Ready to get serious about efficiency based cost reduction efforts? How will you know where to start? More importantly, how will you know you’ve actually achieved anything?
Like any improvement project, you’re going to need some tools, and the most important tool you can acquire in this case is an Overall Equipment Effectiveness (OEE) measurement system.
As you may have already discovered, however, it’s pretty easy to spend more on an OEE measurement system than you can reasonably expect to achieve in efficiency gains. That leaves you with the options of swinging in the dark and hoping you notice a change on your income statement, or just living with the status quo. There is a better way!
Thanks to rapidly evolving technology, plant efficiency measurement tools are possible today for relatively little money, and certainly for sums that can be reasonably justified by the potential cost reductions achieved through implementing a continuous improvement program.
In a recent study by Vertech, four companies volunteered to have an OEE system installed on a single manufacturing line in their facility. The test was run for approximately four weeks in each facility. All of the OEE components were monitored including Availability, Performance, and Quality. We worked with the CFO of each organization to associate costs with each of the contributing factors, and after crunching the numbers, here are the results:
|Company||Best Case Savings*||Conservative Savings*|
*Savings quoted above are annualized savings based on the four week test run.
- 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 those are the conservative numbers.
- In every case, the results were surprising to the owners. They had no idea what their actual efficiency losses were.
- One owner thought that they were running close to peak performance, but the study showed only 80%.
- Each plant was in the same industry, and it is a fairly low price-point product. If you’re line produces more valuable products or produces at a higher rate, these numbers go up quickly.
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.
For a quick overview of our White Box test platform, visit our Craft Brewing page. While this particular study was in the craft brewing industry, this software can be applied to any manufacturing or processing line, even if it isn’t automated.
We look forward to talking with you!