Labor: An Overlooked Lever for OEE Improvement

Overall Equipment Effectiveness (OEE) is the gold standard efficiency metric for any manufacturing facility, whether you are turning gluten into baked goods or titanium alloy into airplane parts. OEE measures the productive utilization of each work-center against its total max capacity. In this way, it is the north star for any operations improvement effort and the bedrock of Lean Manufacturing principles.?

In this article, let’s break down:

• The 3 components of OEE and the top 2 sources of downtime in each (i.e., the Lean Six Big Losses)
• A often overlooked lever to improve OEE - Labor

3 Key Components of OEE

OEE is a simple multiplication of three components:?

Availability x Performance x Quality = Overall Equipment Effectiveness?

Before we dive into each, let’s take a moment to understand at a high level how they come together.?

• Availability. What percent of the time was the work center running when the factory lights were on? Availability = Run Time / Planned Time?
• Performance. What percent of the time was the work center producing parts when it was running? Performance = Net Run Time / Run Time
• Quality. What percent of the time was the work center producing non-scrap parts when it was producing parts? Quality = Productive Run Time / Net Run Time

While this may seem overwhelming at first glance, you’ll notice that the inner numerators and denominators cancel out to give us Productive Run Time / Planned Time, which is a simple metric of efficiency.?

By breaking it down, we can isolate root causes and can prioritize improvements and kaizens (Lean continuous improvements) appropriately. See below for an illustrative breakdown.

Availability

Availability evaluates how long the machine or work-center is up and running. Lean Manufacturing offers two major sources of downtime:?(1) Unplanned Downtime and (2) Set-up and Adjustments.?

1. Unplanned Downtime: often occurs when the machine breaks down. Preventative Maintenance (PM) and routine check-ups are paramount to reducing downtime. An additional factor that is often overlooked is tardy or inconsistent staff. If a machine operator comes into work 30 minutes late every day, that’s 30 minutes of loss from the start.
2. Set-up and Adjustments: are what take place in between production runs. A single work center can process several, if not dozens, of stock keeping units (SKUs). Each product may require a different tool holder, spindle speed, or feed rate. Changing over from one SKU to another may take anywhere from a few minutes to several hours. In a high mix facility, this will be the single largest factor driving OEE loss. Training a new operator to get up to speed with your facility’s tools can take 6-18 months – Worker training and retention is crucial to having fast changeovers.

Performance

Performance tells us how efficient the machine and operator are working in conjunction. According to Lean, the top two sources of loss here are:?(1) Small Stops?and (2) Slow Cycles

1. Small Stops: refers to the time in between each unit. This can also be caused by faulty machinery as well as simple blockages or jams. In addition, untrained operators may be slower to feed material into the machine. The importance of high quality, well-trained labor is vital to minimizing small stops.
2. Slow Cycles: is often the result of wear and tear on the machinery and tooling over time. This problem is typically tackled by manufacturing and design engineers, rather than the on the floor operations teams. However, well trained operators can spot these issues quickly and report when tools are blunt or machines have chatter.

Quality

Quality is a measure of total good products over products made. Given that the same product takes the same machine time to produce, this is the equivalent to dividing total productive time over total run time. The top two losses here are: (1) Startup Defects?and (2) Process Defects

1. Startup Defects: occur in the initial part of a new production batch until we get a first ‘good part’. These defects can be attributed to old machinery, poor process and insufficient warm-up times. Though design and machine maintenance can drive improvements, these are often a necessary evil to make sure the production run goes smoothly.?
2. Process Defects: refer to any and all scrap that is produced during the production run. A large driver here is talent. Talented operators can identify misaligned tool holders in the machine, or wear and tear on a tooltip, to make sure that the machine is not producing output that gets red tagged (i.e., marked as scrap).?

When you multiply all three ratios, you get the equivalent of measuring total productive uptime against total scheduled time.

Labor: An Overlooked OEE Lever

OEE helps us understand how our facility is performing and where we should prioritize improvement efforts. While the instinct is always to reach for expensive robotic arms or invest in lengthy design for manufacturing (DFM) efforts, simple changes in the workforce can yield massive results.?

In our experience working with manufacturers, we’ve seen high quality labor create improvements across all 6 losses:

1. Reduce unplanned downtime by arriving on time everyday
2. Minimize changeover time by following 5S and SMED (stay tuned for follow-ups on each) to quickly move from one SKU to the next
3. Masterfully feed material from each unit to the next, maximizing runtime for a given batch
4. Watch for slower cycles and report changes to their supervisors and manufacturing engineers
5. Quickly take a production run to a first ‘good part’
6. Reduce scrap by deeply understanding all the processes, materials and tools that make up a facility

Conclusion

Technology and process improvements are critical to enhancing operational efficiency, but the impact of high quality labor should not be underestimated. Well trained, professional operators drive improvements across all three components of OEE – availability, performance and quality – by reducing unplanned downtime, optimizing changeover times, ensuring efficient material feeding, monitoring machine cycles, achieving quicker first good parts, and minimizing scrap. Prioritizing labor quality is a cost-effective strategy that can create a step change in operational excellence.

How can we help?

Traba is dedicated to finding high quality operators across all manufacturing verticals by tracking their on-time arrival, business feedback and experience levels in various types of machinery. By combining omnichannel recruitment with in-depth data collection, we’ve mastered the art of finding diamonds in the rough.

Are you looking for a quality extrusion, injection molding, CNC or printing operator? Contact Traba today.