10 Reasons Why OEE’s Importance Is Soaring Today

10 Reasons Why OEE’s Importance Is Soaring Today

  • 62% of manufacturers who consider analytics and Business Intelligence (BI) extremely valuable/very valuable have adopted OEE as one of their main metrics for measuring manufacturing performance.
  • 58% of manufacturers say it is extremely important/very important to have OEE included on their mobile devices’ dashboards so they can keep production lines running smoothly.
  • 46% of manufacturers say it is extremely/very important to track Overall Equipment Effectiveness (OEE) levels in real-time on a per machine basis to improve production line efficiency.
  • 45% of plastics and rubber products manufacturers are using OEE today to normalize and scale production based on the latest IQMS customer survey.

The number of manufacturers who are relying on analytics and Business Intelligence (BI) to improve production line performance is increasing. In a recent survey IQMS completed of 151 manufacturers, 59% consider analytics and BI as extremely important/very important to their daily operations. The figure increases to 62% when manufacturers who are standardizing their reporting on OEE is taken into account. Knowing availability, performance, and quality at the machine level is providing manufacturers with the data they need to keep production lines running.

Why OEE’s Importance Is Soaring Today

Manufacturing is now a digitally driven business. Manufacturers are adopting analytics and BI to normalize production performance to the machine level, then scale that insight across all manufacturing operations. Our latest IQMS Manufacturing Survey shows manufacturers are on a journey of moving beyond manually-driven metrics to those that are automated based on capturing data and scaling it quickly. All manufacturers begin by evaluating quality using manually-based statistics of scrap, Return Material Authorizations (RMA), Non-Compliance/Corrective Action (NC/CA) and supplier’s inbound quality levels. Manufacturers are becoming more digitally-enabled, capturing and acting on yield rates by machines, and automating the analysis of Engineering Change Orders (ECOs) and standardize on Overall Equipment Effectiveness (OEE).

The following are the ten reasons why OEE’s importance is soaring today:

    1. IQMS survey shows the value of tracking OEE levels in realtime is extremely important46% of manufacturers say it is extremely/very important to track Overall Equipment Effectiveness (OEE) levels in real-time on a per machine basis to improve production line efficiency.
      54% of manufacturers consider increasing OEE accuracy to be extremely important/very important. Our recent IQMS Manufacturing Survey validates the journey manufacturers are on from measuring machine availability, performance, and quality manually to adopting more automated approaches including OEE as a benchmark for stabilizing production performance on the shop floor.
    2. Grow faster by stabilizing machine-level availability, performance, and quality.
      The more predictable production lines are, the greater the accuracy and on-time delivery of customer orders. Improving on-time order performance and achieving more perfect orders drives more sales by creating upsell, cross-sell and reorder opportunities. OEE is now one of the catalysts of new revenue growth in many manufacturers because it can help to create a more stable, predictable production environment.
    3. Tracking OEE over time is the foundation for improving line performance and process quality at the same time.
      In our field work with customers, four dominant goals keep emerging as critical to keeping their businesses growing. These include decreasing costs, improving productivity, increasing quality and increasing production capacity. At IQMS we’re finding these goals lead manufacturers to concentrate on line performance process quality. The roadmap below illustrates how OEE is helping manufacturers to achieve their organizational goals by providing measurable business outcomes.IQMS How to Improve OEE Roadmap
    4. Steps to improve line performance and process quality need to happen every day, and OEE is the data fuel that makes achieving that goal possible.
      The roadmap shown in step 3 needs fuel to make it work. OEE is the data fuel or energy that propels manufacturers to improve line performance and process quality gains. Further, manufacturers are now looking at the Cost of Quality’s implications on monthly financial performance to the machine level in the hope of further optimizing production line performance.
    5. Improving production line performance using OEE leads to quality gains that deliver more revenue. Tying back OEE performance to business gains and outcomes improves product quality. And the higher the product quality being achieved on a daily basis, the lower the scrap, product rework, and RMA costs. Making a solid connection between improving OEE performance and seeing improved business outcomes is an excellent way to kickstart more revenue growth.
    6. The era of intelligent machines is here. Manufacturing machinery and assets have had sensors for heat, vibration, throughput, and in the case of integrated chip production, quality levels for years. What’s changing fast is the pace of innovation on analytics and BI platforms capable of making the most of real-time monitoring. OEE is one of several manufacturing metrics seeing increasing adoption based on higher quality data from real-time monitoring across shop floors.
    7. Competitors are building manufacturing plants capable of fully automated or lights-out manufacturing, relying on OEE as shop floor guard rails.
      Every manufacturer competes globally every day against competitors who are either chasing the lowest labor costs or brightest minds around the world. Manufacturers who excel at time-to-market are chasing the latter, brilliant minds because intelligence can scale into fully automated or lights-out manufacturing. OEE is one of the main guardrails keeping advanced manufacturing running efficiently, delivering orders on time and synchronizing production across the shop floor.
    8. Mobile apps built on ERP platforms are proliferating across the shop floor, giving production managers flexibility and insight for fine-tuning production daily.
      OEE is becoming the metric of choice for production engineering, manufacturing production management, operations management and senior management teams who want to know how each machine’s availability, performance, and quality impacts growth. Mobile ERP apps built on a single database architecture as IQMS’ flagship suite EnterpriseIQ Version 16 is providing real-time data from every machine on a production line. At IQMS we’re going a step further and providing time series results by the calendar year and month, which is invaluable for finding trends in each OEE component’s value over time. An example of a customer IQMS dashboard providing real-time OEE results is shown below.
      IQMS Business intelligence and OEE dashboard
    9. OEE is gaining adoption because it is one of the more trusted metrics that gets generated directly from shop floor data.
      Keeping OEE from getting too skewed by removing it from compensation and bonus plans and resolving to keep it out of any potential performance reviews. OEE adoption is flourishing because it delivers results and can be used to reinforce cooperation and collaboration across the shop floor to the top floor. Make it a metric of shared ownership of machine performance, and it will pay off.
    10. OEE gives manufacturers the insight to prioritize production operations for the greatest return.
      Combining OEE across production lines on a single dashboard enables real-time monitoring that accelerates machine, production line, and plant performance gains. Having his level of visibility further accelerates line performance and process quality gains.

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This article was written by
Louis Columbus

Louis is currently serving as Principal, IQMS. Previous positions include Director Product Management at Ingram Cloud, Vice President Marketing at iBASEt, Plex Systems, Senior Analyst at AMR Research (now Gartner), marketing and business development at SaaS start-ups. Mr. Columbus’ academic background includes an MBA from Pepperdine University and the Strategic Marketing Management and Digital Marketing Programs at Stanford University Graduate School of Business. Louis also teaches MBA courses in international business, global competitive strategies, international market research, strategic planning and market research. Mr. Columbus currently is a member of the faculty at Webster University and has taught California State University, Fullerton: University of California, Irvine & Marymount University.