Cutting costs and improving productivity separate winners from losers in the market, but how can operations continue to improve after “harvesting the low-hanging fruit?" One way to ensure continual improvement of product cost, manufacturing time and quality is to implement an operational excellence program.
These plans help manufacturing operations optimize their people, processes and technologies to meet and exceed operational and financial objectives. An exemplary plan includes metrics to track progress toward those goals, the strongest of which is the overall equipment effectiveness (OEE) metric.
The OEE metric has three variables: quality, availability and efficiency. Matthew Littlefield of LNS Research says the best programs provide measurable improvements in cost and productivity by focusing on the quality aspect of the metric.
Critical quality information demands tools like Statistical Process Control (SPC) software, which provides real-time visibility into the effectiveness and stability of processes. This allows organizations to measure, analyze and reduce variability of their business processes, and ultimately to leverage operational objectives into financial objectives.
The LNS 2013 quality management survey shows operations with real-time visibility of quality metrics outperform those that don’t: OEE variability ranges from 86 percent to 95 percent for the top two quartiles of companies with real-time visibility, and 81 percent to 94 percent for those that don’t. Further, companies without real-time visibility of quality metrics significantly underperform in the bottom two quartiles.
Given the disparity in performance between operations already invested in real-time visibility of quality metrics and those that aren’t, companies performing at less than 80 percent OEE would benefit from investment in real-time quality metric capabilities.