Manufacturing journalist TR Cutler profiles the OEE Calculator

Manufacturing journalist, TR Cutler, recently profiled the OEE Calculator by Memex Automation for Industrial Electronics Today.

The leading OEE (overall equipment effectiveness) Calculator, quantifies the increase in Income From Operations (IFO or EBITDA) for Same Sales Volume and Sell Everything scenarios for various improvement criteria. The OEE ROI calculator is a very preliminary ‘rough cut’ analysis tool for developing a business case (to engage real-time manufacturing performance data for shop floor machines in manufacturing plants). Part of the reason Calculator is ‘rough’ is because a Plant average is used for several important parameters such as OEE, shift output, and quality rate.

Much greater precision can be developed by using actual OEE data differentiated by product run and by work station. Future monitoring and proactive use of the information provided by an installed system significantly improves accuracy of alternatives; these data assists leadership teams in setting direction and focus to maximize results quickly. Rattray noted that, “First Look results are generated using Small, Medium and Large preselected productivity improvements to show the range of possible results.”

The current input values in the OEE Calculator, use hypothetical but realistic values for a machine tool plant. It is estimated that for most manufacturing plants, the Calculator results have a confidence level of eighty-five percent (85%), plus or minus three percent (3%.)

The OEE Calculator does not apply the Theory of Constraints (TOC) therefore, if the proper application of tools and OEE improvement is not achieved at the constraint, then the increase to IFO is also limited. The quality factor usually has more impact than Availability or Speed Factor for bottom line improvement. When waste or scrap is improved, OEE improves; the result, less material needed. It is important to apply Lean Six Sigma techniques to your manufacturing operations, so as to achieve significant results. Memex offers services in this area, as documented in our website.

Memex suggests that users of the OEE Calculator, “Closely account for the change in material since it determines the new amount of total units made and applies the base case unit material cost to the total number of new units required to make the good units for the associated scenario.” The Calculator zeroes all of the improvement parameters and individually examines what one (1) OEE point improvement is worth for Availability, Speed Rate, and Quality. This data provides the user an approximation of financial impact on IFO for types of improvement activities.

Memex Automation Talks Benefits of Automated Approach

Originally published online by SBW!RE.  Link to full article here.

Memex understands the need to be more competitive and get the maximum throughput with your machine assets in manufacturing. To be able to “visualize” how your machines are operating allows customers to react quickly to situations. Measuring what actually happens on the shop floor allows manufacturing and industry leaders to tune processes using lean manufacturing techniques. Apply the Theory of Constraints principle by monitoring and identifying a constraint. Improve operator productivity and satisfaction by helping them perform faster and reduce their data collection overhead using automatic and accurate tracking systems. OEE – Overall Equipment Effectiveness is the key performance indicator that drives this machine monitoring process.

“OEE is a Manufacturing Productivity Tool for Real-Time Monitoring enabling Increased Productivity,” according to John Rattray, of Memex Automation. “By monitoring assets such as tooling, raw materials, Work In Progress, computers, vehicles and any moveable assets, companies can know quickly, exactly, and securely where assets are located. Ultimately this is an automated approach because we measure the shop floor allowing our customers to manage the top floor.”

This automated approach provides the following:

  • Automated data collection from machine
  • Accurate and objective information
  • Not reliant on operator
  • Down Time Log – detailed to the second reporting all down time with reason codes
  • Historical data from analysis
  • Visibility of machine performance in real-time
  • Proactive alerts rather than reactive
  • Leading OEE Metrics, automatically
  • Minimize “Cultural Impact” on operations
  • 20% of cost of PLC based solutions
  • No need for Barcode scanning (optional)
  • Connect to any machine
  • Supports OPC standards
  • Supports MTConnect standards (serve data from machine to the consumer application)
  • Event monitoring
  • Send job/shift completion results automatically back to ERP/MES

Many sectors are represented in the Memex customer roster, including:

  • Aerospace – Boeing, Goodrich, Dowty, Parker Hannifin, Héroux Devtek
  • Automotive – GM, Ford, Magna, Eaton, Linamar
  • Industrial – Caterpillar, John Deere, Westinghouse, Vickers, Case, Sanmina
  • Government – National Research Council, Jet Propulsion Laboratories,
  • The Royal Canadian Mint