What nobody tells you about OEE – the hidden truth!
Moving from tribal knowledge to system knowledge to keep machines running at their best
Overall Equipment Efficiency (OEE) has been a staple KPI for production managers for almost fifty years, but surprisingly few solutions in use today deliver an objective truth of machine performance. The stakes are high for manufacturers. To thrive in a competitive market, you need to get the most out of your machines. OEE can tell you which machines, parts, shifts are performing the best and which aren’t. But only when done right. Without the correct information, it is like driving a car without a speedometer.
Here we examine some of the reasons why building an OEE tracking system that delivers value is harder than it sounds, and offer solutions that measure to manage so manufacturers can increase machine efficiency and optimize operations.
First, many manufacturers compute their OEE numbers by starting with data from “paper and pencil” record-keeping, even in today’s digital age. This method works by having shop floor operators make estimates for machine time and provide associated reasons for stops. These hand reports are usually input to excel and made into management-oriented KPI reports. Managers must rely on KPI numbers based on these hand-written notes.
Manual data collection and analysis just does not make sense when there are far more reliable, cost-effective and proven Industrial IoT technologies – such as ei3, ready to takeover. Changing from a manual record to automatic downtime data collection is a low-hanging fruit.
Factoring the ROI
Admittedly, implementing a digital system does not come for free and requires some focused effort, but the pay-off is almost immediate: at ei3, we typically measure a 5-10% improvement in OEE in the first month. This improvement translates immediately to a strong positive Return on Investment. This is because of the dramatic positive impact an improvement in OEE makes.
Consider this example: If your plant runs 24/7/365, with a $150/hour machine burden rate, a 10% improvement is worth over $125,000 in top-line revenue per year on a single machine alone. This might mean that you don’t need a new machine to increase capacity; you just need to get more out of the ones you already have. Hundreds of machine owners have used ei3 to find the hidden machines on their production floor after only a few weeks.
Over the last two decades, ei3 has connected more than 83,000 machines and devices at over 4000 global manufacturing sites to track, analyze and empower machine owners with real-time insights into their processes and productivity. ei3’s applications provide manufacturers with insight about when the machine is running to schedule – and when not.
Manufacturers who use ei3’s robust downtime application are provided with detailed Pareto analysis to find and separate the important few from the trivial many by tracking each event and reason for why the machine was down. Manufacturers are provided with insights about how fast the machine should be going and can even discern a good part from a bad one to provide automatic and real-time quality updates. ei3 collects 300 million data points every day to analyze and deliver simple “to the point” reports that show manufacturers how well the shop floor is doing.
In the manufacturing world there are still many doubters who struggle to see the benefits of an automatic OEE reporting solution. They may ask, “is it really possible to make more money from my plant?” Yes. Plant managers need OEE information to hold teams accountable and drive ownership of improvement projects. The manufacturing company owns the machine, but the shop floor team is responsible for the results.
KPI numbers are needed – unless you can afford to spend all day at the shop floor looking at things yourself! Important questions get answered, like was the machine down three hours on the third shift or six hours. Too often answers provided by the shop floor team are affected by their personal bias. As a manager, you want to know what the hard data says? If you are in the business of selling machine time to your customers, you know that that downtime is not just a number but a significant cost.
A yardstick to measure improvement
ei3 cloud technology provides plant managers with OEE numbers that are based on facts, wrapped up in easy-to-read reports that focuses on the key aspects and help everyone take action by providing information such as:
- historical and real-time performance trends
- shift which is the most productive
- your top downtime reasons
- comparison of your OEE between any given times, and more
The OEE numbers provide everyone on the shop floor with the scorecard they need to achieve their best. Because the cloud solution is automatic and based on hard data — the scorecards can readily be used to align the team’s expectations for success. Everyone becomes involved in actions to keep the machines running and making products that can be shipped to the customer on time. And the only way this can be accomplished is by moving from a reliance on tribal knowledge to system knowledge to identify the loopholes and fix them!
If an automated OEE tracking technology sounds like something you want to try, reach out to an ei3 Success Engineer for a demo and see how you can connect, visualize and improve your operational efficiency.