Measuring Overall Equipment Effectiveness (OEE) - Achieving Magical Gains in Manufacturing Efficiency - Part 1 of 2

This blog is part one of a two-part series exploring how to achieve gains in manufacturing efficiency through Overall Equipment Effectiveness (OEE) and loss deployment. Part two continues this conversation covering how to achieve predictive awareness of manufacturing efficiency.  

Thinking of Industrial Manufacturing Improvement as a Continuum 

I always think of any kind of “improvement” as a continuum - as a plane of continuous movement forward to becoming and doing “better”. If you are in manufacturing, then this continuum of improvement is most likely part of your organization’s operational approach, targeting continuous improvement in efficiency and throughput, product quality, energy use and costs, work efficiency and collaboration, and more. And of course, all these aspects are aimed at staying ahead of your competition. So, when ICONICS and our partners start a conversation about efficiency gains with a manufacturing customer, we typically ask some form of the question, “What are you hoping to gain at the end of this project?” Surprisingly, the answer many customers give is that they’re looking for some “magical gain” in their manufacturing efficiency. They're not quite sure what it is they need, but they do know they need to improve efficiency, quality, performance, and uptime. They want some kind of “magical gain” but aren’t quite sure what it is or how to get there.  

As we dig deeper into that conversation, it really comes down to the fact that they’re looking for a way to achieve data correlation that will give answers and increase understanding of their current operational challenges. And if we take that conversation even further down the road, it typically leads to not only looking for data correlation and answers to current challenges, but also looking for some predictive awareness as well. The customer is looking for some indication that their performance, their efficiency, may go south prior to it happening. (We cover that in part two of this blog series.) As background for understanding how to achieve these magical manufacturing efficiency gains, it’s important to go over four key aspects to a successful manufacturing efficiency project.  

4 Keys to a Successful Manufacturing Efficiency Project 

1. The first key to a successful manufacturing efficiency project is to have the right technology suite. You want to look for a vendor (of course like ICONICS) that has the robust advanced technology for this type of project along with having partner applications (again like ICONICS) that can be integrated into the application to provide insights for efficiency gains.  
2. Second, there needs to be long-term commitment to the goal. When you look at manufacturing efficiency, frequently it's never a “one and done” type of project. You can't deploy a system and say, “Great, we've achieved gains; we've fixed everything. End of story; we can all go home now.” It's always an iterative process. As you learn more about your manufacturing process, you learn how to tweak it to achieve additional improvements. Think of it more as a journey rather than a destination.  
3. Third, it's especially important to have the right team of people in place for implementation. Coming from our side, when we start a project, we obviously know the technology; we know our platform. On the customer side, you know your needs, your particular processes and applications. But we don't always have shared knowledge of each other's domains. That’s where system integrators (like Data Acuity) come into play - they can help bridge that gap to have the right person in place that has a foot in both worlds. They not only have a firm grasp on the technology, but they also understand the applications to the extent that they know what needs to be accomplished and how to make it happen. And not just how to make it happen, but how to make it happen cost effectively, efficiently, and in a way that allows for future growth and expansion of the application. So that's really a key element; you need the right team of people that understand the project needs to ensure the success of any manufacturing efficiency project.  
4. And fourth, it’s important that you and your company are in a position for long-term project ownership. It is essential that you are not dependent upon us or any other vendor. Obviously, we will lend our expertise, when necessary, but our approach is to educate you on how to effectively tackle your own manufacturing efficiency in a way that’s scalable and future proofed. We want to establish the right customer mindset for long-term commitment to grow and evolve your system on your own. 

And as part of any manufacturing efficiency conversation, we’ve learned that we always need to approach the architecting of such systems with care because these projects are not static. They're dynamic. They change over time; they grow over time. And they become long-term relationships, long-term opportunities for our customers to grow their efficiency. So, with that, we’ll look at Overall Equipment Effectiveness.  

Overall Equipment Effectiveness (OEE) 

Let's take a step back and think about the various kinds of automation disciplines that may end up touching a manufacturing efficiency or an automation data collection project. These generally start with something called Overall Equipment Effectiveness (OEE), but these may also involve alarm management, asset management, asset utilization, energy management, labor utilization, product traceability, and genealogy. Additionally, things like maintenance tracking and automation of observation logs can come into play, along with something called poke yoke, which is a standard operating procedure associated with quality control. So, during the lifetime of a project, there are a whole bunch of different disciplines that may be involved. But let’s focus on OEE because that tends to be the metric, the key performance indicator, that allows us to focus our limited resources on the areas that potentially have the greatest gain. OEE can tell us where to make an investment, where to allocate our resources to improve the process efficiency as much as we possibly can.  

The Three Buckets of OEE: Availability, Performance, & Quality 

As a metric, OEE provides a clear understanding of the difference between the quantity of sellable product an asset could make versus the actual amount of product that asset made. The key insight that we're looking to gain from this metric is a full understanding of which resources we should assign to which priority problems. OEE is a top-level measurement of efficiency, and it breaks down into three separate buckets. These three buckets are availability, performance, and quality. Availability gives us a measurement of the amount of time an asset was operating compared to the amount of time the asset was scheduled to be operating. This does not account for the time that the asset was scheduled to not be operating, for example, on a Sunday. Performance gives us a measurement of the amount of product the asset actually produced during the operating time compared to the ideal amount of product that that asset could have produced. Quality gives us a measurement of the good product versus the bad product, but only for the product actually produced. Drilling into these three buckets allows us to quickly analyze the true nature of the loss of efficiency and to take concrete steps at improving efficiency. However, there is another bucket that is critical to OEE.  

Another Bucket Critical to OEE: Loss Deployment 

Another metric often overlooked, but critical to making gains in efficiency is loss deployment, which unlike OEE, considers factors beyond the machine’s operation. For instance, if we made a calculation that we can produce 500 bottles of oil per day, but we only produce 300, where did those 200 bottles go? Loss deployment as a metric includes OEE, but it gives us much greater insight into the true loss of efficiency. For loss deployment, we’ll start by figuring out what is the total amount of product we could make in an ideal situation 24/7/365 with no loss of efficiency. From there, we’ll go to the following five buckets: 

1. The first bucket is the amount of product which is how much sellable product we actually made. 
2. The second bucket is the loss of efficiency that can be attributed as the fault of the machine itself or the asset itself. 
3. The third bucket is the loss of efficiency that can be attributed to the process around the asset, for example, “waiting for’s” (waiting for material, waiting for operators, waiting for instructions and so on). 
4. The next bucket is the loss of efficiency that is attributed to required actions. For example, preventative maintenance is required, but it does cost us efficiency. A cleanout or a changeover is required, but it does cost us efficiency.  
5. And the final bucket is the loss in efficiency that was intentional. For example, we've scheduled the line not to run on a Sunday, or we've scheduled not to run the line during a break time. 

As indicated, the metric loss deployment fully includes OEE, but this additional bucket gives even greater insight into the potential loss of efficiency and can more clearly guide you towards those magical gains you’re looking for.  

OEE Use Case - Catania Oils Manufacturing Efficiency Project 

Located in Massachusetts, USA, Catania Oils is a family-owned producer of conventional, non-GMO Project verified and organic oils (like olive oil, canola oil, and avocado oil) to the ingredients, foodservice, and retail markets. The company wanted to identify potential efficiency gains by leveraging the ICONICS tool set and the expertise of system integrator Data Acuity. Dan Bracket, Vice President of Operations at Catania Oils explains,  

“The first thing we were looking to do was to determine how many cases per minute we were producing, so that we could determine the efficiency of our lines, and that led us to ICONICS and to Data Acuity to better zero in on that information. We collect data regularly through ICONICS. We get data from every line, from every product, and from every shift, and that data is accumulated in the database and a report comes out every day for us to be able to determine how each one of those lines is running.”  

With 30 years of experience deploying automation systems, President of Data Acuity Jim Desrosiers knew not to focus on a single machine fault or quality defect when approaching this manufacturing efficiency project but to focus on the process as a whole. This approach provided valuable insight that allowed Catania Oils to capitalize on even greater efficiency gains over the course of the project. 

The Right Approach & Team Provide Gains in Manufacturing Efficiency 

Achieving gains in manufacturing efficiency is real and tangible with the right approach and team. ICONICS and system integrator Data Acuity have the expertise, experience, and partnership longevity to guide you and your company through a successful project. Stay tuned for part two of this blog series which will cover how to achieve predictive awareness in manufacturing efficiency. However, if you don’t want to wait, you can jump directly into learning how by watching ICONICS Transform 360 webcast “Achieving Magical Gains in Manufacturing Efficiency”. ICONICS Solution Sales Engineering Supervisor Jotham Kildea and Data Acuity President Jim Desrosiers go over this and also cover how to use OEE and loss deployment to improve your manufacturing operational efficiency. Great stuff all round!