We have stated that policies and procedures will have an impact on your OEE implementation strategy. One reader commented on Part I of this post stating that “OEE should be measured at the ‘design’ bottleneck process / piece of equipment that sets the pace of the line.” While this is certainly an effective approach, the question is whether or not company policy or procedure supports the measurement of OEE in this manner. Nothing is as simple as it looks. Take this to the boardroom and see what kind of response you get. We’re flexible.
As such, this becomes yet another consideration for what is being measured, how the data going to be used, and what is the significance of the results. While we didn’t elude to a multi-series post, the comment was indeed timely. The risk of not understanding the data could result in other inefficiencies that are built into the process that could mask either upstream or downstream disruptions.
Inventory – Hiding Opportunities
Whenever we think of the “bottleneck”, we instantly turn to the Theory of Constraints. The objective is to ensure that the bottleneck operation is performing as required – no disruptions. In many cases, process engineers will anticipate the bottleneck and incorporate buffers or safety stock into the process to minimize the effect of any potential process disruptions.
On one hand, the inventory, whether in the form of off-line storage or internalized, by using a buffer (or part queue), will in essence minimize or eliminate the effects of external disruptions. On the other hand, there is a premium to be paid to carry the excess inventory as well.
While buffers or part queue’s can serve as a visual indicator of how well the process is performing, assuming the method used to calculate the queue quantities is correct, our previous post was eluding to the fact that many manufacturers incorporate contingency strategies into the process after the fact such as inventory that was not part of the original process design or reworking product on line.
Incorporating a rework station as part of the manufacturing process because the tooling or equipment is not capable of producing a quality part at rate may eventually be absorbed as part of the “normal” or standard operating procedure. As such, it is important to manage standardized operating procedures in conjunction with Value Stream Maps to avoid degradation from the base line process.
OEE can serve as an isolated diagnostic tool and as a metric to monitor and manage your overall operation. Company policy should consider how OEE is to be applied. While most companies manage OEE for all processes, they are typically managed individually. Many companies also calculate weighted department, plant, and customer driven OEE indices.
Regardless of the OEE index reported, it is important to understand the complexities introduced by product mix and volumes when considering the use of a weighted OEE index. The variability of the individual OEE factors compounds the understanding of the net OEE index even more.
We have provided FREE Files for you to download and use at your convenience. A detailed discussion is also provided in our OEE tutorial. See the “FREE Files” BOX on the sidebar.
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Until next time, STAY – lean!