Rethinking Productivity Measurement: Beyond OEE

The constant search for efficiency in manufacturing operations has led experts to explore productivity measurement methods that go beyond conventional formulas. Overall Equipment Effectiveness (OEE) has been the gold standard for years, but is it time to innovate? In this article, we invite you to discover an alternative approach that could revolutionize the way your factory works.

In search of a more accurate measurement

Productivity in a factory goes beyond simply counting the units produced. Each component, each product, carries a unique genetic code in its manufacturing process, and we must take these into account when performing any measurement. Ignoring variability in the complexity of manufacturing processes would be like trying to measure an athlete’s performance based solely on the time of their races, without considering the distance or the difficulty of the terrain.

It is essential to understand that not all production units are created equal, and even less so should they be treated uniformly.

Until now, Overall Equipment Effectiveness (OEE) has been the most widely used method for measuring this productivity. It is a composite indicator that measures the effectiveness of a piece of equipment or a manufacturing process in three essential dimensions: availability, performance, and quality. This indicator has become a cornerstone of many production environments because of its ability to identify areas of loss and opportunities for improvement.

However, while OEE provides a useful framework for breaking down efficiency, it falls short when faced with the diversity and specialization of modern industries. Its large-scale application or integration across different production chains often proves to be more an exercise in adaptation than in precision.

These are some of OEE’s weaknesses that illustrate why this system tends not to be sufficient:

• Assumed uniformity: OEE treats all operations as if they had the same weight and difficulty, which does not represent the diverse and multifaceted reality of modern production.
• Rigidity in the face of diversification: The metric can become less meaningful in factories that produce multiple products or frequently change production lines.
• Aggregation difficulties: When trying to add up or average OEE to get an overview of the entire plant, crucial details and operational nuances can be lost. It is also not easy to obtain data for a specific operator.
• Lack of sector-specific flexibility: Modern factories vary enormously from one sector to another. A one-size-fits-all approach, such as the one proposed by OEE, may not translate well across different industries, each with its own particularities.
• Limited visibility into underlying processes: OEE may indicate that a process is inefficient, but it does not always clarify why. This can lead to corrective actions that are reactive rather than proactive.

An alternative proposal

An innovative solution to address the needs that OEE fails to meet is to define theoretical times for each operation, establishing a customized productivity standard.

Theoretical times are the standards established for carrying out a specific task, taking into account ideal working conditions and the nature of the process. They are defined based on time-and-motion studies, historical data, and industry benchmarking.

By comparing the actual time spent producing a part with its corresponding theoretical time, we unlock a more accurate and detailed view of our plant’s real efficiency. And the result is a simple percentage that everyone understands.

This approach seeks to harmonize theory with practice, adjusting expectations to the individual operating reality of each plant.

Advantages of this proposal

In the pursuit of operational excellence, this system promises to improve not only performance, but also the intelligibility of productivity metrics. These are the main strengths of measuring theoretical times:

• Customized calibration: Instead of a single measure, each line or product would have its own ‘ideal standard time’, allowing for a more accurate and personalized evaluation.

• Multiple perspectives: This metric can be adapted to specific processes, machines, areas, or people. Each angle can provide key information about where the bottleneck is. Since it is all expressed as a percentage, it is easy to aggregate.

• Clarity in communication: A more intuitive and less technical system makes it easier to understand at every level of the organization, which is essential for commitment and the effective implementation of improvement strategies.

Challenges posed by the new measurement system

While these advantages are tempting, we must also be cautious and consider the challenges inherent in adopting this measurement system, as doing so will help us mitigate risks and make the most of its potential.

• Establishing theoretical times: Precisely defining theoretical times for each operation can be a complex task that requires a deep understanding of every aspect of the production process.

• Dependence on historical data: The effectiveness of this approach is strongly anchored in the availability and quality of historical data, which are essential for establishing and continually adjusting theoretical times.

• Requires investment in IT: Implementing this system could require an initial investment in technology for tracking and analyzing data, since doing it on paper or in Excel is not viable.

Keys to adopting measurement based on theoretical times

Implementing a measurement system based on theoretical times first involves conducting a detailed study of each operation; therefore, this study must be rigorous and take into account the variability inherent in each process. We will then establish these times as our internal benchmarks, against which we will measure actual performance.

It is important to bear in mind that this method requires a cultural and mindset shift, moving from a generalized approach to a customized one. An attitude of transparency and openness to change should be encouraged among all workers, where improving theoretical times is seen as a shared goal and not as a tool for supervision or punishment.

Ultimately, the benefits of this approach can be significant, especially for organizations that are currently limited by or struggling with the OEE model.

Bold Factory: an ally in improving productivity

Imagine a platform that not only provides the tools to implement this new metric automatically and independently, but also guides you through its integration into your production process. Bold Factory can be an invaluable technology partner for your factory, offering an integrated SaaS solution that combines advanced analytics with ease of use.

Customization is not a luxury; it is a necessity in measuring the productivity of tomorrow.

If you believe it is time to adopt a system that reflects the complexity and individuality of your manufacturing operations, get in touch with us. Discover for yourself how to improve the way we view and measure productivity.