That is the number one question facing most manufacturers. The answer is often to increase overtime, hire new staff or invest in new equipment. Yes, these measures may increase production, but it’s more than likely that they will adversely affect profitability.
So how do we do it?
The simple answer is to focus on the production process and look for bottlenecks. This can be as simple as walking through the factory and viewing where there are stoppages or goods waiting to be processed.
Another area that can be useful is understanding the overall equipment effectiveness (OEE) score in your plant. The OEE score is strategic tool that benchmarks and analyses the production process with the primary goal to improve production processes.
It’s crucial to measure the percentage of planned production time that is productive. This exercise can be shocking for some manufacturers when they realise that their equipment is only 60% productive. Adding more shifts or more people will increase inefficient production, but solving the root cause of the problem will improve efficiency and profitability, and that’s what measuring your OEE score will help you to do.
Word of caution
While OEE is a powerful tool it’s important to understand that it can sometimes produce more problems if all equipment is running at peak capacity. The reason for this is that some machines may have higher output than others, which will result in more bottlenecks. The goal is a balanced production line with minimal waste, that produces enough goods to meet customer demand. You may find it more effective to operate a machine for 50% of the time if it produces twice as much as the next machine in the production process.
When working with organisations on a business transformation process, we usually only focus on the OEE of machines that are causing a bottleneck. The objective would be to resolve the issues on that machine in order to streamline the production process and eliminate wasted time and defects.
What should your OEE score be?
An OEE score of 100% indicates perfect production with no defects and no down time. Only world-class companies can boast this impressive score. The benchmark for what is considered a good score depends on the type of manufacturing and the equipment being used.
We are usually satisfied if our clients can achieve an OEE score of 85%, and this is a realistic goal for most manufacturers. It’s not uncommon for us to see an OEE score of 40% when we first start to work with a new client. That tells us that there plenty of room for improvement.
How do you calculate the OEE score?
The OEE score is calculated with the following formula:
availability x performance x quality x 100.
Let’s break down each of these elements.
Availability is a measure of equipment operating time. This takes into account all planned and unplanned events that stop production for five or more minutes. To calculate the availability of your equipment, use the following formula:
availability = operating time/ planned production time,
where planned production time is the length of time that the machine is expected to be operating.
Performance is a measure of whether the equipment is operating at its maximum possible capacity. To calculate the performance of your equipment, use the following formula:
performance = (ideal cycle time x total pieces) / operating time,
where the ideal cycle time is the fastest time to manufacture one item and total pieces is the number of pieces manufactured during the operating time.
Quality is a measure of how many of the manufactured pieces meet quality standards. This takes into account any rejects and re-works . To calculate the quality of your products, use the following formula:
quality = good pieces / total pieces.
Using the OEE score
Once an organisation has determined the OEE score for a machine, we recommend that they also calculate an OEE score for each shift. We often find that some shifts operate more efficiently than others.
Calculation of the OEE score can help management benchmark their business against similar businesses and measure improvements in the manufacturing process. The OEE is not always a good tool to use to motivate production staff, and we usually recommend more focused and meaningful goals for the people on the factory floor.
How to improve the OEE score
Many factors can affect your overall OEE score. These may be machine breakdowns, slow changeovers, rejects, training issues, slow running times or even delays with a previous process. The good news is that all of these problems can be resolved.
If you’re not sure where to start, call us on 1800 104 899 we’d love to help. We work with manufacturers every day to improve efficiency and drive profitability. Click here to contact us.