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In denial over OEE? Production performance much lower than claimed

By Rick Pendrous , 02-Jul-2010

Companies are continuing to exaggerate the efficiency of their manufacturing operations because those collating the data used to measure it frequently ignore delays such as product changeovers and other downtime on equipment and lines.

According to specialist food consulting and project management business Coriolis, overall equipment effectiveness (OEE) an efficiency measure, which takes account of availability and performance of equipment, together with the quality of products produced on it is as low as 40% in many companies although managers believe they are performing at much higher 'world class' levels above 75%.

Coriolis, which works with many companies in the UK food manufacturing sector, reports that while some have a good understanding of how to measure OEE properly, others are failing to take into account all relevant parameters.

"They are usually wrong, with in-house measures of OEE of 80% when we measure low 40s," reported Coriolis md Mark Dudley.

Dudley added that some companies are further wasting time and effort by unnecessarily installing on-line data capture before they had improved their effectiveness to levels where such technology would add value.

"Anything below 60% OEE, there is no point in online data capture," said Dudley. "They are better filling out [measurements] manually."

Coriolis is currently working with a number of manufacturers concerned about issues ranging from a desire to release spare capacity so-called 'sweating of assets' to looking at ways of reducing the cost of materials; factory site consolidation; and reducing supply chain costs.

Aware that many food companies frequently encounter issues on getting the best return on their investments, Coriolis claimed to have achieved 20% average savings in labour costs on projects it has been involved with.

However, Coriolis consultant Jon Fenton explained that for the worst performing companies those operating in the 3050% OEE range "it's very difficult to get savings".

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