Overall equipment effectiveness

Overall equipment effectiveness (OEE) is an important tool in the food processing industry. In fact, in any capital-intensive business OEE improvement is a critical methodology to drive improved efficiency, higher quality and reduced cost.

OEE tracks the value-added productivity of equipment. It is a measure of the number of good (shippable) units produced compared to the quantity which should be produced based on the scheduled time and the specified equipment rate. On average, plants waste up to 40% of their capacity through stops, speed losses, interruptions and defects. Despite investments in manufacturing planning and control systems, most plants have a poor overall performance rate. Plant managers often don’t know the true performance of the factory and may be unsure of how to improve it.

Implementing OEE measurement tools and techniques provides a much clearer understanding of where improvements can be made. There are many ways to improve OEE performance. Some of these improvements may require substantial financial investments, while others can be achieved at minimal cost.

With accurate OEE measurement it is possible to pick the projects with the quickest returns. Accurate OEE measurement makes it possible to identify the correct approach and select the appropriate improvement tools and techniques.

Measuring downtime is not enough

While many companies focus on downtime losses as a measure of equipment performance, an OEE approach will quickly make it apparent that there are also other forms of losses on most manufacturing lines. Downtime measurement alone ignores the losses due to reduced speed and minor stoppages, as well as the sensitivities of the equipment to different product types. Some products can be more difficult to make and have more breakdowns and quality problems. OEE captures all the losses and ensures that no performance improvement opportunities are ignored.

15 steps to a successful OEE program

1. Identify the project team.
2. Communicate the program objectives.
3. Establish the current OEE level.
4. Validate existing data.
5. Carry out activity analyses and identify bottlenecks.
6. Evaluate work methods and staffing.
7. Analyse maintenance planning and execution.
8. Compare existing performance to industry ‘best practices’.
9. Identify and quantify the OEE opportunities.
10. Define the target OEE performance.
11. Identify the actions and resources.
12. Develop an implementation plan with specific milestones.
13. Communicate the plan and set up project boards.
14. Set up a regular measurement and review process.
15. Identify the mechanisms which will sustain the improvements.

Potential benefits

Reduced downtime costs

When a critical machine is inoperable, it brings downstream operations to a standstill. This can negatively affect delivery commitments to the customer, which in turn impacts cash flow and revenue.

Reduced repair costs

OEE enables predictive maintenance that can dramatically reduce repair costs. As the historical database of downtime reasons grows, the maintenance department can discern trends to predict an impending failure. Also, by interfacing the OEE system to a computerised maintenance management system, the maintenance department can take proactive steps to do predictive maintenance.

Increased labour efficiencies

Due to current economic conditions, most manufacturing companies have downsized considerably. Consequently, manufacturers are eager to optimise the productivity of their existing workforce. An OEE system helps, because it not only captures downtime reasons, but also shows capacity loss data and cycle times. With this information, management can better judge the most appropriate allocation of staff to optimise the line balance and the utilisation of resources.

Reduced quality costs

An OEE system captures the quantity of total parts produced, the number of scraps and defects and the reason for defects. Because this information is captured at a specific machine or line level, this capability actually captures quality in the context of the part produced. By tracking context-rich quality data using OEE, production managers can identify root causes and eliminate further costs associated with rework and scrap. Improving the focus on quality at every stage of production also reduces warranty costs.

Increased personnel productivity

An OEE system enables the shop floor to go paperless.

Typically, facility operators and supervisors spend an enormous amount of clerical time recording, analysing and reporting downtime reasons and root causes on paper, then further explaining these reports to management.

An OEE system captures and reports downtime and efficiency automatically. Everyone from the plant floor to the boardroom is more informed, more often, more easily.

Increased production capability

The net effect of reduced machine downtime, higher productivity of operators and reduced defects is the ability to achieve higher production levels with the same amount of resources.

Food and beverage manufacturing example

At a food manufacturing facility, an OEE system helped supervisors to detect that operators of a particular production line were deliberately and prematurely slowing down the bottleneck machine. This was done to keep the machine from automatically slowing when a fault was triggered by surge bins being filled whenever downstream machines were delayed.

If proper settings had been maintained, the bottleneck machine would have operated at rated speed until the surge bin buffer zones filled with stock, which the downstream machines would eventually consume, thereby catching up with the line-limiting machine as designed. Tampering with the machine speed changed this process. With the OEE system, management was able to detect the tampered settings, view the production conditions and understand what was happening to the process.

OEE system cost estimation

Since an OEE system is scalable, its cost can be scaled to yield an appealing ROI. For example, manufacturers can start by implementing a pilot system, encompassing a checkweigher or a manufacturing cell, wherever they think an opportunity for improvement exists. Depending on the size of the pilot, manufacturers can choose to buy off-the-shelf OEE products and implement a system quickly through internal engineering resources or hire the services of outside integrators.

The following variables influence the estimated cost of an OEE system:

• Number of machines to interface
• Number of manual data entry terminals and mechanism for data entry
• Automatic vs manual data collection
• Integration with other plant data applications (eg, ERP, CMMS)

OEE software tools

A number of software tools exist to capture manufacturing performance data and display OEE performance graphically. Selection of an appropriate OEE software tool is critical to the success of any OEE initiative. A mistake to be avoided is the belief that this tool will drive OEE improvement - remember that any OEE software application is just a tool, and if not harnessed correctly will merely measure OEE, not improve it.

Development of functional specifications and detailed application requirements are vital elements in the success of selecting an appropriate package to support an OEE improvement program.

OEE Systems