operations manager decided to have one crew be the pilot crew that would go through the workshop and develop a best practice methodology. This approach proved to be more complex than expected. The area worked with approximately 130 different products, using 35 different processes. Many crews worked with more of one combination than another. Therefore, a typical changeover really did not exist.
In the workshop, the pilot crew categorized changeovers. They initiated improvements that reduced the majority of their changeover times by 40 percent. At the end of the pilot period they presented the results to the product line superintendent. Although they were proud to receive the superintendent’s congratulations, they were shocked when he directed them to teach their methods to the other crews. They had not anticipated this directive, and felt that their reward was more work, beyond the original scope of the workshop. As a pilot crew, they synergistically made improvements, however other crews did not readily accept ‘outside’ ideas and passively committed to new methods. Thus, the improvement methods took much longer to be accepted by the other crews.
What actions would have been better? Proactive leadership would have led to faster results. When the operations manager initiated the request for improvement, he should have confirmed the efforts were supported by the superintendent and then communicated this to all crews. The overall objective should have been outlined with the strategy of how a pilot crew would be selected from volunteers, that this crew would make recommendations for best practices, and that all crews were expected to adapt these methods into their changeovers. If the results of the improvement were visible to the crews, and a system was developed to reward the community when the average changeover improved, then the methods would have been implemented quickly. The superintendent should have invested three or four hours of proactive leadership, earning the support of all the crews. By clearly communicating the desired goal and the expectation that everyone will help implement improved work practices, proactive leadership would provide the community with a common vision. This style of leadership and communication open the way for rapid implementation and sustain improved practices.
Proactive leadership is a vital part of developing work place improvements. It can start at any level of the organization. As objectives are selected, approval should be solicited from the area leadership team to clear the way for rapid success. This book should provide the tools to generate compelling programs for higher effectiveness
1.5 Moving the Community to Improved Performance
Having an effective factory is not the only requirement of a successful business. Many other factors are also important. Which way is the economy going to move? Will the competition cut prices? Is the product in demand? Will the product evolve into another? What are the distribution channels for the product? Should the source of supply be in one place or several? World-class companies continually address these and other questions as they shape and modify their business plans.
World-class companies are known for another attribute. They are built around the concept that an effective factory producing “good goods” as needed to meet market demands is a valuable asset for any company to have. This attribute is maintained both short and long term. One of the main metrics used to identify world-class companies addresses how effectively factories run their processes when scheduled to run. OEE is designed to provide this number. Yet most factories do not compute OEE or use it to set and maintain their priorities. OEE is the product of availability (actual run time vs. scheduled time) times speed rate (actual rate vs. ideal speed rate) times quality rate (good product vs. total product). These parameters are defined in section 2.1. A second metric examines how effectively do factories run their processes relative to the total calendar time. This metric, Total Effectiveness Equipment Performance or TEEP, will be discussed in section 1.6.
All manufacturing processes have some kind of constraint. Factories often subdivide product manufacturing into several steps, using inventories or queues between steps. When factory resources are shared, or used in multiple ways, the manufacturing process grows in complexity. The constraint for one product is often different than for other products. The Constraint Management Handbook6 is a good reference for understanding and operating the vital steps of manufacturing lines and multiple product orders.
OEE should first be applied to the bottlenecks that affect throughput or any other critical and costly areas of a manufacturing line. These areas, so vital in making a plant effective, make a significant difference to the company when driven successfully. OEE is beneficial for every step of the process, however, non-bottleneck steps should be subordinated to bottleneck steps.
Effectively moving a community toward an OEE mindset starts with a company-wide education program that is driven top down. The plant management team must first identify the hierarchy of bottlenecks. Then setting expectations and communicating them to the plant employees launches the initiative for a successful change. OEE should work synergistically with the financial information for each product. When OEE is used by management as the key metric for a factory’s vital points, and each person’s performance appraisal is linked to improving the metric, an effective factory evolves quickly.
True OEE multiplies factors that represent availability, speed, and quality. The result can be expressed as a percentage of effectiveness that directly correlates with actual factory floor output, and can be reconciled 100 percent. This will be demonstrated in the Case Study that follows.
Understanding the correlation concept is key to having a single metric that has credibility with the production, maintenance, engineering, management, and financial areas.
OEE can be generated easily and accurately; it can quickly demonstrate the size of the hidden factory in your specific area. In turn, the plant leadership team can apply people and resources to the proper locations for the fastest improvement.
Chapter 2 will provide a practice example including recommended definitions, a sample production period, and a total range of incidents. In developing the OEE formulas, it will demonstrate that the three different approaches provide exactly the same OEE. Even areas without detailed data collection can still use the simplest method to calculate an accurate OEE.
All manufacturing areas should be able to answer the following questions for each product:
1.How many units that meet specifications were made and transferred to the next step?
2.How much time was scheduled for production of that product?
3.What is the ideal or best theoretical cycle time or throughput for units of that product? (If this were unknown, a rough approximation would be to use the speed value generated by the best 4 hours of the last 400 hours.)
With this information, the simplified calculation shown in section 2.5 can generate an accurate OEE for each product. Prorating the individual product’s OEE can generate a combined OEE for the area. I recommend prorating by the percentage of production schedule time used to make specific products. Even areas with good data collection should reconcile OEE by using the simplified method. All methods should reconcile. If they do not, assume the lowest value is correct and that the other methods have overlooked an area of opportunity. Remember, true OEE directly correlates to area output.
After analyzing all major processes and important equipment systems for each plant site, summarize the results from each area as follows: