Guest entry from one of our consultants:
"I recently contributed to a post on OEE measurement on Lean.org from a guy asking if OEE is the measure for his bespoke manufacturing plant. Having posted it, I think it’s worth posting here as well:
Here’s a thought for you:
OEE is a great metric for a process in which equipment is the constraint.
You can tell this from the way that the 6 losses/3 losses of OEE are all based on equipment performance.
At this point i would like to ask you a question – what is the constraint in your manufacturing process?
I.e. if you want to increase output what is the first thing that you change – do hire more people to run more machines, do you buy more raw materials, do you book more outgoing vehicles, do you reduce changeovers, do your increase machine running time? You can find this out be asking a random selection of people – “what do we need to do to produce more parts?”
Based on my experience in similar environments to yours equipment performance is very rarely the bottleneck in the process; it’s typically human related. I.e when we bring in more people we make more product. In this instance the best metric is something human related – a productivity Man hours/tonne type measure with OEE as a secondary driver on specific machines.
I’m not saying don’t use OEE, i’m saying make sure that your primary measure causes you to optimise your bottleneck. I was in a packing environment with 30yr old machines a while ago where they have 200% capacity and were measuring OEE. To get OEE up they were running 1/2 their machines as hard as possible whilst the others were stopped. Due to the age of the machines this meant huge amounts of maintenance was needed to keep the machines running and lots of labour to keep them going. By moving to a productivity measure we now run all the machines at 40% OEE with the same number of staff. Our cost per tonne has gone down and our poor old machines aren’t being thrashed to bits.
Pick a measure that measures your constraint. Use OEE only when equipment is your constraint.
Here’s an idea – if you want to measure productivity then it’s possible to program your XL800 OEE system with a productivity constant. This will enable it to display a real time “£/Unit” or “Man hour/Tonne” type measure on your factory floor. OEE is only the starting point!"