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OEE Metrics Reveal Increased Return on Investment


At the time being, how is your production line doing? Is it running efficiently? Any downtime? Can you identify the bottlenecks? Manufacturing lines are complex operations. The smallest manufacturers can struggle in knowing what is going on – imagine multiple production lines and multiple sites. With Overall Equipment Effectiveness (OEE), one obtains a real-time view from a single screen of production lines’ efficiency and the entire manufacturing operation.

OEE is a metric based on Availability, Performance and Quality and is used to help manufacturing companies improve their performance. Small improvements in OEE scores can produce substantial improvements in efficiency and profitability and deliver good Return on Investment (ROI) for the process monitoring and improvement effort.

OEE is a proven manufacturing management methodology that determines the profit dollar value of decisions while connecting plant floor to income statement. In real-time, the OEE can quantify if the company is making or losing money on a per-part and per-machine basis accurately. ROI and Real-time OEE reporting will help identify ways to save both time and money.

Performance identifiers include minor stops, bottlenecks, and speed loss, areas that can be harder to measure by estimating the situation. Availability includes unplanned downtime, scheduling, and utility issues. OEE will also include operator error; process upsets, and supply chain management.

By utilizing OEE for making business decisions, a business can increase efficiency and find a quick ROI. Some facilities have identified payback in a matter of weeks; they are leveraging OEE and specifically downtime tracking at an excellent level. Though there is no promise ROI will be in a matter of weeks, using OEE to make business decisions and then leveraging those to improve, they typically find ROI can be achieved in a matter of months.

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Role of OEE in Lean Manufacturing

The Lean methodology focuses on removing non-value-adding activities and waste to reduce complexity and cost. The Lean approach provides foundation for operational excellence by process standardization, worker empowerment and instills a culture of continuous improvement.

All employees are involved in continuously reviewing and improving efficiency throughout a process or value chain when Lean techniques are in place. Lean techniques may include visual controls to help operators identify the right times to adjust equipment, or preventive maintenance to reduce the number of equipment failures by proactively maintaining equipment.

OEE, a measurement used in Total Productive Maintenance programs, is a metric commonly found in Lean Manufacturing. The OEE metric and Lean process can help manufacturing answer three questions:

  • How often is the machine available to run?
  • How fast is the machine when running?
  • What is the count of acceptable parts made?

In addition to the three questions are six areas of losses that can affect the OEE and its three components. Breaking down the losses to these categories helps the Lean manufacturing team prioritize improvements.

Breakdown Losses

Breakdown losses falls under the OEE “availability loss” and Lean’s “unplanned stops” – sudden or unexpected equipment downtime that makes the machine less available. Contributing factors may include:

  • Major mechanical failures
  • Electrical system failures
  • Structural failure

Set-up & Adjustment Losses

Set-up and Adjustment Losses are an availability loss that falls under Lean six big loss of “planned stops”. The degree of loss depends on factors such as:

  • Standards process
  • Tooling consistency and quality
  • Skill-level of operator

Idling & Minor Stoppages

Production is interrupted by a temporary malfunction or when the machine is idling. This is an OEE performance loss and falls under the Lean “small stops”. Contributing factors include:

  • Defective products resulting from a line shutdown
  • Operator on other machine or other tasks
  • Temporary equipment malfunction

Reduced Speed Losses

This stage refers to the difference in equipment design speed and the actual operating speed. It is an OEE performance loss and a Lean “slow cycles”. Factors include:

  • Mechanical problems
  • Risk of making unacceptable parts at higher speeds
  • Operator training

Process Defects

Process defects occur during the stages of production – from machine start-up, warm-up, and “learning phase”. This stage is an OEE quality loss and “production rejects” in the Lean stages. The degree of loss depends on factors such as:

  • Maintenance of equipment
  • Tooling
  • Raw Material
  • Operator skill level

Reduced Yield

Losses in quality caused by malfunctioning equipment or tooling. An OEE quality loss, the degree of loss depends on factors such as:

  • Maintenance of equipment
  • Tooling
  • Raw Material
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6 Important Features To Look For In Your Downtime Software

Profit and productivity are the backbones of any business. Without these two ingredients, there is no incentive to run a business. However, achieving both of these is no child’s play. Several factors like unplanned downtimes, productivity stops, and operational glitches lead to loss of production. Productivity principles like Lean Manufacturing were designed to overcome these productivity killers. Manufacturing plants use OEE as a tool to measure the effectiveness of their plant and processes.

Higher availability of plant and machinery means better output. Efficiency can be further improved by eliminating waste from the process. But, this is easier said than done. Murphy’s law ‘Anything that can go wrong, will go wrong’, clearly defines how things work in manufacturing plants. Things go wrong all of a sudden and managers are bound to get unpleasant surprises. Such breakdowns not only waste time but also increase the overall costs. Delay in production, labor idling, and emergency repairs bring a lot of negative impression on the balance sheets. To Reduce Manufacturing Costs plant managers aggressively use tools for monitoring Manufacturing  Downtime.

Downtime Software programs work as 24/7 monitors of the whole manufacturing process. They monitor the progress of your machinery and report all kinds of problem or maintenance updates in a prompt manner. They work as a preventive mechanism which keeps you alert towards the need for maintenance and upkeep of the machines. It keeps the managers as well as the operators in the loop and shows easy to understand color-coded alerts. You can see the performance of machines or reasons for unplanned stops in real time anywhere even on your smartphone.

manufacturing process monitoring

This trend has made Downtime Software programs quite important for manufacturing plants. There are lots of programs in the market with a variety of features and advantages and all are not the same. However, this may also create a problem of choice in front of the managers. While most of the programs offer all the standard features, yet it is important to know the important things to look for while choosing the best Downtime Software for easy and effective monitoring of Manufacturing Downtime.

Key Features of Downtime Software

  1. Easy Access Everywhere
    The only thing worse than not having a Downtime Software is not having access to it on the go. The times have changed and they have drastically changed the way business is done these days. You can’t stick to the plant all the time but not knowing the problems as and when they occur can be a problem. Go for a software to track Manufacturing Downtime that shows you the real-time data on your smartphone too.
  2. Better Data Representation
    Confusing or complex data doesn’t solve any part of the problem. It may be good for scholarly work but when it comes to real problem solving it just increases the problems. Choosing a Downtime Software that shows problems and alerts in color-coded easy to understand way is the best.
  3. Historical Representation of Data
    To judge the performance of any machine or calculate the efficiency of any process it is always important to have a broader picture. Historical data helps you in analyzing the performance of your machines and processes in the correct way. This should be a thing to look for in your Downtime Software.
  4. Identification of the Main Sources of Downtime
    Managing a manufacturing unit is a tough and demanding job. There are too many components and things easily lead to a butterfly effect. In such places, correct assessment of the main sources of the downtime is very important. This helps in faster resolution and shorter downtime. Always look for a Downtime Software that helps you in precise identification of the main sources of downtime.
  5. Knowledge of Main Productivity Killers
    Every manufacturing plant develops its own productivity killers over a period of time. They slow down your system and remain inconspicuous. Your Downtime Software must be capable of finding out the productivity killers. It must have a way to scale productivity on various parameters to get accurate information.
  6. Separate Computation of Planned Downtime
    Stats are a source of knowledge but incorrect stats can be very dangerous. They may make you look for problems in the areas where there is none and you may end up wasting a lot of time and energy. Planned and unplanned downtimes are two separate things. Planned downtimes are necessary and they do not disrupt your production. But, if your Downtime Software is computing this time too in Manufacturing Downtime, then you may have misleading facts in your hand. Your software must have provisions to calculate both separately.

Choose a program that solves the purpose and helps you in achieving your production goals easily. Programs that offer a dozen of features that don’t solve a real problem but work as an eyewash are of no use.

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Communication is Key to Employee Engagement

If you want your employees to feel good about your business and the direction it’s headed, you’ve got to keep them informed. Effective communication with employees results in workers who both rate their employers’ reputations favorably and feel their company’s best years are still to come. Thrive believes these key communication pieces will ensure effective employee engagement:

Communication can make or break workplace engagement

Most employees are eager to participate in a recognition program, just as the management team is eager to promote the program. Keeping your team engaged can be a challenge, but satisfied employees will work harder and with better quality, so finding ways to keep employees engaged and excited about their jobs is crucial. You can do this if you have a positive and fair recognition program, and know how to communicate it with your employees.

effective organizational communication

Communication & Information Breeds Motivation

One of the biggest complaints from employees is they are not informed of what is going on within the company. They come to work, do their job, and go home. They have no reason to strive for greater overall results for their employer.

Employees need to be informed to be motivated and fully engaged.

For example, if you are struggling with shipping accuracy of a certain product, let employees know by giving them constructive feedback of how to fix the problem. Many manager’s first instinct is to reprimand the individual or department, which leads to discouraged employees. Using this communication method, the problem tends to only get worse. It’s all about how you say it!

In most cases, if you communicate your message well, you will see the problem become resolved. Once resolved, make sure to recognize the individual or group responsible for rectifying the problem. It can be something as simple as congratulating them in front of their co-workers at the next meeting or bringing coffee and donuts before work begins. Employees should feel as though they are appreciated for their efforts.

Communication is key to keeping your employees motivated to continue to meet company goals. Engaged employees will work harder, stay positive, and work as a progressive team. As a company, you can communicate your appreciation through formal promotions, presentations, or simply verbally thanking employees for a job well done. If your employees are informed and motivated, they will work harder to achieve better results!

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How to Help Your Millennial Employees Flourish and Succeed

Many assumptions have been made about millennials in the workplace however, Thrive believes with small tweaks to your approach in leadership, you can help millennials flourish in your business. Follow these suggestions and watch your younger team members come to life in the workplace:

  • Listen to their ideas

Millennials often feel like their ideas aren’t taken seriously simply because of their age—and in many cases, they’re right. The age bias is a real concern when there are various generations working together on one team.This generation is well-versed in modern technology and is known for being creative with their approach to challenges. If you encourage them to speak up and show that you value their opinions, you’re more likely to harness their unique skill set. Keep an open mind when you have conversations with your millennial employees. You never know when you may learn about a new piece of technology that could make doing your job a little easier or an out-of-the-box solution that might boost your revenues.

  • Set up lunch dates

Sometimes the reason why older and younger people struggle to connect is because they haven’t found common ground. Encourage millennials and other workers to get to know each other by creating a program that pairs younger/older team members and have them go to lunch together. For example, two people may both love golf. Once they get to talking about their strokes and favorite courses to play, they’ll have an easier time talking about work-related matters

  • Let the slang slide

Sometimes, what feels like a slang word to you may actually be an emerging linguistic trend. Instead of dismissing the way millennial employees may speak, try seeing it from a different perspective. The best way to learn how to communicate with your fellow team members is to engage with them on a daily basis. If there’s a term you don’t understand, don’t feel ashamed to ask for clarification. Who knows, you might actually like it and come to use it yourself! Or, if you serve millennials, you can use this new lingo to improve your customer relations.

  • Give them work that matters

Perhaps even more so than other generations, millennials like to feel that the work they’re doing is making a difference. This can be a difference in your business reaching its goals or a difference in your customers’ lives. No matter what, millennials want and need to feel like a valued part of your team.