Lean With It: What Is OEE in Lean Manufacturing?

If so. Then you could benefit from learning about lean manufacturing. While this concept may have been born in an automobile assembly line, it now encompasses every industry around the world.

Don’t worry if you don’t know what it means to make your organization lean. We’ll go over every aspect of the process and show you how you can incorporate it into your organization. You will find improved workflows, decreased waste, and increased value to your customer.

Keep reading to learn more about lean manufacturing and how it can help your company today.

What is Lean Manufacturing

We’ve come a long way since Henry Ford first came up with the idea of creating an assembly line of production replacing the much slower and less efficient bespoke process.

Today, every industry across the globe turns to various experts to make their production line even more efficient. Many hours are spent analyzing the data to eliminate all waste in the manufacturing process. This obsession with eliminating wasting and increasing efficiency is called lean manufacturing.

Any company or organization that produces a product or service can benefit from incorporating lean processes into their workflow. However, lean doesn’t stop at improving efficiency and production. Instead, it is a mindset and cultural shift for everyone in your organization to eliminate waste.

Waste can have many faces and look different across various industries. Poor communication, poor organization, and unnecessary work are all considered waste in lean manufacturing.

The lean process requires total buy-in from every party involved in the process. From management and executives to the engineers and operators everyone involved must understand the lean process and agree to participate.

Understanding what lean entails also includes understanding what it is not. Lean is not working fast and keeping busy. Lean doesn’t mean creating mass amounts of products that nobody wants to buy. It doesn’t matter that you quickly and efficiently built 500 widgets when the market is demanding gadgets.

In a nutshell, when manufacturing a product or service, the lean framework encompasses your organization creating a system for your workflow. Then figuring out how you can improve upon it. And lastly, continuously improving upon your design and workflow until you can ensure zero waste.

Lean Manufacturing Principles

The lean manufacturing practice and concept is now being applied to numerous industries and product management spheres everywhere. This process of continual improvement and drive for complete lack of waste now spans work and management circles in every field and profession.

These five principles have been identified as the process of pursuing lean in other industries and professions. Follow these principles and you will see the improved workflow in your organization as well.

Principle 1: Identify Value

Value can be difficult to identify. It can vary by what the market demands and what the consumer is willing to pay. Market research is invaluable when it comes to discovering what the customer wants.

Then your challenge is to produce that product or service efficiently enough that you can offer it at a price your consumer can afford while also still turning a profit. You will then create your process and system for how to produce the product or service that your client wants and is willing to buy.

Principle 2: Map the Value Stream

Next, you will look for ways to improve your workflow. Look for waste, look for inefficiencies, look for how you can add value for your customer.

The value stream map shows in a visual format how you get your product from the production process to the final delivery to your customer. Not all of these steps will add value to the process. Your challenge is to find the steps that don’t add value and then eliminate them.

Additionally, waste can happen when you add features to your product that your customer doesn’t want or need. The ultimate value doesn’t mean your product has one hundred features. Value means that your product has the exact fifty features your customer wants.

Don’t add features your customer doesn’t want or need. Anything more is waste.

Principle 3: Create Flow

Once you know the exact steps to your workflow, you need to track that they’re getting done.

From Gantt charts to Kanban boards everyone has their way of creating a workflow process. In reality, it doesn’t matter as much how you plan or track your flow but rather creating and following your plan. It doesn’t matter if you work in two-week sprints or track milestones, to maximize efficiency you must create a workflow for producing your product or service.

Your end goal is for the value-added steps in your workflow to get done seamlessly and without delay or waste in the process.

Principle 4: Establish Pull

While creating large batches does get many products created quickly, it doesn’t do you any good to create products nobody wants and you can’t sell. Don’t allow product to sit on the shelf for months on end. This is a perfect example of waste.

As mentioned earlier, it doesn’t matter is you create a thousand products in the perfect system without waste if they aren’t selling. Only create the correct number of products that will sell in the current market demands. Limit inventory and you will limit one of the biggest forms of waste in the production cycle.

Instead, use the pull method to start production when the client or market demands it. This uses less capital and requires less overhead, thus improving production.

Principle 5: Seek Perfection

As mentioned earlier, one of the main tenants of lean manufacturing is to improve upon your process. Never be satisfied with your current production levels, always be on the lookout for ways you can improve and eliminate more waste.

From idle workers to unused stock or inventory there are plenty of examples of waste within any manufacturing process. To seek perfection you must seek a process with zero waste.

This fifth principle will be a continual process and will never be fully done. You will work to seek perfection every day. And you will find yourself continually searching for ways to improve your process, increase productivity, and eliminate inefficiencies and lost production.

Tracking and Reporting With OEE

As in everything in business, tracking and reporting are vital to continual improvement. Without these imperative numbers, you risk your business falling behind the competition and eventually going out of business. Don’t let this happen to you, track your reports every month.

One metric that is integral to the lean manufacturing framework is the OEE, or overall equipment effectiveness score.

Overall Equipment Effectiveness is a number that is represented as a percentage. It shows how often your production line is meeting your productivity goals. You should be aiming for 100% productivity in your manufacturing line, however, most companies find they are operating at or around 60% most of the time.

There are several methods for calculating this score. The simplest method is to multiply the number of pieces you need are manufactured and ready to ship by the ideal time it takes to manufacture one piece. And then divide that by the total time the production asset was scheduled for production.

Generally speaking, setting a goal of 85% is the most reasonable for long-term maintenance, so the average of 60% leaves room for improvement. A good software program can track your metrics and show you where you can work to improve your productivity numbers.

A quality OEE tracking software will help you track this score and look for ways to improve. Lean manufacturing leans into the idea of utilizing your tools to continue to pursue perfection in your process. A software program like this can be an invaluable tool in your toolbox to work towards lean success in your workflow.

You Can Get Lean With OEE

The lean framework is a process and mindset for your team and organization to embrace efficiency. Many managers tout efficiency when they actually mean is that they want everyone to work hard and look busy.

But lean manufacturing is more than this. It is a cultural shift in your workplace to eliminate waste and inefficient workflows. It is a mindset and collective agreement to continually improve upon the process and deliver value to the customer.

When you do this you will find your product competing and succeeding in the marketplace. Your bottom line will improve and correlate with your lean workflow as there will no longer be extra steps, extra inventory, or wasted downtime.

For more great information about this and other topics, check out the rest of our blog.