In manufacturing, operational efficiency isn’t just a buzzword—it’s a necessity.
Overall Equipment Effectiveness, or OEE, emerges as a critical metric here, encapsulating the heart of manufacturing productivity and profitability.
OEE provides a comprehensive measure of how well equipment in a production or manufacturing setup is being utilised, broken down into three critical components: Availability, Performance, and Quality.
Traditionally OEE was calculated manually by collecting data from around a company, entering it into a spreadsheet, and then making decisions on activities that have long since passed.
With OEE software like POET, organisations can now see their OEE data in real-time, enabling them to make instant decisions rather than operate with hindsight.
Optimising OEE enhances manufacturing productivity and significantly boosts profitability.
Learn how POET Systems can improve your OEE.
Understanding OEE
What is OEE?
At its core, OEE, or Overall Equipment Effectiveness, is the multiplication of three critical factors: Availability, Performance, and Quality.
By quantitatively measuring these elements, OEE is a powerful tool for assessing and enhancing production operations.
• Availability focuses on measuring the actual operating time against the planned production time, highlighting moments of unexpected downtime or delays. This could include equipment failures, material shortages, or unplanned maintenance, providing insight into the reliability and readiness of production assets.
• Performance evaluates whether the manufacturing process is running at optimal speeds, taking into account the ideal cycle time versus the actual cycle time. Factors contributing to performance losses could include minor stops, idling, and reduced speed, which may not halt production entirely but do lower the effective output rate.
• Quality assesses the proportion of good parts or products against the total produced, immediately pointing out the rate of products that meet quality standards versus those that require rework or are scrapped altogether.
Do you want to learn more about the basics of OEE? Click here to discover more about OEE and why you should use an OEE monitoring system.
Why is OEE Important?
Measuring Overall Equipment Effectiveness (OEE) is paramount because it directly correlates with a company’s bottom line. The higher the OEE, the more profitable a production run can be.
OEE software in real time not only helps pinpoint inefficiencies but also provides actionable data to enhance these areas. By continually monitoring these key performance indicators, businesses can ensure that operational decisions are data-driven and geared towards improvement.
Silos can be broken down and teamwork improved using OEE software. The old ‘blame game’ as to what is and has happened, finger pointing, and undermining is soothed and healed by real time data, enabling teams to make quick decisions and avoid issues altogether.
Now, making decisions in real time during a working shift and achieving production targets is more possible. Tackling issues head on means less issues to report later.
This holistic approach guarantees that all resources, including machinery, manpower, and materials, are optimally utilised. Optimising resource usage minimises waste—whether it’s time, material, or energy—thereby reducing operational costs.
Furthermore, an effective OEE implementation supports sustainable practices by ensuring operations are as efficient as possible, thereby having a lesser impact on the environment.
Impact of OEE on Manufacturing Productivity
Enhancing Equipment Availability
Equipment downtime is a significant productivity killer. Your production equipment are assets. When they are not running, they are not making you any money!
By focusing on ‘Availability’, manufacturers can identify and mitigate frequent downtimes, whether caused by maintenance issues, setup, or adjustments, thereby significantly improving uptime and productivity.
Equipment that frequently suffers failure is easy to identify with OEE software, encouraging you to make investment into preventative maintenance that you can justify using real life data.
Optimising Performance Efficiency
Performance entails measuring the speed at which products are manufactured against the ideal cycle time. Eliminating bottlenecks, optimising workflows, and ensuring equipment operates at peak capacity can significantly enhance overall manufacturing performance.
Monitoring performance also frequently overlaps with quality (below). If a production line is running slower than it should, it could be that people have slowed it down due to struggles with quality control at the ‘desired’ speed.
By investigating performance, you may find it is really telling you about a quality problem.
Maintaining Product Quality
A high OEE score is synonymous with producing quality products efficiently and consistently. By focusing on ‘Quality’, manufacturers reduce the rate of defective products, improving the quality of output that meets customer satisfaction and reduces waste.
Quality can often be a major factor in performance, as discussed previously. If you quality is too low, teams often have to run production lines for longer periods consuming or reworking materials.
The cost isn’t just in the materials wasted and reworked, the cost is also in the other jobs waiting to be loaded onto the line. Lower quality means higher cost.
OEE’s Role in Boosting Profitability
Reducing Operational Costs
Improving OEE scores directly impacts operational costs by reducing waste, minimising rework, and optimising maintenance schedules. These efforts culminate in a leaner, more efficient manufacturing process that maximises profitability.
The most obvious cost savings are in material usage, but there is also the labour saved by producing more in less time, and less distractions for supervisors and managers.
Maximising Output and Revenue
An optimised OEE score means manufacturing operations are running more efficiently, allowing for higher output without additional capital expenditure.
That decision to purchase another production line may not be needed now you’ve improved your efficiency.
Implementing OEE Improvements
Start with Data Collection
The journey to improving OEE begins with accurate data collection. Monitoring and analysing data related to Availability, Performance, and Quality reveals insights into operational inefficiencies and areas ripe for improvement.
With OEE software, data collection happens in real time. If you don’t have access to real time OEE data, you will always find out your issues too late. It has already happened and you’ve taken the loss.
If you can take action in real time, you can steer your outcomes rather than be in the passenger seat of them.
Continuous Improvement and Lean Manufacturing
Monitoring and improving OEE is refreshingly easy with OEE software, meaning embracing the principles of lean manufacturing and continuous improvement ensures gains in OEE are sustained over time, fostering an environment of excellence and innovation.
POET’s OEE Case Study
Burtons Biscuit Co, a renowned UK manufacturer since 1935, famous for its ‘Jammie Dodgers’ and ‘Wagon Wheels’, enhanced its production efficiency OEE (overall equipment effectiveness) measure by 10% in just 12 weeks by implementing POET software to track its OEE and drive change, utilising its collaboration features.
Challenges: Burtons struggled with monitoring real-time performance on their production lines, impacting their productivity and ability to meet hourly output targets due to the lack of immediate data for Short Interval Control (SIC) meetings.
Goal: The primary objective was to introduce a platform capable of delivering hourly performance data for production lines, facilitating the use of this information in frequent SIC meetings to boost productivity and consistently achieve hourly targets. The system also needed to manage meeting actions and display real-time OEE data lineside for operatives.
Solution: POET Systems implemented a bespoke OEE software solution that provided:
• Hourly output monitoring per line.
• Analysis of waste, availability, and performance.
• Color-coded KPI displays (red/green) to indicate hourly progress to teams.
• Capability to host regular meetings, assign tasks, and track progress in nearly real-time.
If you’re interested in exploring our detailed case study further, please click here.
Optimise Your OEE With POET Systems
OEE isn’t just another manufacturing metric. It’s a comprehensive gauge of productivity and profitability.
By focusing on improving OEE scores, manufacturers can ensure they are getting the most out of their equipment, processes, and people.
The path to superior manufacturing efficiency, productivity, and profitability begins with a commitment to understanding and optimising OEE.
Are you ready to unlock the full potential of your manufacturing operations?
Get in touch with POET Systems today, and let us help your business.
