Using OEE to measure and improve production efficiency.

To increase productivity and reduce costs it is essential to have an effective system of measurement, control and improvement of production efficiency.

The current competitive environment is characterized by a progressive reduction in margins due to increasing globalization and less willingness by customers to spend.

This requires companies to reduce manufacturing costs to maintain or improve their competitiveness. An essential key to achieving this is to maximize the efficiency of the productive resources.

Being more efficient means, in effect, increasing productivity with the same resources. This means that you can get the same productivity with fewer resources, or get more productivity from existing resources.

Often we tend to think that the best way to increase production efficiency is to renew or upgrade assets, requiring substantial capital investments. But experience teaches that, in the absence of an adequate control system for improving efficiency, few production processes achieve more than 50-60% of its potential.

For a company that wants to be competitive it is therefore a priority to develop an effective system for monitoring and improving efficiency, in particular on “critical” resources. This allows the company to:

  • measure production efficiency in an objective manner;
  • spontaneously spread indicators that induce an increase in productivity;
  • identify and eliminate the sources of inefficiency.

OEE (Overall Equipment Effectiveness) is universally recognized as the most effective method. Originally devised for continuous flow production, the technique can also be used successfully for work cells, departments or even service centers that perform potentially repetitious and standardized tasks.

OEE provides some basic steps:

  • definition/validation of standard (times and methods)
  • implementation of the system of registration of inefficiencies
  • development of the tool for the calculation of the efficiency and the ABC analysis of the inefficiencies
  • training the staff on the objectives of the activity and the significance of the indicators
  • evaluation of the current level of efficiency
  • identification of the main sources of inefficiency
  • eliminating inefficiencies through targeted improvement activities
  • quantification of the improvement achieved and feedback

The technique is usually implemented in a pilot area (department, production line or office) and then progressively extended to other areas. This allows the company to set up a sustainable path and fine tune OEE in specific context.

Typically, an OEE project enables production efficiency to be raised by 30-40% in a few months, depending on the starting situation, bringing it to its maximum potential. Inefficiencies are often identified primarily as organizational in nature, and therefore their resolution requires an investment that is very low or even zero.

Consequently, the implementation of OEE is usually characterized by a very rapid return on investment, in addition to ensuring a significant efficiency gain that can increase over time if used as part of a program of continuous improvement.