How metrics like OEE often dictate behavior

A reader of the blog asked me the following question via email.  By the way, if you ever have a question please feel free to drop me a line.

I am a production engineer for 3 packaging lines and our overall indicator is overall equipment effectiveness (OEE). Our OEE is calculated using the maximum speed that the line will run for the particular product.

A welcome side effect of some recent machine upgrades is some of our products can now run faster, but due to planning rates (and people factors) this is not always required.

Would you advocate (or is it widespread) increasing line speed but not changing the specified speed to give an overall OEE boost?

Overview of Problem

I am assuming the line speed is being used in the “performance” piece of the OEE calculation. For example, at line speed “fast” we should be able to produce 100 widgets per day. Then, at the end of the day, we count up the widgets and see how many we have. If we have only produced 75 widgets our performance is 75%.

The problem with this, as the questioner alludes to, is that the demand for this particular product may not be 100 per day. It may, for example, only be 60 per day in which case they need stop the line after completing the 60th widget, lest they overproduce (the mother of all wastes).

Stopping at 60 is the right move but the team must now take a hit on their OEE metric since a “fast” line speed means they should be able to produce 100, not 60, in one day.

Recommendations

My suggestion to this individual, and anyone else battling this type of issue, is to remember that metrics like OEE (one of my favorites by the way) should be used to support the business – not drive the business.

Here are my specific recommendations.

1. Calculate takt time. Hypothetically speaking, if there are 8 working hours (28,800 seconds) in the day and we are asked to produce 60 widgets, our takt time is 480 seconds per piece (28,800/60).
2. Calculate the optimal crew size for the assembly line which is simply the sum of manual cycle time for one product divided by takt time. If, for example, the total manual cycle time for one widget is 16 minutes (960 seconds) our crew size is 2 people (960/480).
3. Balance the work so that each operator has no more than 480 seconds (takt time) of work to do at a particular process. This is where line speed enters the picture. The team will need to understand how fast the assembly line should run in order to accommodate this particular pace. A fixed position stop system, similar to the way Toyota operates, may be worth investigating.
4. Set up a hourly production board to track “plan to actual” allowing the team to determine if they are on track or need assistance as the day progresses (before it’s too late).

With all this said, the performance piece of OEE should be “judged” against what the team was supposed to produce on that particular day.

In other words, we set line speed to what we need it to be for that particular day. Some days we may run it faster and some days we may run it slower. In the end, it’s all about what our customer asks of us on that particular day.

Of course, this production team could also decide to study their demand and begin to smooth production using the lean concept of heijunka. This would allow them to stabilize the process and work more consistently day to day.

Would you approach it the same way? Do you have any other advice for this individual?

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