In spite of a global shipping crisis, semiconductor shortage, and lingering coronavirus pandemic, it’s more important than ever for firms to accelerate their digital transformation initiatives. However, implementing new technological solutions can be daunting for many traditional manufacturers. The investment needed at the start and skill sets required going forward often mean that such projects cannot be completed without serious consideration and calculation.
The economic climate will remain uncertain for the foreseeable future. Manufacturers need to increase production efficiency, improve quality assurance and develop new products faster than competitors to stay ahead of the game. With our help, they can achieve all this while maintaining quality standards and tight budget constraints.
Measuring OEE
OEE (Overall Equipment Effectiveness) is widely accepted as the most reliable metric for identifying aspects of the underperforming production process. This enables firms to benchmark their progress with a view to improving their productivity going forward by identifying and eliminating inefficiencies.
If a manufacturer wants to get a clear sense of how good (or bad) its OEE is, it should consider asking the production manager to keep track. But, an even better approach would be to automate the collection of data from production equipment.
For example, when downtime is measured manually, production operators must keep track of all instances and record them. However, an operator might neglect to record short stoppages that don’t require maintenance input. After all, the operator’s main focus is on ensuring production actually happens. But these short stoppages add up and can have a significant impact on a line’s overall OEE.
The True Measure Of Operations Efficiency
In order to improve the efficiency of their operations, manufacturers need to measure downtime on the shop floor. If they do not keep track of every instance when production stops and start-up time is needed, they will never know how efficient their operations are. They could be losing hundreds of hours of production time each year due to minor stoppages. And these stoppages could be caused by a very simple issue, one that if resolved would drastically boost productivity.
Because business leaders rarely spend time on the shop floor, they can’t get a clear picture of what’s happening there. And without that information, it’s difficult to set benchmarks for improvement.
Automatic Approach to OEE Monitoring
By using an advanced OEE monitoring solution, manufacturers can easily identify the root cause of issues and solve problems immediately. In the long run, this will reduce overall operating costs and enable manufacturers to improve their OEE levels in a consistent manner.
Automated OEE monitoring solutions provide accurate, actionable, and timely data on line performance, the key to continuous improvement.
The Financial Benefits of OEE Monitoring Solutions
Each aspect of OEE should be broken down into its own financial equivalent as you look to measure performance across the organization. There are three aspects of OEE monitors: availability, performance, and quality.
- Availability – monthly cost of downtime can be calculated by multiplying the number of downtime hours by the hourly cost of downtime, which would include employee time, fixed machines costs, etc.
- The cost of production under-performance can be realized by calculating the costs associated with running a machine or line longer to make up the deficit.
- Quality – the cost of below-standards production can be calculated by multiplying the number of rejected products by the cost of each. However, this does not reveal the true impact as it does not include the rework cost.
By making use of simple calculations, manufacturers can gain at least a sense of the financial impact of production inefficiencies.
Why Production Monitoring Is The Key To Successful Business Decisions
A nice way to visualize this is by way of an example. For instance, a company might be facing a surge in demand it cannot currently fulfill. The knee-jerk reaction is usually to invest in additional capacity in the form of new equipment. But by having a clear understanding of the production process, including issues and efficiency figures, management can look to maximize their existing asset utilization in the first instance, instead of making a capital expenditure on new equipment.
By having accurate, timely information regarding cycle times, manufacturers can take advantage of more intuitive resource planning strategies and benefit from greater resource utilization, allowing them to adopt more competitive pricing, and differentiate themselves in their marketplace.
With OEE directly linked to financial outcomes, firms can prioritize targeting the most inefficient areas of their production lines and literally put money back on the balance sheet.
Manufacturers can benefit in a number of ways from implementing a bespoke OEE monitoring solution. Solutions like Tipteh IoT platform is simple, affordable, and accessible to all manufacturers.
