Translating Overall Equipment Effectiveness (OEE) into financial terms allows everyone from the plant floor operators to executives, measure continuous improvement and understand the business value of OEE. The challenge is making this a reality. This blog will dive into what it means to measure OEE, why you should translate that into financial terms, why OEE is important, and finally what role software plays.
Environmental health and safety regulations affect all manufacturing plants whether they utilize a software platform or not. More and more facilities are looking for cloud-based solutions and ways to optimize resources to remain competitive in the industry. Managing environmental health and safety manually is prone to human error, and can consume a significant amount of work hours that could instead be directed toward other, more productive tasks. Cloud-based solutions free up the hours workers and operators spent searching for documents or compiling data into reports. Your facility may already have a system in place for monitoring environmental health and safety issues but may be looking for a genuinely cloud-based, integrative solution. You may not have a digital process, or software program at all. However, as EHS regulations tighten and fines are increasing, the cost of not taking EHS seriously is on the rise. Attempting to monitor EHS manually is an impediment to continuous improvement. The average manufacturer pays nearly $20,000 per employee per year to comply with federal regulations. Knowing how expensive noncompliance can be, is environmental health and safety software that important? Let’s look at what it is and what it can do for your facility.
“An ounce of prevention is worth a pound of cure.” —Benjamin Franklin.
What Is Preventive Maintenance?
Even the best-built equipment will break down over time and need maintenance. Much like taking a car in for regularly scheduled oil changes, preventive maintenance is planned maintenance that a facility performs on its equipment to reduce the risk of failure. Also sometimes referred to as preventative maintenance, the goal is always to incur a lower cost in the present to prevent a higher cost from equipment breakdown in the future.
Many plants are looking for ways to create more efficient processes and develop strategies to better compete with others in the industry. For many, this desire to improve means moving away from traditional manufacturing. It can be a little uncomfortable to look for ways to change when things seem to be working just fine already. However, sticking with processes because “that’s the way we’ve always done them” can work against driving continuous improvement. That’s where implementing OEE comes in.
Manufacturers are seeking ways to remain competitive in challenging markets, and many are exploring how Lean manufacturing and continuous improvement can expand opportunities. There are a number of misconceptions regarding the relationship between the terms Lean manufacturing and continuous improvement. While conflating terms in business and manufacturing is nothing new, it’s crucial to start with some clear explanations of some key general terms to understand better. Manufacturers interested in implementing or expanding Lean tactics can benefit from taking a closer look at these concepts to determine what processes already align with Lean manufacturing and continuous improvement and which do not. For anyone unsure whether Lean manufacturing and continuous improvement are the same thing, keep reading. Let’s start with getting a better handle on what Lean manufacturing is—and what it is not.
As more companies search for ways to stay viable in a lightning-fast, global economy, lean thinking has become an increasingly successful way for companies to adapt more quickly and remain competitive. However, many organizations have attempted to implement lean thinking without moving to a lean accounting model. Accounting departments are trying to reconcile a lean organization with standard costing and running into significant difficulties. Lean accounting represents a shift in how companies use collected data to make essential decisions around quality, production, and more. We'll start with the basics to understand why and how lean must translate to accounting.
While every manufacturer wants to track improvement and meet goals, how different manufacturers approach this can vary drastically. Manufacturers at the enterprise level can quickly devise dozens, even hundreds of performance indicators to monitor every point along every process. Not all of these indicators hold equal importance when it comes to making decisions and driving goals. The adage, "work smarter, not harder," sums up the purpose of KPIs. This blog will separate the wheat from the chaff and dive into KPIs and how manufacturing facilities can effectively use them.
For some companies and departments, the ‘a’ word is dreaded and met with suspicion or even resentment. But audits, especially internal audits, are tools managers can and should use to drive improvement and support positive change. There are many reasons that a company should perform an internal audit. In the food and beverage industry, GFSI standards require internal audits. In other industries, companies may have internal requirements, and internal audits are a great way to perform health checks regarding quality and safety systems.
The benefits of performing internal audits are numerous, from identifying gaps in lines and processes to highlight training issues to uncovering culture gaps within the system. By identifying these issues, manufacturers are better able to prepare for external audits. However, internal audits are only valuable tools if companies can incorporate the 3 C’s of Internal Auditing: Communication, Culture, and Coordination. Let’s dive into ways to make internal audits more successful.
Manufacturers perform internal audits to identify potential improvement and growth areas and check for company and industry compliance in processes and products. However, many companies conduct internal audits without creating improved systems in cost-effective ways. Despite the universality of internal audits, many manufacturers are still making avoidable mistakes that can be costing them time, money, and morale. Here are the top 10 mistakes that I have identified over my 15 years of experience as both a QA manager and an Auditor. These ten mistakes are:
Process manufacturers commonly consider numerous costs like labor, materials, and manufacturing and impact their bottom line. Often the same companies will overlook or undervalue the cost of quality, assuming that products that fall within specifications also meet quality targets. However, simply relying on conformance without examining the cost of quality can result in a few hidden expenses at best---and at worst, amount to considerable waste, negatively impacting the bottom line and subtracting from brand reputation.