How OEE in Manufacturing Increases Revenue and Profitability: An Insight

Business owners, including manufacturers, look for ways, tools, and techniques to increase and boost their productivity and profitability. Thus, the first thing required is a system that can track the losses and can record and report them. The significant traditional losses that the manufacturers face are equipment failure, reduced speed, setup, adjustments, and others.

These days, with technological advancements and modernization, most manufacturers use OEE in manufacturing. It is the key measure of their shop floor performance, operational efficiency, and effectiveness. After all, in this modern manufacturing landscape, operational efficiency is the key to the business’s success.

Thus, in today’s blog, we will discuss how using OEE in manufacturing increases a business’s revenue and profitability.

An Introduction to OEE (Overall Equipment Effectiveness)

OEE (Overall Equipment Effectiveness) is defined as the total productivity of the machine compared to its total capacity. It presents how effectively an equipment, production line, or asset performs by considering the three primary elements – Availability, Quality, and Performance.

Measuring OEE is a manufacturing business’s best practice. It enables them to gain profound insights into improving or enhancing their manufacturing process. It is measured in percentages. It presents insights into how well the existing resources have been qualitatively utilized.

The Three Key Factors Affecting the OEE

As we said earlier, the three factors affect the OEE in manufacturing. Discover below:

• Availability: Availability refers to the percentage of time the equipment or any other asset is available for production. The availability score will be lower if the equipment is constantly down for repairs or maintenance.
• Performance: As the name suggests, this factor measures the performance of the equipment when it is running. The factors included are setup time, speed, and change over time.
• Quality: This third key factor refers to the percentage of the products meeting the quality standards and maintaining customer satisfaction and retention. The quality score will be lower if the equipment produces more defective or low-quality products.

OEE (Overall Equipment Effectiveness) Benchmarks

The four OEE (Overall Equipment Effectiveness) benchmarks are the following:

1. 100% OEE: Perfect production when only good products are manufactured.
2. 85% OEE: World-class OEE for discreet manufacturers, which can be a goal for many manufacturing companies.
3. 60% OEE: It is the standard score, but this score can be improved and made better.
4. 40% OEE: It indicates a low score and can be improved by identifying, discovering, and addressing the most significant sources of downtime one at a time.

Benefits of OEE in Production and Manufacturing

Tracking the OEE for your manufacturing unit has many benefits. It helps enhance and boost revenue. Well, some of the benefits are the following:

1. Identifying Inefficiencies: It is crucial to analyze the aspects of the production or the manufacturing process causing downtime or bottlenecks for a better production capacity. It will also allow the manufacturers to make data-driven decisions.
2. Improving Quality: Quality is one of the three significant factors that affect the OEE in production. Thus, the areas where products and goods have not met quality standards can be determined by measuring quality as the essential factor in your OEE score. Therefore, with this, there is an increase in the chances of the corrective action to be taken.
3. Meeting Delivery Deadlines: When OEE is being tracked, the manufacturers can meet their everyday production targets. It ensures that deadlines are met to fulfill customer demands, achieving maximum customer satisfaction.
4. Making You Stand Out from Competitors: When the manufacturers can track the floor operations in real-time, it provides a distinguished factor. With OEE in manufacturing, they can present that their shop floor is modern, advanced, and performance-driven, fulfilling their commitments.
5. Increased Revenue and Profitability: When the OEE score is improved, it directly leads to increased productivity, profitability, and revenue. Also, with the equipment efficiency maximized, more goods can be produced in less time, maintaining quality and customer satisfaction.

Gain Real-time Visibility into Your Shop Floor with the OEE Solutions from Manufapp

Manufacturing businesses that score high in all three areas of quality, performance, and availability mean that their equipment performance has been carefully optimized. It also indicates that their machines and equipment are maintained with precision, with practical training for the staff.

Have you been looking for effective OEE solutions from a reliable company? Trust Manufapp! Many manufacturing companies have used Manufapp OEE solutions to cut costs, improve quality, and increase revenue and profitability. Reach out to us today! Let our OEE (Overall Equipment Effectiveness) solutions drive your business growth and progress with modernization!