Until you achieve maximum production efficiency, continuous improvement should be an integral part of your business. Seems like an obvious statement, but this can be tough to do when you may not know what your maximum production efficiency is (we will give you a hint, it’s likely not 100 percent) or how to measure change.
So, how does one know where to start? And, more importantly, how do you know if you’ve actually achieved anything? Like any improvement project, you’re going to need some tools to help you set a baseline and take measurements throughout. In this case, the most important tool you can implement is an overall equipment effectiveness (OEE) measurement system.
An OEE system is a software-based manufacturing execution system (MES) tool you can use to measure how efficient you are being with a process. To calculate OEE, you need to measure three data points—equipment uptime (availability), equipment efficiency while it is up and running (performance), and the amount of waste produced (quality).
Thanks to rapidly evolving technology, OEE measurement tools today are relatively inexpensive. At the very least, the costs can certainly be reasonably justified by the potential cost reductions achieved through implementing a continuous improvement program. Let’s analyze this using a real-world OEE experiment conducted by Vertech.
Getting Real Results
To show the benefits OEE can offer, Vertech worked with four craft breweries who volunteered to have an OEE system installed on a single bottling line in their facilities. The test was run for approximately four weeks in each plant, and all three OEE components – availability, performance, and quality – were monitored. We worked with each brewery’s CFO to associate costs with each of the contributing factors, and after crunching the numbers, here are the results:
| Company | Best Case Savings* | Conservative Savings* |
| Max Found | $382,983.00 | $207,531.00 |
| Min Found | $87,855.00 | $51,150.00 |
| Average | $185,328.00 | $99,210.00 |
*Savings quoted above are annualized savings based on the four-week test run.
While it was clear that OEE benefitted each company, here are our top four take-aways from this trial:
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The average annual waste per line was almost $100,000! Even the most efficient line we tested was wasting more than $50,000.00 per year. And these are the conservative numbers.
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In every case, the results were surprising to the owners. They had no idea what their actual efficiency losses were.
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One owner thought they were running at close to peak performance, but the study showed they were really only at 80 percent.
How You Can Get Started with OEE
If you would like to begin a discussion about what an OEE measurement tool can do you for your organization, please connect with us below. We would be happy to walk you through the results outlined above in more detail, and we can answer any questions about how the system works and how it might be applied in your facility. Just mention OEE in the e-mail.
To learn more about OEE and all the best MES tools for increasing business performance, download our white paper 9 MES Tools Every Plant Manager Needs to Improve Business Performance.
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