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OEE: A Shop-floor Metric That Links Cost Reduction to Revenue  “OEE is the missing piece in benchmarking,” says Ulf Stern, senior advisor for asset management solutions with enterprise software supplier IFS AB (www.ifsworld.com), Linköping, Sweden.
OEE, or Overall Equipment Effectiveness, is a numeric index that represents actual revenue-generating production in terms of potential revenue-generating production. Applied to a machine or work cell, OEE analysis focuses attention on cost-reduction opportunities that will be realized by true process improvement rather than by subtracting value from the manufacturing process or from the product itself. “To optimize investments and operations budgets,” Stern continues, “you cannot only look at the cost side, because everything you do in the plant also influences revenue. OEE analysis balances cost reduction, efficiency and revenue.”
OEE is defined as the ratio of a machine’s actual defect-free production per unit time to the machine’s maximum (sustainable) defect-free production per unit time, with “machine” being taken to mean any production asset: machine, work cell, line or plant. OEE is always a fraction between zero and one that when multiplied by 100 yields a percentage.
“It’s a very easy metric to get your head around,” says Todd M. Smith, product manager for FactoryTalk Metrics at supplier Rockwell Software (www.rockwellautomation.com), Milwaukee. “Everyone does that calculation mentally at some level. You start asking the question, ‘I made 5,000 last shift. It seems like I should have made 6,000. Why didn’t I?’”
OEE’s usefulness in answering that question emerges by breaking OEE into three factors: availability, performance and quality...
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» TECHNOLOGIES: Multi-Core Virtualization Changes Process Controllers -
“An automation system at the level of the process controller should have three things,” says Casey Weltzin, product manager for LabView Real-Time at automation and test vendor National Instruments Corp. (www.ni.com), in Austin, Texas.
“First, it should be able to interpret sensor data and direct actuator behavior in real time. Second, it should have an HMI (human-machine interface) so that the operator can monitor and adjust the production process. And third, it should be able to network the local process control activity to a higher-domain system such as a DCS (Distributed Control System) or a SCADA (Supervisory Control And Data Acquisition) system...
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» INFRASTRUCTURE: Network Security Demands Less Complexity -
As threats multiply, network security technologists rush to neutralize them.
Still, though, embarrassments and problems persist. “Most we’ve seen come from confusion and complexity,” observes Eric Byres, chief technology officer of Lantzville, British Columbia, Canada-based Byres Security Inc. (www.tofinosecurity.com), a firm specializing in industrial cyber security. “People hang stuff on control system networks just as you do ornaments on a Christmas tree...”
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» INDUSTRIES: Current Economics Challenge, Change Pharmaceuticals -
The pharmaceuticals industry isn’t immune to the current economic recession.
That’s brought “extreme focus on cost reduction,” relates Alison Smith, vice president of marketing strategy and research at Aspen Technology Inc. (AspenTech, www.aspentech.com), Burlington, Mass., a provider of process optimization products. “Manpower cuts in manufacturing of 50 percent are not unusual. This is necessitating more automation of previously manual processes...”
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