Supply Chain and Logistics Consulting 734.502.2771
In my last newsbrief, I discussed the issues of working capital management, customer service and postponement strategies within supply chain management. I presented challenges and options for resolution related to key supply chain inefficiencies, primarily in the areas of logistics and tactical planning.
My focus for this e-newsletter is in manufacturing, specifically within the four walls of a high volume production facility. Manufacturers, today, are continuously pressured to reduce costs and are very sensitive to the metrics of production line rates, yields, and asset utilization. Improvement of these metrics can substantially increase throughput, which reduces the manufactured cost per unit.
Compared to many of the supply chain disciplines — which have well-documented strategies and systems for improvement — monitoring plant efficiencies on a real time basis is a relatively young discipline. The prevailing term for this discipline is Overall Equipment Effectiveness (OEE), which seeks to independently measure line rates, production yields, and utilization. The product of these three measures results in the key performance indicator (KPI) called OEE.
Until recently, measuring OEE on a “real time” basis was a relatively “untapped” opportunity for manufacturers. As such, I have expanded my supply chain consulting practice to include manufacturing/packaging efficiencies, and specifically OEE management. Additionally, I am pleased to announce a new alliance partner within my practice that focuses on OEE. The new alliance is CDC Software, and there software offering that addresses OEE is branded as CDC Factory. More information about CDC Software can be found at www.cdcsoftware.com.
Manufacturers have recognized that the unique success enjoyed by CDC Factory is attributable to the usage of real time performance data acquired in the OEE-based monitoring processes and systems. These processes are intended to improve manufacturing utilization, line rates, and production yields. The benefits of OEE improvement — even just a few percentage points of improvement — can be dramatic, totaling in the millions of dollars. These benefits are documentable, as the software has the functionality to track the improvements by plant, line, shift, and production run.