When you are looking at your factories’ overhead you need to take into account what your Overall equipment effectiveness (OEE) is. This is a very vital and important point in the manufacturing world. The OEE is the very metric that will tell you how lean your manufacturing really is. A great resource for better understanding OEE can be found here – https://spruiktec.com/oee-performance/. To measure it and see how you are performing you need to take into account three things. These things are availability, performance, and quality.
The availability of something is how often you’re running 100% of the uptime. This means that all machines and people are working all of the time and there aren’t any unscheduled shutdowns. This could be improved by better machine maintenance and management of the people themselves. However, if you don’t know what your availability is, this could be dangerously cutting into your bottom line. Running a lean manufacturing facility that has a 100% availability is critical when you are in it for a profit.
Performance
Your performance is also something that needs to be considered when you are looking at the OEE of your facility. Are your cycles on the machines optimized? If you can just shave off a second or two from each of the steps that are being performed, overall, that could mean a lot of saved time and money. Every second really does count, add them up and see for yourself. Optimizing the steps in a process are key to keeping your overhead down to a min. Slow cycles and stops can really add a lot of unnecessary time to the overall result. This can eat into profits and hurt the company financially.
Quality
Quality is the last step in the OEE that should be looked at as well. Sure, if you shave time off of the steps, it saves the company valuable money but if it means a compromise on the quality, then you are not winning. Be sure when you are looking to improve the metrics of any of these steps that you are maintaining proper quality at the same time. Your quality department should know the numbers of reworked and rejected components and products. This is usually one of the easiest numbers to find and control. The others can be a bit more of a challenge for business owners to get a good grasp on.
The OEE takes into consideration all three of these things to come up with a number that is out of 100%. If your business has 100% that means that you are running 100% of the time when you should and performing well. Most companies do not get 100%, which is okay too. The idea is to get a grasp on what your numbers look like so you can work on the improvements that your company will need. When there is room for improvement, striving to get that improvement is the end goal. You want your company to have as close to 100% as you possibly can to have the very best profits coming from your business.