Until you achieve maximum production efficiency, continuous improvement should be an integral part of your business. With manufacturing execution system (MES) tools, you can bring efficiency to your organization through streamlined data flow, which will increase your production capacity without the capital expense. And, rather than embarking on continuous improvement initiatives that may or may not benefit your organization, you can use MES tools to show where your efforts will be best spent. This is the first post in a nine-part series that examines what we believe are the most essential MES tools to improve business performance.
Overall Equipment Effectiveness (OEE)
OEE is roughly a measure of how efficient you are being with your 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).
OEE is calculated by multiplying availability, performance, and quality.
To achieve a 100 percent OEE score, you need to manufacture only good parts as fast as your machine can run with no down time. But, in most industries, a perfect score is not attainable, or even desirable due to the steep decline in ROI as you near 100 percent. Among the industries we serve, 40 to 60 percent is considered typical and 85 percent is deemed as world-class for most industries.
No matter what your OEE goal may be, you need to make sure you are hitting it. When machines are producing below capacity, not only are you manufacturing less product, which means you don’t have as much available to sell, but you likely have operators standing around waiting to work.
Let’s take an example from a widget factory of how tracking OEE works. If you plan to produce one widget per minute, or 60 widgets per hour, but you have 30 minutes of downtime during that hour, you’d expect to produce 30 widgets instead, right? Well, if your machine is about to breakdown, it probably isn’t running at 100 percent efficiency, let’s say it’s running at 90 percent efficiency, and now you produce 24 widgets instead of 30 in the 30 minutes of uptime. Also, two of the widgets produced don’t function properly. Now, you’re down to 22 widgets produced in an hour, or an OEE score of 41 percent. In this instance, by tracking OEE, not only would you have a better handle on your production yield, but you may have seen indications that a breakdown was approaching.
In our next post, we will look at how downtime tracking can help you identify the machine(s) that are preventing your production line from operating efficiently.
To examine all the best MES tools for increasing business performance, download our white paper 9 MES Tools Every Plant Manager Needs to Improve Business Performance.