Lean Six Sigma

Form an OEE team to maintain optimized capacity

Stanton McGroarty says think strategically about bottlenecks.

By J. Stanton McGroarty, CMRP, CMfgE

The manufacturing world is edging back from a great recession. Customers are placing larger orders on production facilities that have endured four or five years of limited maintenance and reduced staffing. The next phase is bound to be a strain on production capacity while manufacturers wait for cash flow to provide the resources needed to catch up with the new demand. The managers who decided to deplete finished inventory and denied requests for maintenance and reliability projects won’t remember any of that “ancient history.” All they will be able to see is that they are finally bringing in orders and the products aren’t going out the door fast enough to satisfy customers who have also driven their own inventories down to starvation levels.

When production capacity is being strained, bottlenecks appear in the system, constricting production and making life unpleasant for everyone in the plant. The heat gets turned up under production and maintenance teams long before any real help is available. Overall the growing demand is great news, but it doesn’t feel like it on the shop floor.

The organization’s response to the increasingly intense plant environment will determine what kind of summer the reliability, maintenance, and production teams will have this year. Life will be much more pleasant if the teams can find a way to minimize politics and maximize everyone’s focus on the technical details that will get the job done. A surprisingly useful tool for providing this focus is our old friend overall equipment effectiveness (OEE). One of the most widely overlooked strategic advantages of the OEE measurement is its power as a catalyst for teamwork. A second advantage of the OEE approach to ramping up capacity is that it is a natural reporting and improvement tool for use by the reliability group.

OEE is a three-part measure of the percentage production allowed by equipment uptime, throughput rate, and product quality. This means that, for an asset running 70% of the time at 80% of design speed and producing 95% good parts, OEE will be computed like this:
OEE = uptime x throughput x quality
OEE = .70 X .80 X .95 = 53%

Obviously, there is room for improvement.

J. Stanton McGroarty, CMfgE, CMRP, is senior technical editor of Plant Services. He was formerly consulting manager for Strategic Asset Management International (SAMI), where he focused on project management and training for manufacturing, maintenance and reliability engineering. He has more than 30 years of manufacturing and maintenance experience in the automotive, defense, consumer products and process manufacturing industries. He holds a bachelor of science degree in mechanical engineering from the Detroit Institute of Technology and a master’s degree in management from Central Michigan University. He can be reached at smcgroarty@putman.net or check out his .

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A more thorough discussion of OEE is available at http://www.plantservices.com/articles/2009/032/.

When things get hectic on the plant floor, maintenance and production people are often unavailable for cool-headed strategic discussions. But, if the reliability group will perform a quick review of the three elements of OEE, the results will point to solutions that everyone can work on.

Equipment uptime is determined by availability and scheduling, so maintenance, reliability, and production must all contribute. Equipment cycle time is usually set by production but may be driven by maintenance or tooling issues. Quality is a production issue. All three components can be reported daily at first and then weekly, supporting distribution of labor and usually some early signs of progress. This should help cut the politics out of the situation and focus the team’s energy on constructive tasks.

If it is helpful to do so, the reliability group that is providing technical support and scorekeeping can begin speaking in terms of the “OEE team,” or another name if a good one comes to mind. Whatever its name, the team should draw up and maintain follow-up on a list of mini-projects that will solve the bottleneck and restore the production rates needed to satisfy customers. But that isn’t the end.

Now that there’s an OEE team, it should identify the next few bottlenecks that will impede production in the near future. Then it should develop the data needed to repeat the process in the new location. Rest assured that breaking one bottleneck will always produce a second. Moreover, as each bottleneck is broken, reliability must put PdM processes in place to make sure the problems that caused it stay solved. There is plenty of work to go around, but it should proceed in an environment of mutual congratulation for the solutions being developed.

Daily reporting will also help keep management from pulling up flowers to see how the roots are coming. During a summer production crunch, management help should be available on an as-needed basis only. Call it a safety policy.

Read Stanton McGroarty's monthly column, Strategic Maintenance.