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Executive Guide to Leveraging OEE

Integration has promised a connection from the Shop Floor to the Top Floor – so where do we stand?

For years, senior management has worked to close the gap between the shop floor, and nowhere is the rift any wider than in the leveraging of Overall Equipment Effectiveness (OEE).

We must cross this divide and move beyond a good enough approach. Too often, plants are spinning their wheels to collect OEE data – only to find the information they gather is not compressed into a strategy to incite change or create value.

Strategic leaders promote action and streamline accountability in the plant. Taking advantage of OEE accomplishes both tasks. It allows us to reach production goals and inspire our teams.

More than a calculation – OEE is at the cornerstone of strategy in continuous improvement.

Today it is no longer enough to capture data on equipment effectiveness. This information must be used to drive change throughout the production environment. That process can prove difficult, and consequently, many plants fall short as they try to harness value from their OEE calculations.

We will review the most common issues encountered by senior leadership in driving business value with OEE and offer several suggestions that can help us leverage the strategy aspects of OEE.

Manufacturing processes are typically automated. Ironically, the information we take out of the machines is frequently not.

What does this do to data collection?

It suggests that information on the availability, performance and quality of each machine is still difficult to grasp.

Scrambling to acquire that data is an ineffective use of time. Production information is far more valuable when it is:

• Accurate

• Provided in real-time

Precise data speaks for itself in importance. Yet, many plants receive incorrect OEE information because they gather statistics from a team member, rather than the machine itself.

Issue 1: Automate OEE Data Collection

Tomorrow may be too late to make changes. Production requires challenges to be caught and fixed as they come up, in real-time.

Issue 1: Automate OEE Data Collection - Example

administrator is responsible for checking the data that was collected on Monday and producing a report on Tuesday for the team.

Is this sufficient?

No. Tomorrow may be too late to make changes. Production requires challenges to be caught and fixed as they come up, in real-time. If performance is down, and negatively affecting production – the team must be poised to fix it. This is exactly where manual efforts fall short.

An operator, alone, typically cannot tell why an issue has occurred. Often they do not have access to the data they would need to determine this information and, as described in the scenario above, they may not even consider the stoppage to be downtime.

Real-time information is crucial to efficient manufacturing. It is the only way to stay in the game – and ahead of the competition.

Here is an example.

Let’s look at downtime. You may ask the operator to take down each stoppage during a shift, on a single line. Unfortunately, with stoppages typically averaging 60 seconds or less, the operator may not see these little stops as official downtime, or feel they have the bandwidth to address each, given there is no need to call maintenance.

While you can look into these numbers later on to find out the starts and stops, you will not have the detail surrounding the causes.

Manufacturing operations management software, on the other hand, relies directly on the machine to extract the data. It can plug straight into existing PLCs, HMIs, and other platforms. This method of OEE information capture is significantly more effective than introducing the challenges associated with human data collection.

Yet, correct data alone is not enough.

Why? Consider a scenario where we have software in place.

The right information is gathered but, perhaps, not consumed immediately. It may be that a plant

Today it is no longer enough to capture data on equipment effectiveness. This information must be used to drive change throughout the production environment. That process can prove difficult, and consequently, many plants fall short as they try to harness value from their OEE calculations.

Issue 2: Applying the Metric to Business Process Improvement

Remember, the aim is to add value by leveraging OEE to improve business practices. Consider assigning direct responsibility to an Issue Champion who can perform regular production reviews and advance plant performance.

Creating a leader and following this path establishes:

• A common focus – to identify losses and establish priorities

• Actionable changes – that can be applied to the areas that are experiencing issues

These two items have the power to dramatically impact business and shape company perception. This is precisely where OEE generates value and incites change – by identifying issues, engaging operations, and exceeding expectations.

Truly the strategy around OEE must tie directly to value, or it will fail. Therefore, the next step is to drive process improvement and – as with many initiatives – that requires top-down support.

Managers must be willing to get involved to ensure their objectives are met. These direct efforts shape the team and produce the focus required to improve business processes.

Once your goals and objectives have been shared, it is time to empower the team.

Business initiatives must translate into direct actions on the plant floor. To do this, see where your team stands today, benchmark your current performance, and assign a leader to cement commitment and optimize overall efficiency.

Consider assigning direct responsibility to an Issue Champion who can perform regular production reviews and advance plant performance, establish priority, and create actionable change.

How Can OEE Be Strategic? At the highest levels, where budgeting is involved, visualization becomes key to strategic decision making.

Issue 3: Displaying the Correct Information Visually with Urgency

What is the Value of Visualization?

If you were to enter a sports bar in the middle of a football game, where would your attention be drawn?

Likely, it would land on a large TV screen, where the action is unfolding. As a center of the bar – that TV would demand to be seen.

This concept is also true in the plant, and helps illustrate the value of visualization. Real-time OEE displayed prominently on the plant floor keeps everyone motivated and engaged.

Empowering teams to see measurable, impactful data is a quick way to put OEE front and center and display progress toward lean and TPM (total productive maintenance) goals.

Here are a few ways to add visual elements to the factory floor:

• Big screen monitors

• Journaling in real-time

• Production progress bars

• Dashboards that support lean and TPM

Teams are made consistently aware of their targets by simply looking at the colorful cues that appear on the screen.

Green confirms everything is on track. Yellow indicates an area of concern. Red is a critical issue requiring immediate action.

Information is constantly accessible and actionable, by the right people, in real-time. The plant takes on the same excitement and comradery experienced just before a game kicks off.

OEE is a Strategy, Not Just an Equation. More than a calculation – OEE is at the cornerstone of strategy in continuous improvement.

Be a Catalyst for Change in the Business

creating transparency throughout the supply chain.

In recent research, the distribution of OEE performance was found to vary across a number of discrete manufacturing industries, providing a key benchmarking opportunity for individuals looking to improve their efforts3.

OEE puts power back in the hands of these innovators. As a measure of productivity, OEE uniformly connects a network of plants, reducing critical areas of waste and redundancy.

The result is vital visibility into every system on the plant floor – in one, simple tool. Islands of automation are eliminated as OEE creates a common conversation among systems, capturing the business intelligence leaders need to make essential decisions.

How can OEE be strategic?

It is not uncommon for plants to be issued incremental budgets, where this year is a reflection of last year’s expenses, with a little extra added for estimated growth and inflation.

OEE provides tangible data on plant equipment and investment needs, effectively replacing the need for an incremental budget.

As a metric of loss, Overall Equipment Effectiveness sheds light on where to apply resources effectively, maximizing profit potential in the planning and budgeting process2.

Increasingly, Chief Financial Officers (CFOs) are transforming companies. A unique opportunity emerges where CFOs are examining critical needs using OEE.

Herein lies the opportunity. Leaders can exist anywhere in the organization, cutting costs and

Now is the time to create common ground between the top floor and the shop floor.

Clearly the three major issues plants face each day:

• Automating OEE data collection

• Applying the metric to business process improvement

• Displaying the correct information visually

These major issues can be alleviated with a software solution. Quality management software strengthens the effectiveness of OEE to form a closed-loop quality environment. It finally crosses that divide we have been waiting to eliminate.

Now is the time to create common ground between the top floor and the shop floor. OEE is this conduit and manufacturing operations software is the supporting structure to keep that bridge in place.

Standing out among these sectors, is the impact that Quality Management Software has on OEE. As shown above, executives with a software solution (88% OEE) outperformed companies in both the planning stages (84%) for software, and those with no plans for an implementation (79.5%)4 .

Global leaders are taking the steps to put OEE in place at a strategic level, using software to accomplish this goal. In 2012, an international food company saw a significant decrease in downtime and increased a single line’s production to 4.8 million cans per year using a leading software solution for OEE and manufacturing operations: TrakSYS™.

Their results are displayed in the chart below.

As an industry leader, this company promoted action and streamlined accountability in their plant, taking advantage of OEE to accomplish both tasks.

Strategically approaching OEE in this way allowed the plant to reach production goals, and inspire their teams, driving dramatic business value.

So Who Can We Look to as Leaders?

A flexible, powerful and real-time software application, TrakSYS™ was specifically designed to bring overall improvement to manufacturing operations. The software deploys quickly, integrating with existing infrastructure to easily interface with critical systems and enhance productivity and OEE.

Parsec partners with key organizations, like the one above, using TrakSYS™ to essentially help with:

For the above unnamed international food company, TrakSYS™ helped to:

• Elevate the quality of products

• Implement real-time operations management, resulting in:

• 13.5% Increase in Overall Equipment Effectiveness (OEE)

• 6.36% Improvement to Adjusted Productivity

• $84,000 Total Labor Savings, Per Line, in a Single Plant

• Enhance the output and productivity of the existing equipment in their plant

A flexible, powerful and real-time software application, TrakSYS™ was specifically designed to bring overall improvement to manufacturing operations. The software deploys quickly, integrating with existing infrastructure to easily interface with critical systems and enhance productivity and OEE.

1. Sohal, a., Olhager, J., O’Neill, P., Prajogo, D. (2014) Implementa-tion of OEE – Issues and Challenges. Retrieved from: https://www.iei.liu.se/prodek/pic/filarkiv_forskning/conferences/1.242513/Sohaletal-ImplementationofOEE-IssuesChallenges-APMS2010.pdf

2. Iannone, R., and Nenni M. (2014). Managing OEE to Optimize Factory Performance. Retrieved from: http://cdn.inte-chopen.com/pdfs-wm/42996.pdf

3. Littlefield, M. (2012) Overall Equipment Effectiveness: Benchmark Data by Industry. Retrieved from: http://blog.lnsresearch.com/blog/bid/155988/Overall-Equipment-Effectiveness-Benchmark-Data-by-Industry

4. Shah, M. (2013) Companies With EQMS Outperform Others in OEE Performance [DATA]. Retrieved from: http://blog.lnsresearch.com/blog/bid/179538/Companies-With-EQMS-Outperform-Others-in-OEE-Performance-DATA

Sources

TM

About Parsec

Parsec is the developer of TrakSYS™, a proven operations management software application and solution platform designed to significantly improve manufacturing processes. Parsec is committed to providing best-in-class products and solutions to our worldwide community of clients to assist them in optimizing their manufacturing operations. There are thousands of TrakSYS™ licenses in use around the globe in a wide variety of Industries.

TrakSYS™ helps manufacturers to maximize asset utilization and efficiency, increase capacity with no new capital equipment, reduce production costs, decrease lead time, and improve profitability. For more information about Parsec and TrakSYS™ please visit the corporate website at www.parsec-corp.com.

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