Why the OEE is Kissing Awake Right Now

Overall Equipment Effectiveness (OEE) is gaining importance in the discussion of plant and asset productivity management. There are four reasons that every operations professional should be aware of.

Lean Production and Industry 4.0 Growing Together

Lean production has traditionally seen its role in implementing process improvements in a pragmatic way. Simple measures, quick implementation, together with the employees at the shop floor. With that, and the approach of continuous improvement, the concept has been very successful over 20 and more years.

Information technology has been poorly compatible to this in the past. Long planning and implementation cycles, large budgets, implementation by specialists. In other words, lean and IT were like fire and water.

But times are changing: IT has translated the Lean principles – and called it Scrum: Agile product development, fast iterations, integration of the customer into the development process. From the other direction, Lean has understood that under the impression of the digitalization of all spheres of life, which can become more widespread, it is no longer possible to solve all problems with a slip of paper and a pen. Both positions are moving towards each other.

No lean conference can do without contributions to Industry 4.0, in which lean consultants compete for part of the 4.0 advisory cake. Who follows the scene can not escape the growing together of the topics. And the social pressure does the rest. Supervisory boards and boards of directors also have to direct their companies towards the development of digitization. In addition to the external push, there is also an internal pull of 4.0 solutions. It’s no longer different: Lean Production and Industry 4.0 are growing together. As a result, process engineers are on their way to integrate Industry 4.0-based OEE optimization technology into their day-to-day business.

Data Moves to the Foreground

The time to justify investment decisions with tallying is over. And that’s just an example. The importance of data, and to increase it – on-line data – is increasing dramatically. If one was still satisfied with the fact that the OEE could be shown in a bulky Excel document retroactively for the month a few years ago, the claim is now that it will be displayed on-line and in a minute-by-minute resolution to the employees above the attachment.

It is a big mistake to theorize before having data. Imperceptibly, one begins to twist facts to conform to theories, rather than theories that correspond to the facts. – Arthur Conan Doyle, Sherlock Holmes

And the technology is there. Bottling 250,000 bottles per day and not only storing and analyzing the data in this resolution is no longer reserved for companies like Google or IBM: thanks to cloud applications and big data algorithms. In addition, artificial intelligence is starting to spot patterns in the vast amounts of data that are hidden from humans. The fact that a system has a power factor reduction of 4 % every 43 minutes has not been transparent in the past. In the future this will be the start of a KAIZEN workshop.

Reduced Costs of Industrial Solutions

A variety of start-ups are shaking up the business lines of traditional factory equipment suppliers such as Siemens, Kuka and Co. High development speeds and fast management decisions move them close to the customer. Social media marketing, start-up competitions or speed dating events allow for low-cost market access. And the solutions are able to withstand industrial demands, while at the same time being more innovative. In many boardrooms, it’s now even hip to work with start-ups.

For the OEE, IoT gateways and mobile sensors get all the necessary plant data without having to intervene in the plant. No manufacturer can limit the warranty, no company needs PLC programmers to get to the data. And no IT department needs to install and run a program in the data center. The cloud provides the virtual infrastructure.

In addition, the desire for a good user experience of software arrives at the shop floor. If every employee has a smartphone in their pocket privately, the tolerance for flashing green boxes on an otherwise black screen and the navigation with the Tab key decreases. Again, you have to motivate employees, also here you want to be modern.

And the decision-making culture in the companies is also changing: If a Siemens Mobile Panel costs at least € 2,500, it also does an Android tablet from Amazon to enter disruptive data. If it falls down, you buy a new one. Unthinkable just a few years ago, now pragmatic in many companies and therefore on the agenda.

The days when you had to install a production data acquisition tedious and connect with all facilities are over: costs down, implementation speed up.

Productivity Progress is Urgently Needed

The current situation of industrial production is phenomenal. The backlog of orders is the highest in industrial history. And the trend seems to be unbroken until further notice. The Federal Government and all economic research institutes do not see any slowdown in the growth curve in the medium term either. Despite manifold turbulences in world politics, demand seems to be rising steadily.

As a consequence, factory equipment manufacturers, especially in mechanical and plant engineering, are seeing significantly increasing delivery times. If you yourself have to deal with increasing delivery times towards customers, it is not an attractive solution to order new machines in the current situation. The delivery times are simply too long. This situation keeps the pressure on increasing the output of existing equipment, and thus on the OEE – which should anyway be the first means of choice anyway.

At the same time, McKinsey reports that it is becoming increasingly difficult at the economics level to achieve productivity gains or that they no longer exist. What applies to a country does not have to apply to a company. But in total the air gets thinner. And then there is the megatrend of labor shortages. Even now, qualified production and maintenance personnel in many parts of Germany is the growth brake par excellence. The trend in demographic trends will only exacerbate this in the long term.


This article was published first on Mai 20th 2018 on LinkedIn in German language.