The Alliance for Innovation and Operational Excellence (AIOE), founded by PMMI, The Association for Packaging and Processing Technologies in 2011, has released an Overall Equipment Effectiveness (OEE) Opportunity Calculator.
According to Steve Schlegel, AIOE co-managing director, this is the first time any group has created a common tool to identify opportunities for improvement, develop project pipelines and track progress.
“OEE has been the most broadly adopted measurement tool for companies engaging in a continuous improvement initiative, but it’s not the only one out there.” Schlegel says. “AIOE members selected OEE as a common method of measurement, because when a continuous improvement initiative has OEE as its key performance indicator, companies can better understand where opportunities for improvement exist. OEE provides a common set of references and common terminologies.”
That lack of common terminology and criteria can be a roadblock to collaboration. This challenge led the consumer packaged goods companies (CPGs) and original equipment manufacturers (OEMs) of AIOE’s Operational Reliability Solutions Group to create the OEE Opportunity Calculator and a supporting publication, “Overall Equipment Effectiveness: Guidelines for the CPG Industry and Its Suppliers.”
The calculator, based on Microsoft Excel, allows users to quickly and simply generate an estimate of potential savings on a production line as a result of OEE improvements.
“One of our objectives was to make this calculator as easy to learn and use as possible. In addition to the software, which is commonly available, the data you input is common operational and financial data. You come away with an estimate of the value of the improvements you’re planning,” Schlegel says.
Consistent data is a powerful tool, and key to identifying and selecting opportunities to improve operational performance. But, notes Mark Hanley, asset reliability manager, Land O’Lakes, who participates in AIOE’s Operational Reliability Solutions Group, “When users don’t understand the data, it’s not nearly as helpful.”
“How do you demonstrate to management the value of a 1 point improvement in OEE? One thing that helps is remembering that it’s not the OEE number itself you are after. It’s the use of that number to help you guide your improvement efforts,” Hanley says.
Still, Schlegel says, initiating a continuous improvement program like OEE can be difficult regardless of the benefits. That’s simply because of internal support, resistance to change and a perception of shortages of resources such as understanding, budget, personnel and time.
“Now, with minimal resources and an industry-standard template, an organization can estimate potential financial impacts an improvement in OEE can generate. Subsequently, a production team can use that information to generate buy-in from key stakeholders to initiate a continuous improvement program,” says Schlegel.
Conversation and common ground such as this are at the backbone of PMMI, The Association for Packaging and Processing Technologies. PMMI founded AIOE in 2011 as part of its mission to convene the packaging and processing supply chain.
The AIOE OEE Opportunity Calculator is online and available at no charge at PMMI.org/alliance.