Q&A: Overall equipment effectiveness metrics for real-time visibility

Expert Matthew Littlefield explains how these long-used efficiency measures can support real-time visibility in manufacturing.

Overall equipment effectiveness (OEE) metrics have been used to measure the efficiency of manufacturing operations since the 1960s. In 2013, however, what constitutes an efficient operation goes far beyond how well all the gears and cogs are turning. Manufacturers today must use their software systems -- and the metrics collected by them -- as effectively as their machinery. SeachManufacturingERP recently caught up with Matthew Littlefield, president and principal analyst at Cambridge, Mass.-based LNS Research, to hear his thoughts on using OEE and getting the most out of real-time quality metrics.

Within the context of today's manufacturing industry, what does OEE mean?

Matthew Littlefield: It's a metric that is used pretty broadly across different industries in manufacturing. Machine, discrete, hybrid, process -- all different types [of manufacturers] have a shop floor use for this metric. It's a composite metric [that] looks at different areas and is about much more than just asset availability or production-line efficiency. It also looks at the viability and quality of the products to be manufactured.

How do manufacturers set OEE metrics? Are they determined by industries or by individual manufacturers?

Littlefield: There are different definitions of OEE out there. I think product quality, production line efficiency and asset availability are agreed upon [across industries]. Companies may measure these pieces differently. Within quality, some companies may measure first batch yield, while others measure overall yield.

Production efficiencies can also be measured differently. Some companies look at theoretical maxims in the production line; others may have other standards around what is 100% efficiency. It's the same with assets and asset downtime. Some manufacturers may look at unscheduled downtime, while others measure overall downtime. So there are definitely many differences in how companies measure OEE. Some groups have tried to bring those [measurement standards] together; LNS Research has recommendations on how to use these metrics in different areas.

How do statistical process control (SPC) tools fit into the measurement of OEE metrics?

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Littlefield: Statistical process control takes on a particular parameter, generally. Maybe it's pressure on the production line or volume or temperature -- some type of metric. SPC tracks this [metric] over time and ensures that it's gauged within control. You're grabbing information from several areas of the production process. Since this involves real-time manufacturing data, it very often makes sense to just start measuring these [metrics] holistically. We're now seeing more MES [manufacturing execution system] companies offering OEE modules along with SPC modules.

What is the importance of real-time visibility when it comes to measuring quality metrics in manufacturing?

Littlefield: What is considered real time can vary across industries, but for manufacturing, it really does mean real time. Real time can come down to the second or millisecond in a manufacturing environment. The quicker you react, the more products are maintained within quality targets and the more of the process stays within your control.

What are some of the biggest challenges manufacturers face when trying to leverage OEE and real-time quality metrics?

Littlefield: One of the big challenges that we've seen is rolling OEE out across multiple plants and technology solutions. Very often, companies get bogged down in integration work and lose traction over time. It's about having the right project management in place and having the right technology strategies to roll it out across multiple plants.

Do you have any strategies or best practices to offer manufacturers trying to collect and measure quality metrics?

Littlefield: Try to standardize metrics across different plants so [that] ensuring that the way you measure OEE in one plant is similar to other plants. Another best practice is aligning the right metrics to the right roles. SPC data is great at the operator level; the same with OEE data. At the asset or production-line level, a supervisor or plant manager might want to roll it out to the overall facility. Even above that, at the [vice-presidential] level, you might want to have aggregates. So it's really about making sure you're giving the right details for each role.

The other thing we see companies trying to do is align the operational metrics and the financial metrics. So if your OEE changes from X to Y, you save this amount of money in production. Another best practice is aligning [operational metrics] to the supply chain. Again, OEE looks at the efficiency of an asset, but often doesn't look at whether that asset is producing a product for a customer order. You want to look at it in the context of customer demand, bringing together the plant floor metrics with the customer metrics.

Follow SearchManufacturingERP.com on Twitter @ManufacturingTT.

This was first published in March 2013

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