By Jens Refflinghaus, Kepner-Tregoe

When it comes to Manufacturing, every little bit of improved productivity can add to your company’s bottom line. Increasing profitability of your manufacturing process begins with maximizing the ROI of your equipment assets.  With capital-intensive processes and ever-increasing pressure from global competition, continuous improvement isn’t a “nice to have” initiative – it is a means of survival.  An effective continuous improvement program to drive sustained competitive advantage needs to include both a consistent means of measurement and a process for driving change through your operations.  In the manufacturing industry, these two components come together in the form of best practices for Overall Equipment Effectiveness (OEE) and Problem Solving.

Overall Equipment Effectiveness is the gold standard measurement for manufacturing productivity, taking into consideration Availability, Performance and Quality to provide a quantitative measurement for the percentage of time your manufacturing equipment is truly operating at optimal performance for your company. 

Availability measures planned and unplanned downtime to tell you when your manufacturing process is stopped vs. running.

Performance measures speed, throughput, small stops and delays to tell you how well your equipment is operating compared to its potential when your manufacturing process is running. 

Quality measures defects in the outputs and rework in the manufacturing process to tell you whether your equipment is producing the products and outputs as intended. 

Together, these three factors provide not only a complete view of how effective your equipment and manufacturing processes are operating, but also provides targeted insight into where constraints, issues and opportunities exist that could potentially be addressed to reach peak performance.  Often what organizations lack is a process to guide their teams on how to convert observations into opportunities and offer recommendations that will change the level of performance.

Problem solving is the process of evaluating the performance of a system in the context of its operating environment, diagnosing issues, assessing impact, developing and prioritizing alternatives into recommendations, implementing changes and re-evaluating performance to assess improvements.  There are a number of standards and methodologies for problem-solving but the most common (and simple) is the Demming Cycle of Plan – Do – Check – Adjust.  All problem-solving methods share the characteristics of being cyclical in nature and heavily reliant on measurement and observation to provide a structured means of assessing performance.  What most problem-solving processes lack however is prescriptive guidance on what to measure and how to assess impact.

Together, OEE and Problem Solving fill in the other’s gaps to provide a nearly complete continuous improvement methodology to support the manufacturing industry.  OEE provides guidance on what to measure and how to assess impact and Problem Solving provides a process framework to turn observations into actions and results. 

The only pieces that are still missing to have a highly effective continuous improvement program are skills and culture to apply the methods within your organization.  This is where Kepner-Tregoe can help.  Whether it is improving your asset performance, product quality or enabling your workforce through training, consulting and facilitation services, KT can help take your Continuous Improvement program to the next level. As industry leaders in problem solving for operations and manufacturing, KT has a track record over more than 50 years helping companies just like yours achieve demonstrated and sustainable results.

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