Sucking eggs – Overall Equipment Effectiveness

Posted on 4 Aug 2011 by The Manufacturer

Companies seeking to improve productivity and competitiveness commonly use Overall Equipment Effectiveness as a measure for machine efficiency. Many would say that exploiting this data is bread and butter to modern manufacturers. However, Ian Tindle, director at specialist strategic maintenance and management improvement company Sora Group, argues that many are failing to get the most out of the information available.

OEE as a strategic tool
It’s worth noting that Overall Equipment Effectiveness (OEE) is not the panacea to all problems. Simply having the measure in place isn’t enough. OEE works most effectively when used as a strategy – as part of an overall company improvement plan. Tindle explains that for ‘world class’ organisations it’s common practice to use a management process such as policy deployment (Hoshi Kanri in lean terms) to cascade relevant elements of OEE data down to individual department managers and staff. Doing this helps to emphasise that it is not the sole responsibility of production or maintenance to improve OEE; everyone has their part to play and furthermore, it shows everyone can benefit from understanding how to use OEE insight.

What does it mean to achieve ‘world class’ OEE?
For years now, world class OEE has been stated as >85%, and this becomes the target for many employers. But Tindle says it is dangerous for companies to fall into the trap of applying this rule religiously. He says: “It’s key to ensure that your OEE target is based around what you need, not just what you want – production and the customer have to come first.

“The harsh reality is that a number of organisations would be out of business with OEE as low as 85%. Benchmarking is vitally important, but only when used alongside a number of other strategies and when benchmarking partners are carefully selected.”

Who can use OEE data?
When used correctly, OEE can be used as an enabler to assist other departments outside production and maintenance. Tindle explains: “As OEE demonstrates production capacity and capability – this can be of benefit to sales departments in terms of helping guarantee production and delivery to help win new orders.” Furthermore, Tindle leaps on from this point to another key application for OEE intelligence: “Repeatable OEE is much more beneficial to the business than sporadic highs and lows. If we consider this example (see graph), both sets of OEE show an average of 95%, and the example to the left shows much higher OEE achievement in cases.” The problem, explains Tindle, is that production, planning and sales can’t rely on the highs and lows, hence the need for “smooth production”. This is why equipment and production reliability should be at the forefront of business improvement strategies.

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Alternative insight

Cimlogic is a provider OEE and MES software solutions. Mike Hodge, Manufacturing IT director at Cimlogic adds insight into how to properly use OEE data and gives some thoughts on what other information needs to be added to the mix.

An important consideration when promoting good OEE is what data to collect and how to put it in context.

If we record 100 quality rejects in one shift at a bottling plant due to missing labels, this is nothing more than one dimensional information or perhaps a benchmark to which we can compare one shift with the next. It does not tell us how to solve the quality issue of poor label application which is, in fact, the business interest in this scenario.

Using information in a limited context may trigger a bad business decision – i.e. carrying out unnecessary maintenance on the label applicator, thus missing the root cause of the problem. This could consume both time and expense.

If we capture additional facts, for example then we add dimensions to our data. These facts could include who the bottle supplier is, what the product being made is and whether the problem is in fact related to the label itself. After establishing these facts we can start to work on the root cause analysis.

Contextualising in this way might yield the answer – “we get significantly more labelling rejects when we use bottles from supplier S1” Armed with this data, we can involve procurement and they can work with the bottle supplier – preserving the ever-more finite resources of your continuous improvement team for activities where they can best add value. At the same time, it’s necessary to avoid unnecessary disruption to production for maintenance which won’t fix the fault forever.

Using the power of modern technology to store and process large quantities of contextualised data in real time is fully possible – it is just a question of using it with the correct vision of what you need to achieve, rather than just reporting numbers.

Do it yourself

Fine Industries is a pharmaceuticals and agrochemicals business based near Middlesborough.

In response to the pressures of recession and to bring strength and differentiation to the company in the wake of a management buyout in 2008, Fine Industries has poured resources into the development for a unique, in-house written business management system.

So effective has this system proved that Fine Industries has been moved to establish a new subsidiary business Fine Software Development, in order to take the IT solution to a wider market.

One of the strongest elements of Fine’s in-house system is its OEE capability. Operations director at Fine, Steve Catchpole has had broad experience with the pharmaceuticals industry.

He believes many of the software features represent industry firsts – particularly for companies like Fine who work with batch production. Catchpole says: “We have developed a system of intrinsically safe touch screens out on the plant so that operatives can at any given time check the status of various assets.” This information is rolled into analysis of plant availability and asset life as well as feeding into wider overall strategy. The clarity and digestibility of the data in Fine’s software offering has attracted considerable external attention says company MD, Keith Hanson. He also expresses that it has been the deal clincher in a number of crucial contracts. “Every customer, supplier, regulator, bank or anyone else who come to our site and sees this system wants it, “claims Hanson.

He continues: “What we have is truly IT for business, not business for IT like SAP and others. I strongly believe, and so does the rest of the team here, that this is a marketable product.

We ran our [Seal Sands] site with 450 people in 1999 and we run it now with 183.” OEE is just one of a hundred different modules within the Fine software offering but it interfaces with others ranging from electronic risk assessment to accident incident near miss reporting. What this means is that managers can access a dynamic range of data which puts every business area in context in just the way Mike Hodge advocates in his contribution to this article (see alternative insight box out).

Catchpole says that although there may be more powerful offerings in the technical aspect, for each module available on the market now, the ease with which all of Fine’s interact is something that he had never seen before. A system of emails and alerts will make sure that actions are delivered directly to those responsible and that if no action is taken the issue is escalated within the business. In this way everyone, from maintenance to procurement is held accountable for their actions and can be confident that problems are not going unnoticed.

All of the above is invaluable to operations, for the commercial side of the business however there is also direct benefit to be gained. Hanson says “On their iPhones, sales representatives can instantly show a customer what every reactor is doing: what batch it is on, what product it is making and what step in the process it is performing.” All of this data is presented in a relevant format for the sales representative directly from the OEE module.

Fine Software Development hope to take its business management system to market within the next 12 months.