Why Use OEE? Does OEE Lead to Business Growth? (Yes!)

Overall Equipment Effectiveness (OEE) is often used as a production floor Key Performance Indicator (KPI). OEE is calculated with the formula as OEE = (Availability) * (Performance) * (Quality). As an example, if Availability = 82%, Performance = 89% and Quality = 93%, the OEE is calculated as 68%. Systems have ‘Norms’ and a specific reading measured against industry standards reveals the effectiveness of your process. (Although, an OEE of 85% is generally considered the ‘Target’!).

The OEE component ‘Availability’ is defined as the percentage of scheduled time that an operation is available to operate. This is a measurement of ‘Uptime’ and excludes the effects of ‘Quality’, ‘Performance’ and scheduled ‘Down Time’. ‘Performance’ (also known as ‘Production’) measures the ‘Speed’ of a work center as a percentage of the WC’s ‘Designed Speed’. Performance excludes the effects of ‘Quality’ and ‘Availability’. Performance can be calculated as (‘Parts Produced’ * ‘Ideal Cycle Time’/ ‘Operating Time’). The ‘Quality’ portion of OEE represents as a percentage of ‘Total Units Started’. This ‘Quality Yield’ excludes the effects of ‘Availability’ and ‘Performance’. As a calculation, ‘Quality’ = (‘Units Produced – ‘Defective Units)/ (‘Units Produced’).

What factors ‘Contribute’ to the three OEE areas of Availability, Performance, and Quality? For Availability, it is the ‘Planned Down Time’ and ‘Equipment Breakdown Time’. For Performance, the factors affecting OEE are ‘Minor Stops’and ‘Speed Loss’. Quality is affected by ‘Production Rejects’ and ‘Rejects on Start-up’. An increased OEE score can be obtained from specific ‘Counter-Measures’ to reduce to ‘Effects’ of these factors.

‘Special Circumstances’ can make the OEE less ‘Valuable’ as a ‘Performance Metric’. One circumstance could be a variable cost in operation of the equipment. Another might be a significantly stringent ‘Quality’ metric which could skew the OEE score. (i.e. A system where the Quality cost of error is significantly more a factor of effectiveness than either ‘Performance’ or ‘Availability’).

Still, with these exceptions, the OEE metric as a Key Performance Indicator can deliver a better performance which leads to greater capacity. The innovation of products to fill that ‘Capacity Void’ leads to sector ‘Domination’ and BUSINESS GROWTH!

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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Leadership, The Military and Business Growth!

Pre-9/11 Military, (Service: Enlisted Active Duty, ROTC, Ohio Army National Guard (Artillery), (Then, Inactive Ready Reserve), Lieutenant, 10+ years ‘In Boots’). I don’t think it makes a difference if you are ‘Pre or Post’ 9/11 from a military ‘Leadership’ perspective. Why? The U.S. Military ‘Trains as it Fights’. True, there is a ‘Personal Perspective Difference’ when you land ‘Boots on the Ground’, but from a ‘Learned Leadership’ perspective, you must still ‘Deliver the Mission’ on what was trained (to include the ‘Unexpected’). What is the ‘Leadership Take-Away’ from my military experience? (i.e. Did you ‘Learn’ anything? (Yes)).

There is much talk about ‘Integrity’ which is a characteristic espoused as quite ‘Necessary’ as a leadership requirement. This is true. People do ‘Need Standards’ and integrity delivers ‘Required Transparency’. Leadership in the military and in business that ‘Adheres to Integrity’ can’t go far wrong.

There are ‘Traits’ that become apparent with ‘Successful Leadership’. At least from a military perspective, ‘How to Lead’ became a personal goal. It is ‘not’ something that I was ever specifically told or which I discovered in a book. Leadership is a very ‘well-worn’ word as there is much said and written on the subject. One expression that, I believe, is accurate in describing successful leadership would be the phrase ‘Servant Leader’. (i.e. ‘Give’ more than you ‘Get’!).

The ‘Best’ way to achieve mission success is to utilize the ‘Natural Leadership’ of the team. The same is true in business, you need to use the ‘Strength of the Team’ to accomplish the mission.

Team development is essential. One aspect of the military is that you don’t get to pick the team. At least initially. You must ‘Train’ the team you are ‘Given’. As in business, it is ‘Best’ to try and ‘Train-up’ the team you inherit. Still, it is essential (and ‘Fortuitous’) when a ‘Great Team Lead’ (Leaders) can deliver on team/mission goals.

Picking those team members who ‘Excel’ at knowledge, enthusiasm and proactive activities goes a long way towards ‘Delivery of the Mission’ (The only ‘Real’ result of which you are ‘Judged’). One benefit of ‘Lifting the ‘Team’ is that as the team ‘Rises’ so you will ‘Rise’. Business development (i.e. Growth), as in the military, starts with the delivery of ‘Today’s Goals’ so that ‘Clarity of Thought’ can plan and deliver ‘Tomorrow’s Goals’.

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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Clarity of Purpose and Business Growth!

Question: Why are you in business? Answer: To provide a product or service to fulfill a ‘Need’ that will be ‘Compensated’ by the customer for ‘Value’ delivered. ‘Need’ can be defined as an ‘Urgency’ in a customer to solve a ‘Problem’ which the Sales and Marketing team has made clear to the customer. The ‘Mission’ of business is to be successful at attaining ‘Compensation’ for that value delivered.

What does this have to do with Lean Six Sigma? Everything! Lean leads to efficiency which leads to clarity. Clarity is a ‘Product’ of efficiency which is the focus of Lean. This is the ‘Circle of Innovation! This ‘Business Equation’ ‘Works’ best when the operation’s systems are led by those who understand Lean. Operational clarity starts with a well-defined system. The Value Stream Map (VSM) is the main Lean ‘Tool’ to define the ‘System’ with a ‘Current State’ and an envisioned ‘Future State’ of Optimization. Lean methodologies allow a ‘Clarity’ of purpose so that the ‘Future State’ of Optimization can be achieved.

Business Operations include ‘Sales and Marketing’ which also follow ‘Systems’ to ‘Sell’ the customer’ on the company’s ‘Best’ solution to their need. After the sale, Sales and Marketing will follow additional ‘Systems’ to keep that customer ‘Delighted’!

Lean is essential to clarify the company’s ‘Business Purpose’ and keep Operations, Engineering, Finance, Sales and Marketing, and Customer Service ‘On-Point’ to deliver the company’s ‘Best’ products and services. Innovation is developed from ‘Efficient’ Systems which deliver ‘Quality’ Products to solve customer ‘Needs’ which leads to Business Growth! A company’s ‘Competitive Advantage’ is maintained with Lean Six Sigma Systems! 

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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Will Your Focus on Capability Result in Business Growth? (A Resounding, ‘Yes’!)

The ‘Mantra of Six Sigma’ sets the ‘Gold Standard’ for Minimum Defects in Quality Systems. Still, the ‘Quality’ subject needs to be approached with caution. As mentioned previously, Lean Efficiency can reduce much of the variation in ‘Key Characteristic’ data. Though, once you have improved that ‘Efficiency’, the next focus is a verifiable ‘Six Sigma Quality Standard’. Your first question should be, ‘What Product ‘Key Characteristic’ data needs to be measured? If the ‘Customer’ has not set these parameters, the Continuous Improvement Leader should consider ‘Quantitative’ variable ‘Key Characteristic’ data required in ‘Product Functionality’.

Readily available ‘X Bar (mean) and R (Range) Control Chart’ software will accept normal variable data and show the Mean, Six Sigma UCL (Upper Control Limit) and LCL (Lower Control Limit) plus Cpk (Process Capability). Verifying ‘Control of the Process’ via the ‘Range Chart’ allows a quick determination that the Cpk (Process Capability) will be better than the ‘Required’ Cpk of 1.0 for a Sigma of Six.

As an example, Boeing requires a process Cpk of 1.33. Effectively, this requires the ‘Process Capability’ to have a ‘Tighter Variability’ than the Six Sigma ‘Control Limits’ and allows a ‘Margin of Error’ for the ‘Key Characteristic’ being measured. Thus, the ‘Key Characteristic’ measurement could effectively be ‘Outside’ the current ‘Variability Range’ and still ‘Within Six Sigma Control Limits’ (And within required engineering functionality specifications). This increased ‘Capability’ for the ‘Process’translates into fewer ‘Field Component Failures’. Thus, improving ‘Brand Loyalty’and ‘Product Confidence’. Remember, Price is always a Factor in a ‘Purchase’, but the ‘Value’ built into that ‘Price’ via ‘Confidence in Systems’ definitely translates into BUSINESS GROWTH!

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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The A3 Report Leads to ‘Best in Category’. (Plus Increased Revenue from Business Growth!)

What is an A3 Report? The A3 Report is a problem-solving template based on the Lean ‘Thought Process’ of ‘Plan Do Check Act’ (PDCA) which mimics the natural thought process to ‘Solve a Problem’. (A process you don’t need to go to school to learn). Really, if you have a ‘Problem’ you will naturally try the ‘Best’ logical solution. If that solution ‘Works’ you will ‘Continue On’. If that solution does not work, you will ‘Retry’ with the next logical solution. This ‘Natural’ problem-solving thought process is followed in the A3 Report.

Why use the A3 Report? Here are 4 Reasons: 1) Document and solidify your Continuous Improvement efforts. 2) Provide a ‘Template’ to train associates on a ‘Natural’ solution discovery process. 3) Provide a ‘Reference History’ to solve recurring issues. And 4) Allow a constructive path for associates to participate in CI efforts.

Still, the ‘Real’ question is how do you get associates to participate in the use of the A3 Report? Like it or not, the A3 Report, like the ‘Suggestion Box’, can get regularly ignored. One suggestion on circumventing this issue is to have a ‘Motivating CI Leader’ who can instill a ‘Need’ to participate. The ‘Carrot or the Stick’ philosophy is useful in understanding associate participation. Good cycle time data can drive Continuous Improvement suggestions from the ‘Belief’ that associate solutions are better than leader solutions. This approach is beneficial as it allows the associate to ‘Speak’ and leadership to ‘Listen’ which can develop positive ‘Team Behaviors’. An A3 Report ‘Carrot’ could be incentives in the form of ‘Cash Cards’ or ‘Team Meals’ given for ‘Goals and Improvements attained’. Also, Rewards promote ‘Positive Behaviors and Attitudes’.

Efficient Operations from the use of the A3 Report delivers Quality Products to customer ‘Key Characteristic’ expectations which can promote ‘Brand’ awareness and a revenue ‘Price’ premium. Customers will ‘Pay’ for the convenience of ‘Operation Speed and Product Quality’. The A3 Report develops ‘BUSINESS GROWTH’ by allowing a ‘Path’ for a company to be ‘BEST IN CATEGORY’!

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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How ‘Deep’ is Lean? (All the way to Business Growth!)

You can’t get to Quality until you ‘wade through’ Efficiency. Where do you start? ‘Variation’ forces the Continuous Improvement ‘leader’ to focus on efficiency ‘First’ because the CI leader knows you’ll ‘spin your wheels’ if you jump into the quality issue first. Why is that? (You don’t know if the Quality problem is truly the issue or the variation will go away once the efficiency issue is improved.)

With every word, another explanation is required. i.e. Improved vs Resolved. Efficiency is a ‘moving target’ it is never ‘Resolved’. Today efficiency is good and tomorrow the situation has ‘slid back’ into the quagmire of the human interface. Fact: Efficiency must be continually monitored. (What gets measured gets improved!). So, how do you improve efficiency? That is where ‘Training’ comes into play. Believe it or not, the CI leader will not be able to improve efficiency by themselves. It is the Team (Department, Division, Company….) that will Succeed or Fail together.

The ‘Big Seven’ areas for Efficiency Focus: Over Production, Un-necessary Inventory, Waiting, Motion (Un-necessary/Excess Motion), Over-Processing, Transportation, and Rework (Defects)! Lean Six Sigma training equals more ‘eyes’ on the system. (Team Effort). A VSM (Value Stream Map) focus allows for an ‘orderly’ approach to breaking the revenue stream into process steps…. Kaizen Sprints allow a ‘Timed Focus’ and a ‘Team Effort’ to improve the situation. Securing increased efficiency minimizes the variation equation. At this time, Key Characteristic statistical data can be ‘mined’ to give a better view of where solutions to Quality issues might exist. And, of course, improved Efficiency and Quality lead to Innovation (more time to ‘Think about Product Development’ rather than ‘Putting out the Fire’ on recurring issues.) which leads to BUSINESS GROWTH!

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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The Cult in Culture! A Lean Approach to Business Growth!

Strong words but the rewards developed from a great company culture of Lean drives efficiency, quality and innovation and that Culture becomes the basis for the most important factor of Company Growth! Your business’s competitive advantage is in your company culture. The next question is ‘How do you develop your company culture?’ Here are three factors to deliver a Lean Culture that will drive company growth.

First, Lean Training is the start of that foundation. The subject matter of Lean Six Sigma sets the groundwork for a common ‘Lean Language’. This avenue of approach provides the tools, but ‘buy-in’ is provided via personal growth and ‘Value Add’ for the associate. This is derived from a ‘true’ feeling that the associate is ‘Better’ because of the business. Lean training is transferable to any organization as a knowledge base. This makes the ‘Associate’ more valuable. And the associate should know this.

A second factor is a personal ‘Earnings Motive’. This could be delivered via a range of possibilities from team goals and rewards to company-wide profit sharing. A strong motivating leadership is the third factor. It is important to have that ‘Ring Leader’ who can vocalize the company values, direction, and goals. Like a table needs at least three legs, the ‘Cult in Culture’ starts with all three of these foundational supports!

Todd Adams

OBR Optimization Engineering: Lean Six Sigma CI, ERP Software Development, Quality Systems Enhancement, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, 10X your OBSESSION!

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Lean CI, ERP Development, Quality Systems and BPI will Lead to Business Growth!

This is where the ‘Rubber Meets the Road’. From training, then the Value Stream Map provides a Continuous Improvement path and leadership agreement on ‘Prioritization’ of CI tasks. Then the ‘Real Work of Improvement’ begins with ‘Just do it’, ‘Kaizen Sprints’ and ‘Projects’. Business growth is derived from the development of a culture of efficiency, quality, and innovation. For a conversation on your ‘Area of Optimization’ call at (424) 241-0290. Further LSS and ERP Systems Development and Business Process Improvement optimization updates will follow. (Manufacturing, Service, Information Systems, Retail and Government Operations!).

Todd Adams

OBR Optimization Engineering: Lean CI, ERP Software Development, Quality Systems Development, Business Process Improvement, CI Project Work. www.OBREngineering.com; POC: Todd Adams, Todd.Adams@OBREngineering.com; (424) 241-0290.

As the Famous Sales Guru Grant Cardone says, The use of social media can deliver your message. 10X your OBSESSION!

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