Organising chaos

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Magazine Article, Source : The Manufacturer
Zone : Operations and maintenance
Published : September 2005

Brian Davis finds that the overall equipment effectiveness measure can turn instinctive reactions into productive actions

Doing OEE measures helped create order out of chaos, says Phil Hirst, lean manufacturing engineer for aircraft component-maker Bulwell Precision Engineers.

Overall equipment effectiveness (OEE) is a key measure for judging lean performance, but Hirst admits measuring machine performance was a bit of a mystery. “Every definition of OEE seemed slightly different and the books were confusing, then the local MAS gave me clarity in five minutes.”

Hirst pulled together a TPM team for an OEE exercise on a milling machine that suffered regular breakdowns. “We identified a major tooling issue which seriously affected set-up time. Our gut reactions said this would be costly to remedy, as we didn’t have enough tools to pre-set the next job and tool-holders are expensive.”

The team decided to calculate the impact of just a one per cent rise in OEE on direct sales. “We discovered that new tooling could raise OEE by two to three per cent with significant impact on the bottom line, and had no trouble convincing the board of need for investment.” Regular OEE snapshots are now scheduled throughout the plant to ensure ‘best of best’ machine availability and performance for an achievable quality target of 98 per cent. “OEE will give us a baseline for improvements across the business on our lean journey,” says Hirst.

Manufacturers in every sector from food processing to auto-components reckon OEE is a valuable measure for identifying waste, reasons for faults, shift and production trends (see box). The measure is essential for continuous improvement in the move towards world class best practice. But like any measure, it depends on reliable data otherwise companies face ‘garbage-in garbage-out’.

MCP consultant Peter Gagg suggests: “Many companies use OEE to compare factories then manipulate the figures accordingly. OEE is not simply a management tool to benchmark plant performance against competitors but a measure of continuous improvement plant-wide.”

Drinks manufacturer Britvic attempted to put TPM across the board a couple of years ago as part of a lean programme, but only began measuring OEE a few months ago. “We found inherent problems educating people in techniques like 5S to remove waste,” says TPM facilitator Dave Monk. Following major organisational changes, new shift patterns and introduction of new pasteurisers and packaging plant recently, Productivity Europe was invited to support Britvic’s lean and OEE measurement initiative.

“We’d done some data collection previously but it tended to be very skewed. People relied on gut feel, which though mostly correct was sometimes focused in the wrong direction,” says Monk. A canning line was chosen as a pilot for OEE assessment. Data was collected manually and punched into an Excel spread sheet. OEE measurement enabled the team to drill down to specific problems, for example tray feeding to the packaging machine and film wrapping.

By resolving these and other issues Britvic raised OEE from 55 per cent to 78 per cent. “OEE enables us to see where the biggest problems lie and attack them in a structured way, considering how specific areas are performing against the bigger picture. Sometimes, simple things like having a good cleaning regime in place have the biggest impact,” remarks Monk.

Though OEE data on performance, availability and quality is often collected manually, good OEE calculation and analysis software is available for in-depth trend analysis by stakeholders.

However, maintenance consultant Richard Jones emphasises the importance of learning to collect OEE data manually. “Do you learn to fly on autopilot? If people aren't willing to gather OEE data manually, they won’t understand the process.”

Tyneside-based oil seal maker Freudenberg is a case in point for spreading the OEE measurement through to all levels. “We began using OEE as a management tool, based on end of shift reports,” says Colin MacPherson Six Sigma and lean master black belt. “Often the data was a few days old and was insufficient to monitor downtime effectively.” Subsequently, Freudenberg introduced team leaders to a lean performance management system for monitoring production on an hourly basis.

A pilot study was made of a mini-cell in one of the North Shields plants, where OEE levels were consistently missed due to a machine problem, tooling or shift. “Now we use accurate, live data so we can focus attention where needed,” says MacPherson. “Good data is the only way by which you can drive your business forward, and OEE is one of the key pieces of data.” Consequently OEE has climbed between five and 10 per cent.

Geest supplies chilled, own brand ready-made meals for leading supermarket chains. The Sutton Bridge plant is highly automated and complex, and acquired MVI’s eventsengine for real-time performance management. “Our main focus has been to reduce waste through improved OEE and Net Machine Efficiency (NME), while increasing the productivity of labour,” says general manager Brian McGonagle.

Coming from a Six Sigma culture at Motorola, McGonagle found only basic manual measurements at Geest, so he couldn’t drill down effectively. “There was no performance tracking, accountability or ownership from day to day.” McGonagle says the value of MVI software is its ability to break performance down into line, shift and product, measuring maximum capable run-rate, availability and quality for ‘right first time’.

The company had a big issue around rejects. Using the MVI real-time management system the operator can report on the state of the line at any time. Now Geest can fine-tune business processes for accountable improvement in on-time delivery and reduction in overtime levels. The ‘cube analyser’ facility enables production managers to analyse performance trends. “The MVI system gives us a clear picture of the factory and helps focus manufacturing plans,” says McGonagle.

MCP consultant Richard Jones maintains OEE should be directed at areas of biggest loss, using the pareto (80:20) rule and meaningful targets set for the process. For example, on fast-moving lines, the bottleneck often lies in packaging. One of the problems in FMCG plants is maintaining consistency and sustainability on production lines. OEE can fluctuate by 10 percent due to variations from shift to shift in terms of quality, downtime or slow changeover. The prime aim is to get consistency in terms of availability, performance and quality, then to raise OEE to a world class level.

“We started using a manual approach to measuring OEE as part of our TPM programme but it wasn’t very effective,” says Mel Mula, plant manager of Eaton Hydraulics, which produces industrial valves and pumps. Subsequently the Havant-based plant began using OEE impact software from Gemba Solutions to provide manufacturing efficiency reports.

“Collecting the data is now relatively simple and we analyse all equipment against key criteria in terms of criticality to the business,” says Mula. Lead time has been reduced, machine reliability improved, machine utilisation and throughput increased and consequently the competitiveness of the company increased. “We are looking for 20 per cent improvement in OEE on the road to becoming a world class performing company. A fundamental part of that journey is having reliable equipment that is properly maintained and used efficiently.”

“In the past we only measured efficiency and productivity,” says general manager Andrew Morley of Runcorn-based superglue maker Hyloc. With support from the Manufacturing Institute for lean improvement, Hyloc now measures quality, equipment availability, maintenance and housekeeping. “Rather than just measure output, we now measure the quality of the output and efficiency factors, ie what we could have done compared with what we actually did,” he says.

OEE measurement is already starting to bear fruits. Hyloc reduced stock at all stages from inventory to finished goods, with a big improvement in cashflow. “Using OEE we determined that main bottlenecks were around people issues, concerning availability, ability to do the job and resources. As a result we’ve reassessed staff organisation and numbers and restructured shifts,” says Morley. “We’re get much more quality productivity per unit, with better housekeeping. Operators feel far more involved in the maintenance process. We get much more feedback and catch problems earlier.”

“Measurement of OEE all comes down to a matter of trust,” says Alan Harrison, group lean champion at Weir Pumps. Key machines are selected for OEE measurement at the Glasgow plant, based on their importance to flow, bottlenecks and usage rate. “OEE has impacted on how we load jobs, training, scheduling, changeovers, and tooling, and helps teamwork. Our goal is to measure the number of improvement actions realised, with continuous improvement on a weekly basis.” In one year OEE improved 20 per cent across the lines.

Hopefully, OEE helps convert gut reactions into good accountable actions.

Overall Equipment effectiveness (OEE)

OEE is a measure of manufacturing efficiency that takes into account a plant’s capacity, performance and quality, giving a KPI in percentage terms.

OEE = performance rate x availability x quality

Performance rate is a measure of the standard cycle time multiplied by the number of components produced, divided by operating time. Availability covers planned and unplanned downtime. Quality is calculated by the number of components produced less defects. Information is collected over a three to 12-month period and includes individual fault reasons, multiple reject counts, shift information, and figures logged for product performance. Trend analysis helps identify reject reasons, bottlenecks, meantime between failures, variance in shift and product performance and set-up time modifications.

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