How to Improve Manufacturing Productivity with Overall Equipment Effectiveness (OEE)

Reduce changeover time, improve supply chain predictability, and enhance quality and throughput

The imperative to maximize productivity while ensuring product quality and sustainability across the enterprise has never been more critical to stay ahead of the competition. Specifically, you need to aggressively improve your operations to reduce changeover time, improve quality and throughput, drive supply chain predictability, and lower costs.

What is OEE?

OEE stands for Overall Equipment Effectiveness. It is a standard for measuring manufacturing productivity, comparing how well a manufacturing operation is used versus its full potential, during the periods it is scheduled to run.

Different industries have varying benchmarks for OEE. For example, for the bottom-performing 70% of food and beverage (F&B) manufacturers, OEE is 74%. For the top performing 30% of F&B manufacturers, OEE is 89%, according to a study by Aberdeen Group*. This indicates that top OEE performers earn leader status. According to the same study, the aggregate of all F&B manufacturers’ OEE is 80%, which leaves a great deal of room for improvement for most companies to produce more with their existing equipment.

The good news is you can close this opportunity gap. With today’s technology solutions powered by the Industrial Internet such as Proficy Smart Factory Cloud OEE, you have the ability to connect disparate data, leverage analytics, and gain visibility into your operations to ensure your assets are operating as they should—at every step of the process. OEE can help boost your productivity, drive Operational Excellence, and move toward optimizing your asset performance—enabling your business to stay more competitive than ever.

What is the OEE formula?

OEE is calculated by first measuring three factors: Availability, Performance, and Quality. OEE, expressed as a percentage, is then calculated by multiplying those three factors together to come up with a number. This number provides the foundation for improvement by allowing the efficiency to be measured against other plant metrics as well as against other industries for benchmarking.

Here’s a closer look at each of the three factors of OEE:

How can an OEE solution impact my operations?

An effectively deployed OEE tracking and reporting solution allows you to track and monitor production and business-driven key performance indicators (KPIs). Utilizing automatically collected data, managers can track downtime, waste, production counts, and user-defined events, and automatically or manually associate events with a specific cause on a real-time basis.

By utilizing an integrated S95 data reference model, you can analyze equipment effectiveness based on reasons and details to identify root causes. S95 is the international standard for developing an automated interface between enterprise and control systems.

You can summarize and analyze your data in the context of production events such as by equipment, by product, or by personnel (hour, shift, and day) for improvement. Furthermore, events and reasons can be correlated to actual production operations; and based on this data, you can develop reports and dashboards for real-time decision making. With new capabilities like cloud-based software, mobility, and HTML5, managers can respond faster to production events than ever before.

To summarize the benefits, an OEE solution provides:

• Insights into root causes
• Contextualized analytics
• And powerful reporting

How’s that for impact?

GE Digital customer increases OEE and saves $300K

A well-known food manufacturer faced challenges due to manual reporting, lack of visibility into data, and production inefficiencies. It turned to GE Digital's software to help view real-time production data anytime, anywhere and quickly make adjustments to current production runs. Accurate production data enabled it to identify improvement opportunities and drive the right actions.

The result:

10% improvement in OEE over the last seven years, $300K cost savings with production improvements, increased data visibility, and higher efficiency.

How is OEE performance measured?

There are a variety of ways to calculate OEE, but the most efficient and reliable way is to base calculations on automatically collected data as opposed to manually entered information. Manual methods are more prone to operator error and time consuming, and present challenges when it comes to connecting your data for visibility and analytics. In addition, if the data is stored electronically, it’s available for further analysis.

To make effective use of your manufacturing data using OEE, here are a few recommendations:

• Data should be easily collected, recorded, and transmitted from any source in a reliable, secure, and highly configurable manner.
• Data collection should be fast. Ideally, the system will reflect efficiency and quality data in real time, so a rapid means of collecting the data is necessary for the information to have the greatest impact.
• Data must be accurate. This can sometimes be difficult to accomplish, so an effective process should be applied to the practice of collecting data.

The power of OEE in the cloud

Solutions delivered in the cloud are a growing choice among leading manufacturers, a key reason being the speed at which a solution can be deployed. In fact, cloud-based OEE applications can be implemented and deliver value in as little as two to six weeks. Cloud solutions can also scale with your company to support Operational Excellence across all of your factories. These solutions have a very low hardware infrastructure footprint, ultimately lowering TCO of the OEE system.

The push for profitability

New entrants, constant innovation by competitors, and the rising threat of retail brands made it harder than ever to prosper in the soft drink market. To maintain profitability and market share, one soft drink bottler sought operational improvements all along its supply chain.

Reliability, predictability, and efficiency

Beyond improved operational visibility, the manufacturer sought a strong foundation of reliability and predictability so it could safely use manufacturing performance as an indicator of delivery performance, instead of depending on inventory buffers and warehouse space. When assessing the best way to sustain its position, the company looked in the unlikeliest of places—its manufacturing operations.

Delivering line side metrics and analysis that empower operators to manage and respond effectively to process upsets, GE Digital's manufacturing software helped the bottler uncover lost capacity and drive efficiencies. The solution provided root-cause analytics that led to asset and process re-engineering, and deep capability analysis to optimize the company’s planning and scheduling activities.

Maximized OEE optimizes manufacturing performance

By empowering stakeholders across different functions with objective performance data, GE Digital's software helped the manufacturer realize powerful outcomes:

• Achieved Overall Equipment Effectiveness rates ranging from 85%–95%
• Reduced inventory buffers on the distribution side of the business; streamlined flows of inbound materials
• Improved capital planning based on historical analysis of capability

Getting the most out of your assets

As you face rising costs for raw materials, energy, and transportation, getting the most out of your assets is evermore critical. You can't improve what you can't measure. OEE solutions have proven to be a key enabler to providing the information you need to take action on equipment bottlenecks, unscheduled downtime, and lost production due to material or resource shortages.

These intelligent insights enable you to make smarter, better, and faster decisions to achieve greater productivity from your existing equipment.

Move toward optimizing your asset performance management and driving Operational Excellence. GE Digital's proven technology solutions helps manufacturers around the world increase equipment utilization rates and drive costs out of manufacturing.

Download this white paper.