Tracking Overall Equipment Effectiveness

March 18, 2012

Tracking overall equipment effectiveness_3.9.12.jpgThe main purpose of tracking overall equipment effectiveness (OEE), according to Pete Hock, senior director, continuous improvement, ConAgra Foods, Inc., is to inform and direct a company's continuous improvement efforts. Hock and Paul Dash, plant director, Inventure Foods, Inc., gave a joint presentation on OEE in Snack Food Operations, during a breakout education session Saturday morning.

Impacting OEE are events that Hock called OEE losses. These include planned and unplanned downtime, target defects, initiative delivery, and quality defects. He said that companies should measure all losses that can occur, but later noted that the most expensive areas of loss are in unplanned downtime.

When asked how a company should determine the target rate for a line, Hock clarified that determining target rates should be SKU specific. â�?��?You need to identify the best sustainable rate for each SKU,â�?� he said.

Hock also provided OEE calculations, explaining that OEE equals good units produced divided by potential units, or he also expressed it as good units produced divided by scheduled time times the target rate. Lastly, he used the formula OEE equals availability times performance rate times quality rate.

One of the final slides in the presentation talked about the OEE journey, showing a company that improved its net good production from 50% to 70% and then to 85%. Hock said companies operating in the 50% range are not sustaining processes. They may talk about picking the low-hanging fruit to improve the OEE, he said, but too often because they don't sustain these efforts, the fruit grows back.

Hock also pointed out that OEE fits in with any school of thought for continuous improvement whether that is Six Sigma, Lean Manufacturing or other programs. When talking about how to implement an OEE measurement process, he noted that companies have to evaluate the data they collect and use that information to correct actions.

Dash said plant managers must realize that an OEE can start with just one packaging machine, and that companies don't have to begin this by tracking every piece of equipment.