Planned strategically and implemented tactically, Overall Equipment Effectiveness (OEE) can improve stability and overall equipment performance, unlock capacity and drive behaviors for sustainable improvement. It’s a very simple metric that can deliver big rewards, but drawing general conclusions based on OEE metrics could lead you down the wrong path.
OEE performance varies across (and within) industries and processes, and is extremely sensitive to individual factors and/or regulations, so it should always be treated carefully, addressed on a case-by-case basis and supported with site-specific data. We’ve helped some of the world’s largest food and beverage manufacturers effectively leverage OEE to improve productivity for long-term, sustainable gains. In working with these companies, we’ve seen four common pitfalls that get in the way of OEE success.
- “Plant-wide” OEE Calculations. The larger the problem, the more difficult it is to correct. Use OEE to identify and prioritize top sources of loss and resolve problems one at a time. By addressing one issue at a time, you can make gradual, but sustainable, progress and prevent the analysis paralysis associated with plant-wide OEE calculations, which yield problems that are too big to tackle quickly and effectively. Calculate OEE at each choke point to truly measure the problem, as well as success in overcoming the problem.
- Skewed Data. It should go without saying, but poor data quality is a common problem. It’s imperative the data used to make decisions is high quality. Skewed, incorrect data can lead to addressing the wrong problems. If your loss accounting system isn’t in good working order, it’s better to implement manual processes. The data doesn’t have to be sophisticated, but does need to be correct. Accurate data will point to the biggest sources of loss, so you can tackle those first for maximum benefit.
- Failing to Involve all Stakeholders. Whether consultants, executives or operators, often individuals or small groups set out to address OEE and choke points on their own. However, operators, who work on the plant floor day in and out, are the most qualified to provide insight, ideas and even solutions. Engage them in the process for improved adoption and long-term, but rapid, success.
- Overcomplicating OEE. Mounds of data and reports are great for analysis, but clear, digestible material will get everyone on board and moving in the same direction. Using simple glide paths or blueprints will make it easier to manage and communicate activities and results.
Proven methods for an OEE implementation that avoids these pitfalls are based on three anchor points:
Choke Modeling. Because OEE is a true measure of throughput, it’s critical to understand the choke point of the operation. Choke points are known by many aliases: Herbie, jug, constraint, bottleneck, line governing operation, limiting resource and bad actor. Regardless of which name you use, it’s an obstacle or limitation that prevents or slows progression from one phase of the manufacturing process to another. Contrary to popular belief, a choke point is not always limited to the slowest part of the operation. A choke point can be any process in the operation that limits throughput via any means, not just speed.
Often, companies identify the constraint and then apply the Kaizen strategy whereby cross-functional teams work together proactively to achieve improvements in the manufacturing process. However, this step is often premature because you first need to understand the causal factors behind the choke point and then use data to prioritize choke points according to the volume of loss they are causing.
An OEE Management System (OMS). A management system provides a framework for focusing on the choke point at all times, while communicating to the organization and tracking/measurement of tactical activities. Begin by focusing on elements that are closest to the shop floor and observed or acted upon at the shortest intervals. Despite a narrowed focus on improvement in one area or process, leadership must be mindful of the overall effect of process changes in performance across departments and ensure that the support functions are robust and effective in enabling the production process.
Short-interval controls at the choke point and hourly/daily/shiftly performance meetings are examples. This “lower” portion of the OMS would also include classical Kaizen or workshop planning and execution. As the team is streamlining (or installing, if non-existent) these elements of the management system, leaders are doing likewise with forecasting and planning elements. Once matured, this ensures that the team is always aligned with the organization’s strategy.
Results Planning. This provides a link and checkpoint from initial analysis to the delivery of OEE improvements. Executed properly, results planning clearly defines the project delivery roadmap and creates a simple vehicle for all project team members, participants and others in the organization to understand the initiatives that must be accomplished and in which order or timeframe. Results planning also provides this path using multiple sources and boiling them down to the critical project activities, assumptions and risks that must be understood, overcome and completed to have the maximum impact.
It’s essential that the draft version of your results plan is reviewed and mutually approved by all stakeholders. In addition to providing direction and visibility on “how” the team will achieve results, the mutual approval phase of results planning ensures alignment of stakeholders: from those on the plant floor to external third parties and executives.
An effective results plan should include these key elements:
• AVS/analysis: interviews, data, observations, studies
• Risk assessment / prioritization
• Quick wins (choke points / performance focused)
• Preliminary financials
• Focused glide paths/blueprint
With these methods, you can avoid OEE pitfalls and quickly gain sustainable improvements in operations, productivity and performance.
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