Close the Productivity Gap with Overall Equipment Effectiveness (OEE)

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1 Close the Productivity Gap with Overall Equipment Effectiveness (OEE) Reduce changeover time, improve supply chain predictability, and enhance quality and throughput

2 The need to act now The imperative to maximize productivity while ensuring product quality and sustainability across the enterprise has never been more critical to stay ahead of the competition. Specifically, you need to aggressively improve your operations to reduce changeover time, improve quality and throughput, drive supply chain predictability, and lower costs. For example, for the bottom-performing 70% of food and beverage (F&B) manufacturers, OEE is 74%. For the topperforming 30% of F&B manufacturers, OEE is 89%, according to a study by Aberdeen Group*. This indicates that top OEE performers earn leader status. According to the same study, the aggregate of all F&B manufacturers OEE is 80%, which leaves a great deal of room for improvement for most companies to produce more with their existing equipment. With today s technology solutions powered by the Industrial Internet, you have the ability to ensure your assets are operating as they should at every step of the process. The good news is you can close this opportunity gap. With today s technology solutions powered by the Industrial Internet, you have the ability to connect disparate data, leverage analytics, and gain visibility into your operations to ensure your assets are operating as they should at every step of the process. OEE can help boost your productivity, drive Operational Excellence, and move toward optimizing your asset performance enabling your business to stay more competitive than ever. * Achieving Operational Excellence in Food & Beverage, Aberdeen Group, July 2015

3 What is OEE? OEE is calculated by first measuring three factors: Availability, Performance, and Quality. OEE, expressed as a percentage, is then calculated by multiplying those three factors together to come up with a number. This number provides the foundation for improvement by allowing the efficiency to be measured against other plant metrics as well as against other industries for benchmarking. OEE is one of the most powerful measurement tools that can be used in an industrial environment. It exposes all manufacturing losses, allowing you to make objective business decisions that improve the performance, capacity, and utilization of your plant assets. Here s a closer look at each of the three factors of OEE: Availability is a manufacturer's actual production time as a percentage of its scheduled production time. Scheduled downtime, for instance, is not included in the scheduled production time, so availability describes only how much of a manufacturer s scheduled production time is being used. Factors causing availability to be less than 100% are usually equipment setup and breakdowns. Performance is a measure of how much finished goods (units, boxes, or bottles) were produced during the actual production time. It s the amount produced as a percentage of the amount expected to be produced when measured against the ideal rate of productivity. Performance is usually affected by reductions in the speed of the equipment as well as stoppages. Quality is the number of good boxes produced as a percentage of the total number of boxes produced. Take for example process losses due to underweight, misshapen, or off-color products, which would all affect quality. OEE, when measured and adopted correctly, allows managers to make effective, accurate, and objective decisions in real time for greater productivity and optimized performance.

4 How can an OEE solution impact my operations? An effectively deployed OEE tracking and reporting solution allows you to track and monitor production and business-driven key performance indicators (KPIs). Utilizing automatically collected data, managers can track downtime, waste, production counts, and user-defined events, and automatically or manually associate events with a specific cause on a real-time basis. By utilizing an integrated S95 data reference model, you can analyze equipment effectiveness based on reasons and details to identify root causes. S95 is the international standard for developing an automated interface between enterprise and control systems. You can summarize and analyze your data in the context of production events such as by equipment, by product, or by personnel (hour, shift, and day) for improvement. Furthermore, events and reasons can be correlated to actual production operations; and based on this data, you can develop reports and dashboards for real-time decisionmaking. With new capabilities like cloud-based software, mobility, and HTML5, managers can respond faster to production events than ever before. Insights into root causes. Contextualized analytics. And powerful reporting. How s that for impact? GE Digital customer increases OEE and saves $300K A well-known food manufacturer faced challenges due to manual reporting, lack of visibility into data, and production inefficiencies. It turned to GE Digital's software to help view real-time production data anytime, anywhere and quickly make adjustments to current production runs. Accurate production data enabled it to identify improvement opportunities and drive the right actions. The result: 10% improvement in OEE over the last seven years, $300K cost savings with production improvements, increased data visibility, and higher efficiency.

5 Accurate OEE starts with the data There are a variety of ways to calculate OEE, but the most efficient and reliable way is to base calculations on automatically collected data as opposed to manually entered information. Manual methods are more prone to operator error and time consuming, and present challenges when it comes to connecting your data for visibility and analytics. In addition, if the data is stored electronically, it s available for further analysis. To make effective use of your manufacturing data, here are a few recommendations: Data should be easily collected, recorded, and transmitted from any source in a reliable, secure, and highly configurable manner. Data collection should be fast. Ideally, the system will reflect efficiency and quality data in real time, so a rapid means of collecting the data is necessary for the information to have the greatest impact. Data must be accurate. This can sometimes be difficult to accomplish, so an effective process should be applied to the practice of collecting data. The power of OEE in the cloud Solutions delivered in the cloud are a growing choice among leading manufacturers, a key reason being the speed at which a solution can be deployed. In fact, cloud-baseds OEE applications can be implemented and deliver value in as little as two to six weeks. Cloud solutions can also scale with your company to support Operational Excellence across all of your factories. These solutions have a very low hardware infrastructure footprint, ultimately lowering TCO of the OEE system. Case in point: Higher competitiveness with OEE The push for profitability New entrants, constant innovation by competitors, and the rising threat of retail brands made it harder than ever to prosper in the soft drink market. To maintain profitability and market share, one soft drink bottler sought operational improvements all along its supply chain. Reliability, predictability, and efficiency Beyond improved operational visibility, the manufacturer sought a strong foundation of reliability and predictability so it could safely use manufacturing performance as an indicator of delivery performance, instead of depending on inventory buffers and warehouse space. When assessing the best way to sustain its position, the company looked in the unlikeliest of places its manufacturing operations. Delivering lineside metrics and analysis that empower operators to manage and respond effectively to process upsets, GE Digital's manufacturing software helped the bottler uncover lost capacity and drive efficiencies. The solution provided root-cause analytics that led to asset and process re-engineering, and deep capability analysis to optimize the company s planning and scheduling activities. Maximized OEE optimizes manufacturing performance By empowering stakeholders across different functions with objective performance data, GE Digital's software helped the manufacturer realize powerful outcomes: Achieved Overall Equipment Effectiveness rates ranging from 85% 95% Reduced inventory buffers on the distribution side of the business; streamlined flows of inbound materials Improved capital planning based on historical analysis of capability

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7 OEE in practice: Turn data into insights faster Faster decisions allow you to optimize your asset performance in real time. Here are the key capabilities to maximize OEE: Correlates disparate types of data Offers flexibility with an open and modular architecture Provides a comprehensive view of OEE Delivers analyses to minimize downtime Production managers need the ability to make dramatic and rapid improvements in their operations profitability and efficiency. Industrial Internet-enabled solutions such as Plant Applications from GE Digital correlates disparate types of data and uses out-of-the-box solutions to display and report on that data in real time. This provides you with relevant manufacturing information you need, when you need it. You need the ability to protect and build upon your existing investments in manufacturing and automation systems. The rise of the Industrial Internet of Things (IIoT) allows for more connectivity and data access than ever before. This means you need a solution built on a platform that enables connectivity to many different kinds of applications for maximum flexibility. Deploying an OEE system on a platform able to handle the data demands of the IIoT will deliver value today while setting up your company for success in the future. Additionally, the capabilities need to be modular, allowing you to add only the modules you need to support your operations. To better utilize your equipment, you need a comprehensive view of OEE rather than just downtime information. A solution with drilldown capabilities to identify and monitor areas for improvement can help you make the right decisions to increase throughput in your operations without adding equipment, people, and material costs. An effective OEE solution can help you minimize scheduled and unscheduled downtime events, reduce waste and rework, and perform root cause analysis. This helps you make data-driven decisions on capital expenditures and process improvement investments. In addition, you can track uptime, downtime, and overall plant and machine efficiency through KPIs. An effective OEE solution should be easy to implement, fast to deliver, and scalable to meet your continuous improvement initiatives in weeks not months.

8 Getting the most out of your assets As you face rising costs for raw materials, energy, and transportation, getting the most out of your assets is evermore critical. You can't improve what you can't measure. OEE solutions have proven to be a key enabler to providing the information you need to take action on equipment bottlenecks, unscheduled downtime, and lost production due to material or resource shortages. These intelligent insights enable you to make smarter, better, and faster decisions to achieve greater productivity from your existing equipment. OEE has enabled many companies to achieve nimble, reliable production, which utilizes their current assets and infrastructure for a competitive edge.

9 Ready to take the next step? Move toward optimizing your asset performance management and driving Operational Excellence. GE Digital's proven technology solutions help consumer goods manufacturers around the world increase equipment utilization rates and drive costs out of manufacturing. And we re ready to help you. Contact us today.

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