Tag: Training and OEE

OEE For Manufacturing

We are often asked what companies (or types of companies) are using OEE as part of their daily operations.  While our focus has been primarily in the automotive industry, we are highly encouraged by the level of integration deployed in the Semiconductor Industry.  We have found an excellent article that describes how OEE among other metrics is being used to sustain and improve performance in the semiconductor industry.

Somehow it is not surprising to learn the semiconductor industry has established a high level of OEE integration in their operations.  Perhaps this is the reason why electronics continue to improve at such a rapid pace in both technology and price.

To get a better understanding of how the semiconductor industry has integrated OEE and other related metrics into their operational strategy, click here.

The article clearly presents a concise hierarchy of metrics (including OEE) typically used in operations and includes their interactions and dependencies.  The semiconductor industry serves as a great benchmark for OEE integration and how it is used as powerful tool to improve operations.

While we have reviewed some articles that describe OEE as an over rated metric, we believe that the proof of wisdom is in the result.  The semiconductor industry is exemplary in this regard.  It is clear that electronics industry “gets it”.

As we have mentioned in many of our previous posts, OEE should not be an isolated metric.  While it can be assessed and reviewed independently, it is important to understand the effect on the system and organization as a whole.

We appreciate your feedback.  Please feel free to leave us a comment or send us an e-mail with your suggestions to leanexecution@gmail.com

Until Next Time – STAY lean!

OEE for Batch Processes

Coke being pushed into a quenching car, Hanna ...
Image via Wikipedia

We recently received an e-mail regarding OEE calculations for batch processes and more specifically the effect on down stream equipment that is directly dependent (perhaps integrated) on the batch process.  While the inquiry was specifically related to the printing industry, batch processing is found throughout manufacturing. Our more recent experiences pertain to heat treating operations where parts are loaded into a stationary fixed-load oven as opposed to a continuous belt process.

Batch processing will inherently cause directly integrated downstream equipment (such as cooling, quenching, or coating processes) to be idle. In many cases it doesn’t make sense to measure the OEE of each co-dependent piece of equipment that are part of the same line or process. Unless there is a strong case otherwise, it may be better to de-integrate or de-couple subsequent downstream processes.

Batch processing presents a myriad of challenges for line balancing, batch sizes, and capacity management in general.  We presented two articles in April 2009 that addressed the topic of  where OEE should be measured.  Click here for Part I or Click  here for Part II.

Scheduling Concerns – Theory of Constraints

Ideally, we want to measure OEE at the bottleneck operation.  When we apply the Theory of Constraints to our production process, we can assure that the flow of material is optimized through the whole system.  The key of course is to make sure that we have correctly identified the bottleneck operation.  In many cases this is the batch process.

While we are often challenged to balance our production operations, the real goal is to create a schedule that can be driven by demand.  Rather than build excess inventories of parts that aren’t required, we want to be able to synchronize our operations to produce on demand and as required to keep the bottleneck operation running.  Build only what is necessary:  the right part, the right quantity, at the right time.

Through my own experience, I have realized the greatest successes using the Theory of Constraints to establish our material flows and production scheduling strategy for batch processes.  Although an in-depth discussion is beyond the scope of this article, I highly recommend reading the following books that convey the concepts and application through a well written and uniquely entertaining style:

  1. In his book “The Goal“, Dr. Eliyahu A. Goldratt presents a unique story of a troubled plant and the steps they took to turn the operation around.
  2. Another book titled “Velocity“, from the AGI-Goldratt Institute and Jeff Cox also demonstrates how the Theory of Constraints and Lean Six Sigma can work together to bring operations to all new level of performance, efficiency, and effectiveness.

I am fond of the “fable” based story line presented by these books as it is allows you to create an image of the operation in your own mind while maintaining an objective view.  The analogies and references used in these books also serve as excellent instruction aids that can be used when teaching your own teams how the Theory of Constraints work.  We can quickly realize that the companies presented in either of the above books are not much different from our own.  As such, we are quickly pulled into the story to see what happens and how the journey unfolds as the story unfolds.

Please leave your comments regarding this or other topics.  We appreciate your feedback.  Also, remember to get your free OEE spreadsheets.  See our free downloads page or click on the file you want from the “Orange” box file on the sidebar.

Until Next Time – STAY lean!

Vergence AnalyticsVergence Analytics

OEE: Frequently Asked Questions

We added a new page to our site to address some of the more frequently asked questions (FAQ’s) we receive regarding OEE.  We trust you will find this information to be of interest as you move forward on your lean journey.  We always appreciate your feedback, so feel free to leave us a comment or send an e-mail directly to LeanExecution@gmail.com or Vergence.Consulting@gmail.com

We have had an incredibly busy summer as more companies are pursuing lean manufacturing practices to improve their performance.  OEE has certainly been one of the core topics of discussion.  We have found that more companies are placing a significant emphasis on Actual versus Planned performance.  It would seem that we are finally starting to realize that we can introduce a system of accountability that leads to improvements rather than reprimands.

Keep Your Data CLEAN

One of the debates we recently encountered was quantity versus time driven performance data when looking at OEE data.  The argument was made that employees can relate more readily to quantities than time.  We would challenge this as a matter of training and the terminology used by operations personnel when discussing performance.  We recommend using and maintaining a time based calculation for all OEE calculations.  Employees are more than aware of the value of their time and will make every effort to make sure that they get paid for their time served.

Why are we so sure of this?  Most direct labour personnel are paid an hourly rate.  Make one error on their pay or forget to pay their overtime and they will be standing in line at your office wondering why they didn’t get paid for the TIME they worked.  They will tell you – to the penny – what their pay should have been.  If you are paying a piece rate per part, you can be sure that the employees have already established how many parts per hour they need to produce to achieve their target hourly earnings.

As another point of interest and to maintain consistency throughout the company, be reminded that finance departments establish hourly Labour and Overhead rates to the job functions and machines respectively.  Quite frankly, the quantity of parts produced versus plan doesn’t really translate into money earned or lost.  However, one hour of lost labour and everyone can do the math – to the penny.

When your discussing performance – remember, time is the key.  We have worked in some shops where a machine is scheduled to run 25,000 parts per day while another runs a low volume product or sits idle 2 of the 5 days of the the week.  When it comes right down to the crunch for operations – how many hours did you earn and how many hours did you actually work.

Even after all this discussion we decided it may be an interesting exercise to demonstrate the differences between a model based on time versus one based (seemingly) only on Quantitative data.  We’ll create the spreadsheet and make it available to you when its done!

Remember to take advantage of our free spreadsheet templates.  Simply click on the free files in the sidebar or visit our free downloads page.

We trust you’re enjoying your summer.

Until Next Time – STAY Lean!

Vergence Business Associates

How to Improve OEE – Any Questions?

Ask any Quality or Engineering manager and they will tell you that measurement systems are valuable tools to identify problems and opportunities.  The measurement system itself is not the answer – it is the data source, the EVIDENCE that drives the questions.  It is a part of the discovery and validation process to confirm the opportunity or problem and the effectiveness of the solutions to resolve it.

A well integrated OEE system should provide the data to answer the questions on everyone’s mind, “What do we need to do to improve?” or “Why aren’t we improving?”  The simple answer is, “We need to fix it.”  Of course the real question may not be, “What do we need to fix?” but, “Why did it break?”

Yes, we will likely have to replace the part(s) that failed to get the line back up and running, but what really caused the failure to occur?  What was the real root cause?  This introductory post to problem solving and root cause analysis will kick start some of the techniques used to solve problems effectively.

The Problem Statement:

The key to effective problem solving starts with identifying the problem to be solved.  This is typically a brief statement describing the problem.  For external concerns, the problem is usually stated in customer terms.

This post presents some simple examples of problems to be solved.  You will quickly discover that defining the problem may not be as simple as it looks.  We will discuss this in more depth in our future posts.

Root Cause Analysis

Identifying the real root cause(s) for the failure is the secret to successful problem solving.  The method you use to arrive at the root cause should allow you to confirm and validate your solution before taking action.  Here is an important point to remember:

Do not confuse symptoms with root causes.  

For example, you are driving down the road and suddenly find yourself struggling to maintain control of your vehicle.  Your expert driving skills allow you to pull over and stop on the side of the road.  You get out of the car and walk around to discover that you have a flat tire.  The flat tire is a symptom – not the root cause.

As luck would have it, a police officer who just happened to be following you in an unmarked car, notices your sudden erratic driving behavior and charges you with recklessness and careless driving.  Since none of the tires on the police car are flat, the officer presumes the condition of your vehicle is the direct result of your poor driving skills and bad habits after many years on the road.  Another point to remember:

Do not jump to conclusions

You, like many people, would argue that your many years of driving provided you with the experience necessary to avert danger.  The officer quickly recognizes that your many years of experience have caused you to lose perspective of the potential hazards of driving.  The officer advises that your driving record shows no record of any tickets or accidents and clearly suggests that you have had very few “experiences” with the law and minimal exposure to poor road conditions.

The officer proceeds to charge you, the operator, because you simply weren’t paying attention to the conditions and potential hazards of the road.  You are given a ticket to serve as a reminder to pay more attention to the road and to be mindful of your driving habits in the future.  Then to add insult to injury, the officer advises you to fix your tire and drive carefully. 

Unforgiving of the circumstances and since quota’s have to be met, the charges stand and you find yourself on your way to court.  As you sit in your vehicle, stunned that you just got a ticket for getting a flat tire, you are conflicted and fuming because the officer blamed you, your poor driving skills, and your bad habits for driving recklessly down the road!  The following tip will help you remember:

Operator Error is not a Root Cause

Many times, management is too quick to attribute the root cause to operator error.

5 WHY Analysis

One of the best methods for identifying the real root cause is the 5-Why approach.  The concept of asking the question “WHY?” five times is quite simple.  In practice though, you will find it may not be that easy.  Why?  Because the wrong answer will lead you through a continuing series of wrong answers that ultimately lead to the wrong conclusion.

There is always more than one answer – Which one is correct?

Referring back to our example of the flat tire, you now need an argument to absolve yourself of any blame for the incident on the highway.  In court, the judge asks, “How you plead to the charges before you?”  You answer, “Not Guilty your honor.”

  1. Why?  While I was driving down the road, I got a flat tire.
  2. Why?  Because all the air ran out of my tire.
  3. Why?  Because there was a hole in it.
  4. Why?  Because the tire didn’t have anti-puncture technology.
  5. Why?  Because the manufacturer didn’t design it properly.

Were it not for my expert driving skills, this situation could have been much worse.  As it was, using my superior driving skills, I successfully managed to maneuver my vehicle, without incident, to the side of the road, averting what could have been a disastrous crash.  Therefore, I request to be completely absolved of any and all wrongful doing and I am filing a class action suit against the tire manufacturer to cover court costs, lost wages, and damages as well as my emotional stress.

Clearly not satisfied, the judge requests you to take a 10 minute break to rethink your case.  On your return to the courtroom, you are prepared to present the following argument:

  1. Why?  While I was driving down the road, I got a flat tire.
  2. Why?  Because all the air ran out of my tire.
  3. Why?  Because there was a hole in it.
  4. Why?  Because there was a nail on the road.
  5. Why?  Because the government refuses to keep the highways clean.

Were it not for my expert driving skills, this situation could have been much worse.  As it was, using my superior driving skills, I successfully managed to maneuver my vehicle, without incident, to the side of the road, averting what could have been a disastrous crash.  Therefore, I am filing a class action suit against the government to cover for court costs, lost wages, and damages as well as my emotional stress.  To resolve this matter quickly, I request that all charges be dropped and I in turn will drop my counter-claim.

The purpose of the above example was to demonstrate how the answer to the question – WHY? – can lead to completely different conclusions.  On one hand we’re ready to sue the tire manufacturer and on the other, we’re ready to take on the government.  If there was indeed a nail on the road, how did it get there?

Don’t Assign Blame

Solving problems and getting to the root cause is not about assigning blame to someone or something.  You can’t blame the government or the tire company for the fact that there was a nail on the road.  It is to easy to assign blame and it happens everywhere, everyday.  Perhaps the nail manufacturer should be sued as well for failing to provide adequate protections should the nail become lost or misplaced.

The question that wasn’t asked is, “Why was the nail on the road?”  The answer may be that it likely fell out of a board or from a truck or trailer that may have been carrying construction materials.  Again, being careful with the answer, we don’t want to come to the conclusion that nails should be banned completely.

On the other hand, it may be worthwhile to advise that all companies and contractors must make a reasonable effort and take appropriate precautions and measures to ensure that all loads are secure and free from loose raw materials.  Any nails must be placed in a sealed container and secured to the vehicle for the purpose of transport.  A maximum fine of $2,000.00 may be imposed and made payable to the “Operator Error Trust Fund.”

Leading the Witness:  The solution BIAS

STOP! – if you think you already know the answer – Stop!  We know that the right question doesn’t always lead to the right answer as we attempted to show in our example.  Another major pitfall is thinking we already have the answer and we just need to frame the questions and answers to support that conclusion.  This isn’t problem solving, this is creative story telling.  Don’t lead your team into following what “appears” to be a logical conclusion – be prepared to prove it.

Don’t Assume Anything – Follow the EVIDENCE

At a minimum, follow the evidence.  What is the data telling you?  It’s time to start thinking like a crime scene investigator (CSI) or good lawyer.  Asking questions and continuing to probe for answers is the secret to uncovering the less obvious and, more than likely, real solution.

Many OEE equipment / software integrators provide the ability to record and track downtime events in real time.  This data is extremely valuable for trouble shooting and problem solving; however, they are not necessarily root causes.  The integrators provide the capability to readily identify what part of the process failed or what is broken.  While this may be the cause of the line down condition, it is not the root cause of the problem.

Do not confuse the Point of Failure (Source) with the Root Cause

Don’t fall into this trap:

  • Supervisor:  “The OEE system report showed that we lost two hours on the paint line last night.”
  • Maintenance:  “Yeah, I saw the report too.  This OEE system tracks everything!”
  • Supervisor:  “Why did the line go down?”
  • Maintenance:  “The A-Tank feed pump overheated.  The OEE system told us exactly which pump failed.  It saved us a ton of time.”
  • Supervisor:  “What did you do?”
  • Maintenance:  “Oh, we replaced it.  The line is running fine now.”
  • Supervisor:  “OK, that’s good.  Thanks.”

End of conversation.

So, WHY did the pump overheat?  Some questions just never get asked, but I’m sure the OEE will be just fine on the next shift.  We recognize that most effective TPM managers are sharper than this.  Our point is that not everyone is looking at the data from the same perspective.

We’ll discuss “How to Improve OEE” in more detail in our next post:  “How to use the 5 Why Approach.”

Until Next Time – STAY lean!

OEE Integration: Can you fix it?

As we are all aware, inspecting or measuring parts does not change the quality of the product.   Likewise, measuring and reporting OEE alone does not solve problems or improve performance.  While it is fair to say that increased focus and measurement of any process usually results in some degree of improvement, these are typically attributed to changes in human behavior due to observation and not necessarily real process improvements.

Using OEE to identify opportunities in your operation is the equivalent of turning the light on in a dark room.  Although the room hasn’t changed, we certainly have a better understanding of what it looks like.  As such, OEE is a vantage point metric that can be used to illuminate our understanding of the process and identify opportunities to drive improvements.

It is essential for your team to develop and utilize effective problem solving skills to successfully identify systemic and process root causes for failure and to develop and execute permanent corrective actions to resolve them.  Our experience suggests that the lack of solid and proven problem solving skills coupled with poor execution is the leading cause of failure for new initiatives such as OEE.

We introduced an approach to improving OEE in our “Improve OEE:  A Hands On Approach“, post (03-Jan-09).  Although we identified some of the tools that could be used to solve of the problems, we didn’t spend much time going into the details.  Over the next few posts, we’ll discuss some of the ideas in a little more detail.

The real problem for most companies is identifying what the real underlying root cause of the current “failure” mode is.  Without a good understanding of the root cause, the solutions developed and implemented will not be effective, only serving to temporarily cure the immediate superficial symptoms.

Using effective problem solving skills to analyze the OEE data and to develop and execute permanent corrective actions will assure sustainable and ever improving performance.

Until Next Time – STAY lean!

OEE Integration – Part III

The primary components of your OEE infrastructure are People and DATA.  The people are the life of the OEE system, all else is support.  Data collection and management technologies play an important role in the OEE process, however, they are data collection / process / delivery systems that are programmed to provide reports as requested by the people that use the system.

So, now that we have determined that people are the drivers of the system, the core task then is to provide the people with the education and training they need to be an integral part of the OEE process.  Remember, the people ultimately analyze and make sense of the data using a variety of technology solutions.  Your team is also responsible for recommending actions to improve the current processes based on the data.

Training

Trained and qualified personnel are at the core of any initiative and are fundamental to the success of the program in general.  Our recommendation is to ensure that all personnel across the organization, from the shop floor to the executive leadership, understand the principles of OEE and how it will become an integral part of the company culture to sustain and drive continual improvement.

The executive leadership must embrace the concept of OEE and determine the policies and procedures that surround its measurement and support the actions required to execute improvements to the system and processes accordingly.  To this end, we also recommend that the training is performed by personnel within the organization and not necessarily by executive or senior management.

Consultants serve as an excellent resource to facilitate the initial training and to provide the necessary tools or materials to assure its success.  More importantly however, consultants serve as catalyst to facilitate the integration and implementation process.  A consultant would best serve your interests by supporting a “train the trainer” methodology.

Executive and senior management are responsible for defining the policies and procedures of the OEE management process or system.  While OEE goals and objectives may be determined by management in conjunction with the team, or some of its members, the team is ultimately responsible for the development and execution of the action or improvement plans.

For this reason, we recommend that employees are trained by their immediate supervisor, team leader, or each other (peer to peer).  The objective of peer to peer training is to engage all employees in the training process by encouraging each employee to teach a portion or segment of the training module.  Of course this latter approach assumes that you have training materials available to support this activity.

Training with your own staff will affirm the commitment of the company and the employees will appreciate the presence and development of in-house expertise to make the OEE initiative a success.  This approach also assures that ownership remains with the users of the system – the company.  The best way to teach someone is to give them the responsibility to teach others.  Those who assume the responsibility to teach will certainly become better students as well.

This approach may strike you as a protectionist measure to preserve our integrity as consultants.  To the contrary, our objective as consultants is to serve as a catalyst to develop the infrastructure of your organization using a strategy where the system is ultimately self-sustaining and integral to the culture of your operation.

Over the past few posts we have developed a strategy for engaging your teams in the OEE process.  As we have indicated throughout our series, there are a variety of technology solutions available to measure OEE, few however, provide the tools to develop the infrastructure in your organization to make them effective.

We will pursue this strategy further in future posts.

Until Next Time – STAY lean!

OEE Integration – Part II

Training and Integration

Integrating OEE into your organization will take some time.  However, the benefits are definitely worth the effort.  Preparing an effective integration strategy will pay off dividends in the execution phase of your program and can serve as the core theme to launching many of your other lean manufacturing initiatives.

The challenge for many organizations is turning lean metrics, more specifically OEE, into part of the everyday language of the company.  The world of sports provides an excellent analogy to demonstrate how metrics are a necessary and integral part of the games we watch.  Baseball, football, basketball, hockey, cricket, and others all offer statistics or metrics that don’t necessarily determine the outcome of the game but certainly provide insight into the performance of the players and potential of the team.

While it may be a bit much to ask our employees to embrace lean performance metrics like OEE with the same energy and enthusiasm as they may have for sports, we can certainly encourage them by providing them with the education and training they need to better understand these metrics and why it is important to their future and the future of the company.

Defining the Need

It is imperative that you and your employees understand the need for an OEE system before even commencing with any physical implementation strategy.  It is even more critical to define and understand what is being measured and how the measurements will be used to improve your operation or processes.

To be effective, the team must have confidence and trust in the leadership coupled with a firm understanding of the practical intentions of the OEE system.  If employees perceive punitive intentions, you will most certainly lose.  How OEE data is used in your operation or processes will determine how successfully it can be integrated across the entire organization.

Understanding the rules of engagement is the key to making the metrics meaningful and effective.  Educating and training your team is at the very foundation of the lean journey.  Without it, the efforts are sure to fail.  Resistance to change is often fueled by lack of knowledge and understanding.

The VISE – Get the Commitment – Create the Charter

Vision:  We will manage in Real Time using metrics to measure our performance and effective use of capital and human resources;

Intelligence:  We will become students and teacher of our business, training and educating ourselves and each other;

Strategy:  We will develop effective, detailed plans to support our vision, goals, and objectives to be a viable, sustainable, and growing business enterprise;

Execute:  We will execute specific, detailed action plans in a timely and efficient manner, addressing all impediments to assure our success;

WHY:  to drive continual improvement, support our lean initiatives, and eliminate waste in our organization.

Using acronyms can be an effective way to communicate your expectations.  The VISE provides a strategic super-view that is easily embraced by any organization serious about their present and future business prospects.

More on this topic in tomorrow’s post.

Until next time – STAY lean!