Importance OEE

One of the main problems for global operating manufacturers, is the challenge  to compare the performances of various production sites.Although more and more global ERP systems are in place, retrieving transparent reports still proves to be very difficult. OEE can make the difference

The obvious challenge is of course applying an overall standard throughout all the production sites. However, difference in culture, business maturity of the individual sites, local management and even regulation can be a drawback to achieve such transparency. Also the choice of the applicable key performance indicators, and more to get consensus on it, is a difficult road.

The lack of standards withholds companies to unlock a lot of their potential. Suboptimal production processes not only have an effect on the cost of production. Also other departments such as distribution, sales, maintenance suffer from it.

Global information.
A second strategic issue is the unlocking of the global data. This comes into the area of the Chief Intelligence Officer which needs to apply a set of tools, architecture and platforms which can gather, distribute or even analyze the information from the various sites in a real time environment. This also demands a approach to standardize the global IT environment. Reconfiguring your massive ERP system isn’t that attractive due to high expenses and long throughput times to realizes changes in information demand. At that already implies that all sites are real time connected to the ERP and have the same level of business maturity.

Top to Bottom.
The maturity of the business or the lack of it, becomes evident as the global organization did develop her global strategy, but such strategy never touches base. The implication of global data collection only really works if each Site has deployed such approach all the way down to the shopfloor. That sounds obvious, but in a global environment such wide top to bottom out role is time and expense consuming and requires a tremendous effort in management and dedication. However, the return can easily outweigh the cost.

That such information is required is shown in the research by the Aberdeen group who investigated what the main drivers are in Manufacturing. By 70% the respondent replied that ‘reduce cost of operation is the main driver, followed by ‘improve delivery to market’ by 38%. The management of global supply chains is ticked at 36%, which is surprisingly low in a world where global supply chains become increasingly more important.

Key elements.
Synchronizing metrics across the organization is an important strategy, especially when attempting to manage business processes that transcend traditional boundaries in a manufacturing organization” is considered as the main issue to resolve. Such metrics can be of use when engineers change products specifications or to evaluate the impact of a changed forecast or attainment to forecast. As global business are tied up, a change in any of the links, influences the entire chain.

Organizational Equipment Effectiveness to be exact. The major stronghold of O.E.E is it’s standard way of calculating the performance of Manufacturing. It is a hierarchy of metrics which evaluates and indicates how effectively a manufacturing operation is utilized. It evaluates Availability * Performance * Quality. When implemented within a Lean manufacturing program, which can be outrolled worldwide, it supplies a standard group of metrics against all production sites can be evaluated. The most ERP systems which include a complete manufacturing module, often supply such information.

Lean Manufacturing.
The real important issue here is the implementation on the workfloor. The metrics are as reliable as the input from the workfloor. For that reason, implementation of such metrics should be embedded in a broader scope such as a Lean Manufacturing program. Such program not only envisions the deployment of metrics but also the human factor in manufacturing processes. After all, OEE is the results of 3 main components of which Quality is a major driver for every company.

Steps forward.
Organizations, executives, need to focus in on the importance of global standards for their production sites and push forward to enable the technology and deployment of such standards

Manufacturing and IT need to improve their collaboration in order to realize a global platform which carries the required information stream.

Focus on quality and consistence. As said. The metric is as good as the input of data.

Lean has proven it’s success for many years at many companies. Lean however is not a operation issue but a strategic decision which requires support from the board and can only achieve it’s full potential which organization wide implemented.

• Improved visibility and performance in customer service and supply chain efficiency metrics
• Improved visibility and performance of quality, efficiency, and availability metrics in manufacturing
• Reduced overall operational costs
• Hit new product introduction targets
• Transformed operator experience
• Improved analytical capabilities and find root causes, corrective actions, and preventive actions faster
• Contextualized manufacturing data with other financial metrics for improved executive decision making

• Rationalized redundant and costly point based manufacturing systems
• Reduced corporate and “shadow” IT budgets in manufacturing
• Improved the usability and ROI of current ERP and BI implementations
• Improved ROI of investments made in corporate level collaboration tools
• Improved leveraging of the benefits of investments made in Industrial Ethernet on the shop floor

Operational Intelligence. March 2011, Matthew Littlefield, Mehul Shah, Aberdeen Research Group.