Measuring overall equipment effectiveness (OEE) can lead to longer equipment lifespan, better cash flow and other bottom-line boosting results, according to “Overall Equipment Effectiveness: Guidelines for the CPG Industry and Their Suppliers.” The whitepaper was released today by PMMI and the Operational Reliability Solutions Group (ORSG) of the Alliance for Innovation & Operational Excellence (AIOE).

AIOE, a PMMI initiative with charter partner the Grocery Manufacturers Association (GMA), brings together representatives from consumer packaged goods companies (CPGs) and manufacturers to address key industry issues and establish best practices on a range of topics critical to the industry.

The OEE whitepaper is borne of some of those conversations, says Chuck Yuska, president & CEO, PMMI: “The ORSG participants — a group representing 16 CPGs & five packaging and processing equipment suppliers/manufacturers — collaborated on this project because they truly value continuous improvement and operational excellence in manufacturing.”

OEE is a mindset as well as a process, Yuska notes, but the qualitative, operational measurements and reporting allow a manufacturer to identify opportunities for immediate gains.

“It is vital to ensure that OEE metrics are easily administered, communicated and understood, and that they provide insight into every inefficiency and loss in your automated operations,” says Dennis Belcastro, executive vice president, Industry Affairs and Collaboration, GMA. “Those metrics will expose all manufacturing losses, so you and your management team have the data you need to make objective business decisions that improve the performance, capacity and utilization of your plant assets.”

With those improvements come the potential for a better bottom line, according to the report, which outlines three ways cash flow can improve:

• Monitoring OEE metrics provides the opportunity to improve processes, reduce rejects and rework, and enable consistent delivery of higher quality products.
• An OEE regimen, over time, will decrease operating costs by highlighting waste centers.
• Increasing uptime and output reduces the likelihood of machinery purchases solely for the sake of closing a productivity gap. Furthermore, exposing failures allows them to be addressed. In turn, the equipment undergoes less wear and tear, lengthening its lifespan and the time between capital outlays.

Case studies shore up the ORSG’s assertions, and as promised, a roadmap for implementing OEE is set forth. This paper covers the four stages of Step 1, “Initiation”: “Plan,” “Do,” “Check” and “Act.”

“Like all great projects,” Yuska says, “a successful; sustainable OEE regimen begins with a clearly defined scope and outcomes that engage key stakeholders. Make success metrics clear and easy to understand. It should be clear that using OEE procedures will make a significant and positive impact on the business.”

Copies of this paper will be made available through http://alliance.pmmi.org.