06 Dec Improve Visibility of Performance and See the Benefits
As consumer prices continue on what seems like a never-ending climb and with the dark clouds of double dip recession looming overhead, manufacturers are under increasing pressure to preserve their competitive stance, and prevent supermarkets from searching for alternative, cheaper suppliers.
So, how can manufacturers fight back?
The answer lies in identifying and eliminating all sources of waste. Maximising the potential of existing plant and using materials efficiently will help to counteract the effects of rising raw materials and energy costs, thereby driving a culture of continuous improvement.
Keeping Lean – Make the most of your assets
While it can be tempting to invest in new equipment, the potential of existing capital is often understated. Implementing an Overall Equipment Effectiveness (OEE) System will provide manufacturers with the tools to continually track where productivity is being lost, thereby presenting a measure of the effectiveness of manufacturing operations. OEE computes three elements, of which when multiplied together compounds the effect of failure and highlights improvement opportunities:
- Actual plant availability against planned availability
- Actual performance against design performance
- Actual good quality, saleable products against total products
It has been proven that increasing these factors will be 10 times more effective than the installation of new capacity. Supporting a lean culture by making losses visible will reap remarkable financial reward.
The 1% Effect and Your Business
Imagine a plant with an OEE score of 43%, indicating that over 50% of the time labour, energy and materials are wasted. What if we use OEE to analyse the losses, action small improvements and increase the OEE score by a single percentage point to 44%?
Let’s assume we have orders for 75,000 units per week at £5 each and the design speed of our plant is 1,000 units per hour, energy costs are £400 per hour, labour £100 per hour and materials £1 per unit. The plant must operate 3 shifts over 6 days to achieve the output, due to poor performance.
As the table shows, simply by bringing about a 1% improvement in OEE, we save £750 in materials, require 3 hours less production, save £292 in labour overtime and reduce energy costs by £1,168. Costs are thereby reduced by £2,210 per week, amounting to a saving of £114,909 per year. Consequently, the same output in less time can be achieved via OEE improvements.
Visibility, Accountability and Action
An accurate assessment of the current OEE will determine if additional hardware is required. Values above 65% suggest losses are minor stops which are difficult to capture manually, and so a simple touch screen system, linked to machine running signals and product counts will prove the best solution. The paperless system accurately captures data and provides feedback of critical information to the operator, including current performance and worst losses this shift.
An Andon board showing real-time progress delivers motivation via automatic alerts that ensure everyone is aware of urgent issues, thereby keeping each operator fully involved in the process.
10 basic rules of OEE:
- Set big targets: at least a 10% – 20% OEE increase in 3 months
- Make losses highly visible as they occur
- Calculate andshow the cost of those losses
- Make OEE & losses key drivers in daily review meetings
- Monitor OEE by shift; which are the best and worst?
- Monitor OEE by product; why is product x so hard to make?
- Who will deliver improvements for each loss?
- What can we do to achieve those improvements?
- When can we deliver those improvements?
- Constantly monitor progress
So, contact us today and seize this double-dip recession antidote for visible improvements:
Accurately measure your OEE → discover your loss structure → convert those losses to cash → cost justify improvements → monitor them to resolution.