Put your KPIs where you can see them

Virginia Beach, VA-based Hermes Abrasives, a global manufacturer of industrial coated abrasive products, has always had a strong culture and excellent efficiency numbers but the need to improve its throughput-to-capacity ratio drove it to seek out tools to improve – without making capital purchases, and working within the space constraints of its current facility.
By James A. Feltman June 15, 2008

Virginia Beach, VA-based Hermes Abrasives , a global manufacturer of industrial coated abrasive products, has always had a strong culture and excellent efficiency numbers but the need to improve its throughput-to-capacity ratio drove it to seek out tools to improve %%MDASSML%% without making capital purchases, and working within the space constraints of its current facility.

Hermes developed its own metric-based measurement system, but found that the system was complex and difficult to use because it required machine-specific data. This made it a challenge to expand its use across the enterprise. After researching many options, Hermes chose Overall Equipment Effectiveness (OEE) because it reduces potentially complex production information into three simple factors: availability (downtime loss), performance (speed loss) and quality (quality loss).

OEE was also chosen because it is a widely accepted measurement tool that can easily be deployed across all assets in a plant or enterprise. “OEE is easier and cleaner, and the elements just made sense,” said Gordon Jackson, production manager at Hermes Abrasives. “OEE is very much on the forefront of our operation.”

Getting started

Hermes launched its OEE program by providing training and support materials to managers and plant-floor personnel. The management team also established an OEE benchmark for each line and agreed upon a realistic set of goals for improving its processes.

It was important to fully understand how OEE works so that the company’s efforts were focused on addressing the right problems. “The aim is for them to take ownership, suggest improvements and manage those improvements,” said John Tilbrook, group vice president of Operations.

Hermes worked hard to achieve a level of asset/process comparability across its 13 manufacturing facilities worldwide. Hermes’ U.S. plant became a benchmark. Its goal: help its 13 plants across the world to identify corporate “best practices.” For example, the company has what Jackson calls “mini-kaizen events” for each line. “We attack how we can improve performance or availability,” said Jackson. “We break down all the issues that affect those metrics, and then we work to resolve them.”

Before OEE

Initially, Hermes collected performance data manually and entered the information into a spreadsheet at the end of the shift. It quickly became apparent that manual data collection is time-consuming and can sometimes yield inaccurate results. Furthermore, because manually collected data is subject to human error, what is reported is often discounted or even disregarded by management and cannot be used for detailed root-cause analysis.

One of the biggest weaknesses in manual data collection is that critical OEE data such as reduced speed operation and small stops are almost always overlooked. And, because information is collated at the end of the shift, there is a delay in reporting metrics back to the plant floor, making it impossible to respond swiftly to events that can sap productivity.

Real-time visibility

Seeing where you are going is more productive than seeing only where you have been. It’s like trying to drive the Autobahn by looking in the rear-view mirror. Therefore, Hermes installed visual displays on each line as part of the initiative to automate the data collection process and to quantify how each line was performing in real time.

Hermes quickly realized the value in implementing a comprehensive, strategically-aligned, real-time performance measurement system, and that much more significant gains were possible by displaying its real-time production goals and the actual production output to the plant floor. KPIs are shown in red or green depending on whether they are meeting established goals. This helps plant floor employees know “at-a-glance” if they are performing to expectations. In addition to being a performance management tool, they have helped Hermes significantly sustain its productivity gains.

One of the most important factors in sustaining the gains involved convincing management that the raw numbers are less important than the positive rate of change. For example, plant floor teams began using the displays to monitor their output and adapt their behavior accordingly during the day. “One of the biggest challenges was learning how to effectively communicate at a level that could enhance the effectiveness of the team,” said Tilbrook. “Once they realized that the data was there to help them manage the results, the results were surprising. The scoreboard was there to enable operators to judge for themselves whether they were winning or losing.”

Now thanks to OEE and the displays, issues and negative trends are quickly identified. Managers and plant floor personnel are able to respond more quickly and efficiently. Negative trends in the manufacturing process are exposed and the appropriate staff notified before the process is seriously affected. Equipment efficiencies are no longer affected by problems going unnoticed or unresolved.

“Since installing the displays in our wide belt department, we have made good progress %%MDASSML%% and it shows in the OEE rates,” Jackson said. “They are part of our culture now.” People are competitive by nature, and when they can see real-time goals associated with real-time performance data they will work together as a team to win.”

“We have made a few other minor changes within the department, but I think the displays have been the single most influential addition,” said Cindy Woodward, process engineer at Hermes. “The operators know where they are in real time and have a determination to meet their daily goal.”

Hermes reported that in the first 10 months of monitoring and managing OEE, it achieved a 10%-20% improvement in its OEE measurements. One process even showed gains ranging from 29.6% to 49.0% in OEE for that line. To date, all processes where OEE has been effectively introduced have shown improvement.

While there have been challenges, Hermes reports that without monitoring OEE and providing real-time performance feedback it would not have seen the remarkable changes that have improved its manufacturing efficiency and effectiveness.

Author Information
James Feltman is sales manager of