Enhancing Manufacturing Execution Systems (MES) by integrating OEE and EBITDA

A growing number of companies need to rapidly automate their manufacturing processes to satisfy the demands created by our changing environment. Execution on-time and every time is a standard for every customer.

Access to information, status of production and understanding available capacity from hour to hour is essential.

Many companies have implemented a manufacturing execution system (MES) and have exhausted a significant amount of effort to interface multiple business / manufacturing applications.

 

Automating a company’s key business processes via an MES strategy enables;

  • increased productivity,
  • ensures predictability of quality,
  • improves robustness of process/product,
  • increases consistency of output,
  • reduced direct human labour costs and expenses,
  • ensuring disaster recovery plans are in place and effective.

This is all good but if the MES does not have an effective feedback loop, the expected results will likely not be achieved. Mapping the flow of information through all essential business application/processes is the first step. Lack of sufficient integration with other applications will create gaps in the ability to execute consistently. Defining the interface [the how] and determining information [the what] is critical for a value-added result.

Overall Equipment Effectiveness (OEE) is an effect way of measuring the human and machine interface. It is well known that the industry standard of excellence for OEE is 85%.  It is a good practice to link OEE initiatives with EBITDA results.

The table below demonstrates the relationship and effect of OEE improvements on EBITDA.

OEE is used as a driver metric to initially improve Availability and Efficiency stabilizing the manufacturing processes before improving Quality. The EBITDA is the result metric keeping improvement initiatives aligned with company expectations.

The following are factors to consider while developing OEE process controls.

 AVALIABILITY FACTORS

  • Determining the most effective working & shift structure to meet demand. (Consider shift plan flexibility).
  • Optimize planned downtime activities, change overs, cleaning, breaks, etc.
  • Reduce unplanned downtime
    • Effective Preventive & Predictive Maintenance program – machine downtime hits the bottom line.
    • Effective Planning tools and appropriate visuals on the shop floor to ensure scheduled production is achieved.
    • Backup strategies and succession planning for key skillsets.
    • Standardize and visualize all work impacting productivity.

 EFFICIENCY FACTORS

  • Ensure Manufacturing standards are assessed properly and are consistently reassessed as the process manufacturing changes take place. (i.e., efficiency > 100% does not help improve EBITDA).

QUALITY FACTORS

  • The standard work instructions need to be very clear and intuitive for any resource performing the work.
  • Quick response addressing issues impacting OEE.
  • Identifying critical skills in key areas supporting the OEE processes.
  • A proper level of connectivity to business systems and functions; Management, Finance, Engineering, Operations/Production and Quality.

 

It is important to understand what needs to be in the scope of your digital strategy to achieve the desired outcome. Equally import is how (in detail) the integration will work with information and feedback loops to quickly address manufacturing issues. Consider reviewing your MES with OEE and EBITDA when you are finding ways to improve profitability.

I hope you found this blog informative and look forward to hearing from you.

Paul; PViolante@lynxbmg.com