Overall Equipment Effectiveness (OEE) — Problem solved

Posted on 10 Dec 2009 by The Manufacturer

At its simplest, OEE measures the availability, performance and quality of a machine or line. With a definition and use that has been subject to longstanding debate, Andy Spooner, business development director at Suiko, canvasses the insights of an OEE champion/user, OEE software provider, and a coach and facilitator.

OEE, (overall equipment effectiveness), is now seen as a core tool in the armoury for many across manufacturing industry when pursuing operational excellence. There continue to be misunderstandings as to why people should use OEE and what outcomes can and cannot be expected from the use of the tool. Like any tool it is important to consider:

• Why OEE?
• What are the practices that need to be put in place to maximise the benefit of using OEE?
• How do we embed OEE into the way of working?

Why OEE?
There remains little doubt that there is a compelling case for the adoption of OEE in combination with other core tools from the Continuous Improvement (CI) toolbox, providing it is taken in context. In its most basic form, the OEE metric provides a flag to improve and prompts the question ‘Why?’ — if applied wisely, it can be a valuable change-enabler to support the journey to operational excellence.

Concurs Bob King, group head of operational excellence, Premier Foods: “Within Premier Foods, OEE is used extensively. Not only does it drive performance improvement, but is used as a catalyst for change.” It is a proven route they have treaded for some time. “We implemented OEE within Hovis over 14 years ago,” says King. “At the time OEE was averaging 60%. After only 18 months deployment it increased to over 80%.” “This was achieved through the improved effectiveness of our people, processes and equipment. The benefits were significant, including reduced cost, increased customer service levels and avoidance of capacity increase capital spend, among others. Today we continue to use OEE. It supports our drive and passion to continuously improve. We constantly challenge the status quo, from downtime to managing bottle necks; from enhancing design speeds to reducing waste. It is a ‘management process’ rather than just a functional measure which has engendered a continuous improvement mentality. Culturally, moreover, it has been important for us to deploy OEE correctly — driving cross functional teamwork and to deliver supply chain excellence.” Alan France, operations director of Idhammar systems advocates pursuing OEE with a systems approach. “In our experience, software can act as the catalyst for significant performance improvement,” he says. “Most production managers are clear on the areas of major losses within their processes. However, getting to the root cause of these issues and doing something about them can be far more challenging.” He continues: “OEE systems take input data and translate it into meaningful information, helping to expose exactly what percentage of production time is truly productive — and providing drill down functionality to reveal the causes of lost productivity.

Users can identify and quantify the areas of greatest opportunity for improvement (or greatest loss), helping to guide and prioritise the continuous improvement effort.” Simon Perks, managing consultant at Suiko, expands on the extended tangible benefits of improving OEE performance. He says: “With an operational excellence approach that should encompass the sustainability agenda, the current mantra of ‘Reduce, Reuse and Re-cycle’ sits neatly with the outputs of embracing OEE fully. There are huge knock-on benefits from improvements to OEE.

By seeking to eliminate the non value adding time — downtime, slow running and waiting — and improving the quality, performance will have multiple benefits of addressing some of the ‘hidden’ waste and expose the true costs of poor performance on energy, water and disposal which are often underestimated.”

Maximising the benefits of using OEE
Putting the foundations in place for the use of OEE is important.

Emphasises France: “Clear, accurate and real-time reporting provides clear evidence of loss, but measuring and analysing OEE is only the first step in the proc¬ess — the key is to make action unavoidable.

Accountability for resolving issues needs to be established by setting clear objectives and providing steps and flags to plan, monitor, and encourage progress.” Says Perks: “If we believe that ‘what gets measured gets done’, it is important that those that can impact the measure understand how to do so, as well as being pitched at the right level. The key is to ensure that everybody involved understands the concept and benefits of OEE analysis and the way in which their actions can impact on OEE performance.

Once understood, it is critical that people understand what they are accountable for and, crucially, how they can influence and impact on OEE performance”.

King reinforces this view: “Often establishing the OEE metrics can be complex. The challenge, in essence, is to make it simple. I am not a great believer in black box data; more an advocate of energised engaged operators inputting the data, given that they know what is going on and must be involved to secure sustainable, continuous improvement. People need to be accountable, from the operator to the central team, for the delivery of Operational Excellence. Short interval control is important at the operator level on the plant, as are cross functional action teams seeking the 100 year fix for the loss analysis top 5 issues, trended over a longer period.”

Whether we talk top 3 or top 5, the challenge is to avoid concentrating simply on the current emergency, taking time and effort to analyse and make lasting changes. The real benefit of OEE is the quality of the actions that impact on the measure.

It requires the people using the system to have the capability to problem solve and get to the root cause of problems — the 100 year fix.

So we could expect the key role of an operator to include operating to standard, capturing accurate data, and spotting abnormalities as they occur. A team leader, on the other hand, will be expected to use the information generated from the OEE system to make decisions on how to direct resources, take containment action where there is underperformance, and get to the root cause of issues impacting on today’s performance. The value stream — area — manager will be guided by the trending data to establish priorities and help facilitate the problem solving process.

Embedding a robust performance review process is key to getting value from OEE information — from regular huddles around the SIC boards throughout the shift; end of shift reviews and effective handover; daily reviews to prioritise what is to be done to ensure the next 24 hours is better than the previous; to cross functional action team set up to address the pareto items.

The OEE information is the flag to investigate which should lead us to ‘go see’ where the issues are occurring, and arguably the most important aspect of understanding the problem. The challenge is to first understand by asking the right questions, thereafter listening to the experts who should own the problem. It requires a blame free environment where people are given the resource and skills to be able to ask take action for themselves, thus encouraging genuine involvement.

Making performance transparent at all levels will ensure that employees understand the cost of any lost opportunity — remembering that ‘seeing is believing’. There was a common view among the contributors that at its most basic level it might be a short interval control board displaying reds (below target) and greens (exceeded target), but as OEE performance increases the value of other techniques to make it visual is concurrently raised.

Says France: “As well as accelerating engineering response time to failure and improving the visibility of the maintenance team, OEE dashboards, andon displays and business alerts have a proven motivational effect on teamwork and support crossfunctional communication. Keeping everyone in the loop provides a sense of control and keeps all teams close to, and involved in, the task at hand — making every second of operation count.”

How do we embed OEE into the way of working?
Like any other tool implementation, OEE needs to be put into context. Indeed, it must be seen as a strategic priority that fits into the strategic framework and is integral to the operational excellence roadmap. The framework will help to direct focus, and should provide guidance to what needs to be done.

People need to have the right tools to deliver the expected results. These tools and techniques, when used appropriately, will help them see more clearly; measure; focus; problem solve; collaborate; and, as a result, be more effective. It is more about changing mindset than the tools (80:20), thus developing a culture which encourages enabling behaviours. Self-discipline and ownership are key attributes for everyone, for it is this that maintains the processes’ sustainability.

To mobilise the organisation and ensure that OEE is embedded into the day to day way of working requires a balanced approach to implementation. It will need to be driven, with management applying energy and attention to the critical activities to make it happen.