When OEE Isn't Enough
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| Line Dashboard -- summarized OEE and components by shift with Top 5 Reasons for downtime, cycle time analysis and scrap percent. |
There are three general ways to reduce the cost of an automated process: to reduce unproductive machine time (availability), to reduce cycle times (performance), and to reduce waste or scrap (quality). OEE certainly can help determine whether machines are producing at their maximum capacity, but a major drawback of tracking OEE alone is its inability to offer data that can help determine how to make a machine produce more.
So, rather than asking whether a plant should implement an OEE system, perhaps a better starting point is to determine whether the plant needs to reduce costs. If so, the next step is to identify immediate priorities -- such as decreasing downtime, reducing cycle time variation, improving quality or reducing overtime -- that can help achieve this goal. In most cases, measuring OEE alone will not help a manager determine how to meet these goals.
In addition to availability, manufacturers need detailed, machine-specific tracking at all times, including both downtime and unproductive time, along with contextual data that shows reasons behind these states. Beyond performance, accurate cycle times by product, shift and operator are needed. And rather than simply assessing quality, manufacturers should measure data on scrap reasons and counts.
In some cases, a goal like increasing production may be counterproductive to cost reduction. A large pet food manufacturer, for example, identified nearly $400,000 in potential savings simply by using performance management software to gather detailed data from one machine for one hour. The manufacturer began collecting data on the weight of every bag produced and quickly found that the machine was overfilling every bag by five percent.
This finding would never have been identified within the context of a single OEE calculation. The manufacturer actually could have improved its OEE score by producing more bags per cycle (performance), but in this case, higher "performance" in OEE terms would mean giving away even more product.
