to see the details behind OEE that have maximum value to their respective roles.

Maintenance engineers may be interested in how many times different pieces of equipment break down. Line supervisors would prefer the total amount of downtime based on its effect on productivity. People in the finance department may require reports that show the total cost of poor performance. Configurable Web reports that combine shop-floor data with other related process information make these different OEE views possible.

Web technologies allow reports to be run from multiple locations without having to export the information into file formats where data must be manually manipulated and graphed to produce valuable manufacturing intelligence. Web reports can also support drill-down from high-level OEE data to the detailed information behind the numbers. Predefined one-click reports allow users to get to the information they need immediately without having to sort through other information that isn’t as relative to their role and responsibilities.

Tip : Schedule key reports to be automatically published and e-mailed to managers and supervisors prior to weekly meetings. This way you can share actionable information in conference rooms that don’t have computers and projectors for displaying reports from the Web.

5. Leverage an existing improvement methodology

OEE is an effective metric when used with improvement processes such as TPM, Lean manufacturing and Six Sigma. It provides a consistent way to measure and validate the success of improvement made by following one of these methodologies. For example, consider the effects of combining OEE with Six Sigma’s DMAIC methodology. DMAIC is an acronym for a five-stage quality strategy used for improving individual processes within a business. With DMAIC, you Define the process or problem to be addressed; Measure the process’s performance; Analyze the resulting data to determine root causes of poor performance and opportunities for improvement; Improve the process through creative solutions; and Control the solution to ensure process improvement.

OEE is an easy-to-use metric that allows Six Sigma Black Belts to quickly and accurately determine where bottlenecks and constraints exist, measure their impact on the production process and understand which corrective actions will improve performance the most. Multiple iterations through the DMAIC cycle allow management to consistently increase the target goals for OEE until the metric reaches World Class levels.

Regardless of market conditions and product demand, manufacturers will always need performance management. When production processes are running at peak efficiency, it allows you to ramp up production with existing equipment and assets during good times, and to control costs during bad times.

Tip : The Pareto Principle states that 80% of your problems or losses result from 20% of your known causes. Pareto charts clearly identify what these major causes are, making it a key tool for improving productivity regardless of methodology.

Author Information
David Ray is the product manager at Parsec Automation Corp., a provider of real-time performance management and enterprise manufacturing solutions. His 10 years of experience include manufacturing processes and software development. He has a Bachelors degree in Computer Science, and is a Certified Six Sigma Black Belt.

Manufacturer paints improvement by the numbers

Located in Huntersville, NC, SHUR-LINE is a leading designer and manufacturer of a full line of innovative paint application and paint-related products for do-it-yourself consumers and professional contractors. Although the company has had a strong record of operating efficiency, it recognized a need to increase overall product output. However, the challenge was to increase capacity by increasing OEE, but without adding new equipment.

SHUR-LINE was able to do more with what it already had by implementing a real-time performance management software solution. The company identified the source of short equipment stops, excessive time spent during changeovers and startups, as well as the root cause for long downtime events.

“Without purchasing additional equipment, SHUR-LINE’s capacity increased immediately by more than 18% and we were able to completely automate OEE tracking, saving thousands of man-hours that were before used to manually collect and log data,” said Dave Finch, SHUR-LINE’s senior Lean engineer. “By making existing machines more efficient, manufacturers are now able to measurably improve the performance of their operations in a shorter period of time. Our downtime reduced by approximately 1,080 hours and OEE increased by 16% within the first year. This equates to a major savings of time, effort and money.”

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