Overall equipment effectiveness (OEE) metrics are coming in handy during this recession. OEE is a set of measurements that tracks the availability, performance and quality output of plant equipment.
More and more, plants are turning to OEE to get increased efficiencies from their existing equipment. The rationale for measuring OEE is varied. Some seek to extend the life of existing equipment; others want to reduce costs during the recession. The overriding goal is to increase production without investing in more equipment or personnel. Recently, plants have turned to real-time OEE so they can make efficiency adjustments while the equipment is running. Some are adding a new dimension—energy consumption metrics—to the classic OEE measurements of equipment availability, performance and quality.
Simplest KPI
OEE is an individual component of a plant’s overall measurement of key performance indicators (KPI). “OEE is the simplest KPI there is. It measures how much stuff I made that I can sell vs. how much I could have made if I did everything right,” says Todd Smith, product manager for Rockwell Software, at vendor Rockwell Automation Inc., Milwaukee. “If you’re not measuring that, you’re out of business.”
Ultimately, OEE helps plant operators fine-tune their equipment to improve production. “The goal of OEE is get more products out of the door. You try to find the hidden capacity to increase the amount of production without having to invest,” says Tim Goyette, senior software engineer at Production Process, a company in Londonderry, N.H., that offers tools to track OEE. “If you’re getting 80 percent quality, you want to find out where that other 20 percent is and figure out how to improve that 80 percent number.”
As companies strive to lift their OEE metrics, improvements get difficult as efficiency rises. “It’s easier to take your line from 50 percent OEE to 75 percent,” says Yves Dufort, head of the food and beverage vertical at automation software supplier Wonderware, in Lake Forest, Calif. “It’s a lot harder to take 75 percent to 85 percent. Only Toyota is getting to that 85 percent.”
He notes that effective OEE tracking involves more than getting the equipment to run smoothly. “When I was at Labatt Brewing Co., one shift would run 600 to 700 bottles per minute all day flawlessly. But another line would run 1,000 bottles per minute,” says Dufort. “It took the supervisor to see that the performance rate was off. They found out it was a filter that was slowing down the entire line.”
OEE reveals the efficiency of each single piece of equipment rather than looking at the whole plant. The idea is that the plant will be more efficient if each individual piece of equipment is running optimally. “With OEE, we’re looking at the bottom up, not the entire plant. We look at a single piece of machinery,” says Alan Cone, product manager for HMI at Siemens Energy & Automation Inc., an Alpharetta, Ga.-based supplier. “Do I have to slow my line down to refill the hopper? How do I solve that? Add a machine? Do I need to bring in half my shift early so they can pick up production instead of drinking coffee for half an hour?”
Make it actionable
The difference between OEE metrics delivered in delayed reports and real-time OEE is often the difference that lets operators respond to the metrics. “If you find you missed your mark two weeks ago, that’s ancient history. It’s not actionable,” says Stan DeVries, director of operations management solutions at automation provider Invensys Process Systems, in Plano, Texas. “You have to get the right information—and only the right information—to the right person at the right time. Real-time OEE lets plants adapt OEE to make it more actionable.”
Real-time OEE—sometimes called “dynamic” OEE—lets operators tweak their equipment as it’s running. “The thing that’s really changed in OEE is it’s becoming more dynamic or real-time,” says Craig Resnick, research director at ARC Advisory Group Inc., in Dedham, Mass. “With real-time measurements, operators can make real-time decisions. If a machine is not running up to its full potential, one of the OEE variables will be out of whack. You can monitor it constantly and make the corrections as the problems occur.”
Hot topic
The recession has brought new attention to OEE. Plants are looking to reduce costs and get more production without investing in new equipment. “OEE is a hot topic these days because of the economy. Budgets have been cut or frozen, so plants are looking inward to improve their own processes,” says Melissa Topp, manager for manufacturing intelligence at Iconics Inc., a manufacturing software supplier based in Foxborough, Mass. “OEE is a way to benchmark where the plants stands today and identify problem areas where improvement can be achieved. Plants are using OEE to help make those improvements.”
To a large degree, OEE is an alert that lets you know you’re spending money unnecessarily. “The ideal is 100 percent capacity and quality. But the real world is less than ideal, so OEE looks at the difference between ideal and actual. The difference is losses,” says Gary Lerner, director of product strategy at Systech International Inc., a packing operations software company in Cranbury, N.J. “OEE provides a way to calculate the machine’s effectiveness and identify those losses. It’s not a pill you can swallow and suddenly the equipment runs better. It’s a score that tells you whether you’re winning or losing.”
OEE can be used as a way to compare multiple plants within a company. It becomes a best practice that can be used as a template to improve less efficient plants. “OEE is definitely a metric that can be carried over as a best practice. If I have 10 plants, which is the best? The best one will have a higher OEE score,” says Augie DiGiovanni, vice president of PlantWeb services for vendor Emerson Process Management, in Austin, Texas. “The best plant may have more transmitters, more valves and more diagnostics. So you take that to the older, dumber plants to improve their asset performance.”
Energy watch
In recent years, some plants have added a fourth component to the availability, performance and quality metrics of OEE—energy consumption. “We’ve started talking about OEE as a factor for measuring energy consumption,” says James Jones, product manager for EAM at Infor, an enterprise software company in Alpharetta, Ga. “You have machinery people who are effectively using OEE as a KPI, but you also need to consider how much it costs to run that piece of machinery.”
Jones notes that OEE without energy consumption metrics doesn’t capture all of the data needed to make the equipment efficient. “You can take two machines with identical OEE. Both machines are running at optimal performance and producing the same number of widgets, but one machine is less expensive to run because it uses an energy-efficient filter,” says Jones. “When you look at OEE without the energy metric, you don’t see the difference.”
OEE is becoming widely used to help plant managers trim costs. The cost reductions that come with OEE are especially interesting during these recessionary times. OEE has been around a long time, dating back at least to the 1960s, but recent developments in real-time OEE have given it more attention as a cost-savings tool. Operators can tweak the equipment on the fly and squeeze out new efficiencies. Some plants have added energy consumption measurements to the OEE mix to eek out even greater savings.
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