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What would happen if your operating efficiency improved by just one percent? How much profit would result? How much more competitive advantage would your organization have?

That’s what overall equipment effectiveness (OEE) is all about. It’s learning where and how to improve operations so a company’s profits will increase, as well as gain a competitive edge in the market.

OEE is a hierarchy of metrics used to monitor the effectiveness of manufacturing facilities. Software is typically used to simplify the ongoing process of collecting and analyzing the results. If you think about it, running a production facility without tracking efficiencies is a lot like investing in a 401K without tracking your portfolio value.

It takes an investment to make OEE a success. Success is seeing a return on that investment. Keep in mind, the investment is more than just the cost to purchase the software, computers, plant floor integration, etc. It will take an investment of time to train employees, input data, analyze data, etc. It also requires a commitment from management, production, IT and maintenance departments.

If the investment is offset by an increase in manufacturing efficiencies resulting in increased profit, better competitive advantage or a reduction in capital expenditures, then your OEE implementation can be considered a success.

If OEE isn’t done correctly, you may be setting your OEE efforts up for failure. What follows are some of the best practices to make your OEE implementation a success.

Understand and Use OEE Calculations
Efficiency is not simply the ratio of machine run time to scheduled time. Look at the situation of your manufacturing line or process running at half speed with zero downtime. This is truly only 50% efficient. Or, what if 10% of the product being produced does not meet the minimum quality and must be reworked. This equates to 90% efficient which does not even take in account the effort to rework or loss of raw material.

OEE takes into account three isolated factors of availability, performance and quality. Each can stand on their own, but combined they provide an accurate picture of a production line’s effectiveness.

OEE availability represents the uptime, excluding scheduled downtime periods such as breaks. OEE performance is represented by the production rate while the production line is running compared to the designed production rate. OEE quality represents the good units produced compared to the total units that started being produced on the production line.

Track Downtime
Track downtime to see where to focus efforts to improve OEE availability. OEE availability only provides a method to monitor the uptime of your production facility. Think of it this way, if your production line typically runs at 69% OEE availability, what actions do you take to increase it? Tracking downtime is the key to discovering what to fix or change in order to raise the uptime of your equipment.

Include Scheduling
Incorporating scheduling provides the additional benefit of tracking total effective equipment performance (TEEP), or asset utilization. Scheduling can also be used to help improve coordination between departments. If raw materials are not delivered in time to a production line so that it can continue to keep running, it directly affects the efficiency.

Low efficiencies result from ineffective procedures or lack of communications between departments. This is where scheduling helps by providing current schedule information and change notification to all associated departments.

Include Production Staff in the Design
One area that can be a challenge is encouraging production staff to take the extra time to use the system. It helps to include them when designing the screens, since they will be the key people using the screens. This gives them a chance to include features that will help them on a daily basis. They will also want to see the OEE implementation succeed because they had a part in the design.

Close the Loop – It’s a Circular Process
Once you obtain your OEE percentage efficiencies, the next step is obvious, but is often neglected. Take action! Look at the data and make decisions about what to change. Close the loop between the OEE and downtime data and fully resolve machine, and possibly other, problems reducing efficiency. This sends a message to the production staff that their effort to enter information is being used and making their a positive impact on their job.

Keep It Simple
In order to make it easier to “close the loop”, keep the system simple. Don’t overburden staff with too much data to analyze. Only provide the data that employees can take action on.

Initially, it is best to keep it simple and have a smaller set of downtime reasons and determine which cells are the top sources of downtime. Then if needed, add more downtime reasons to only those machines that more specific data is needed to zero in on the inefficiencies.

The more involvement you have from multiple levels and departments, the better your return on investment will be, regardless of how much you paid for the software to get the OEE data collected.

On February 24, Inductive Automation will be conducting a webinar on Best Practices for OEE. Tom Hechtman will be speaking about what methods and tools are available for evaluating and improving your organization's effectiveness. Register now.

About the author: Tom Hechtman has been implementing manufacturing execution system (MES) projects for more than 20 years. He is the lead developer for the OEE Downtime Module, which is part of Ignition by Inductive Automation’s MES software suite.