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o time seems to be more suitable and apt than today, in the face of stiff competition & globalization, for understanding and implementing cost-reduction & productivity-improvement measures at the shop floor level in any manufacturing set-up to obtain reduced operating costs and increase profits. Although world class machines are available today to produce goods at increased speeds, the overall output from a shop floor does not match the required output speed due to various known & unknown reasons. Two machines with individual efficiencies of 95% may not necessarily give a "combined" efficiency of 95% for instance.

 

Any manufacturing activity – any other activity as well, for that matter – can be grouped broadly into three blocks. Let us take a magnified look at these three blocks.

 

INPUT:
Usually any raw-material or work-in-progress (WIP) material or semi-finished goods that undergoes conversion process. One company may receive basic raw material and produce a finished product. Some other company can receive semi-finished products as input and produce a finished product. Cement, Paint, fertilizers can be examples of first type, where as an automobile, television, batteries can be examples of second type.

 

CONVERSION PROCESS (PRODUCTION): Independent of type of input, it will go thru a "CONVERSION PROCESS" which may be done utilizing one or a series of machines or a combination of machines and manual assembly lines. How complex or simple the "CONVERSION PROCESS" is, depends on end product to be produced and its application.

 

OUTPUT: The end result of conversion process which will be stored for further activities or will be shipped for end usage or sold to consumers.

 

If you ever engage in a discussion with your accounting or purchase staff, they will be extremely sad to inform you that the cost of input materials is beyond their control and they cannot bring it down below certain limits, with their "super negotiation skills working at its best. Continue a conversation with marketing people and they will be equally gloomy to inform you about the stiff competition in market which is forcing them to reduce the "output" price. If input cost is beyond our control and output cost is reducing further to meet market needs, obviously the profit margin reduces (Recall from fundamentals we know that the difference between "output" (say selling) and "input" (say buying) price is the "profit.").

 

With external limitations controlling the 'input" and "output" parameters, the focus shifts on "conversion process" to reduce the production cost, improve efficiency , reduce rejections and minimize or eliminate downtime . Men, Machine & Material (popularly known as 3M) are the three most important parts of any manufacturing set-up and need equal attention to obtain best efficiency and reduce losses. As a part of regular manufacturing activity, many standards, parameters and systems are available to measure the performance of 3Ms.

 

In this article, let us focus on measuring one such important parameter for machines which not only gives an indication of machine efficiency, but also gives all an insight required for exposing various "hidden" issues that will otherwise remain unnoticed. Efficiency of machine is measured using some formulae as shown in Figure-2 and are very common practiced. One of the important limitations of using such formulae is that every measurement "isolates" other measurement. For example, an efficiency report by production department may not give complete insight into maintenance issues. An efficiency report by quality department may not be too much worried about the condition of machines. And an efficiency report by maintenance department will reveal a different story.

 

 

 

Is there a practical & simple method to "combine" & "calculate" all the factors that are involved in producing a product, more effectively and efficiently? Can a single value reflect my "overall" situation?

 

Yes. Overall Equipment Effectiveness or OEE is the answer. It is the most simple and comprehensive parameter that can be measured in any manufacturing set-up independent of its capacity. No special instruments or training is required to measure OEE, which gives a practical insight into various "hidden" issues that can be solved at once to improve productivity and efficiency.

 

This week, to make understanding of OEE more easy and little interesting, we have attached a power point presentation. Go thru each slide and understand various steps involved in measuring OEE. A minimum of six-month is essential to study the trend of various problems and take suitable action.

 

    OEE – POWER POINT PRESENTATION    

 

The power point presentation refers to two examples, obtained from printing & injection molding domain. These are only examples. OEE can be applied to any type of manufacturing set-up.

Open the excel sheet after going thru slide show for better understanding.         

 

 

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