20 Apr Do you know how much “hidden” value you have in your plant?
Do you know how much “hidden” value you have in your plant? Probably not – We can easily help you identify how much value you have “hidden”. It is a paradox that so many manufacturing companies still do not focus on how to maximize the utilization of their machines. Millions have been invested in production equipment and many Manufacturing leaders are willing to invest even more millions in new equipment and robots if the demand is increasing. That sounds like an easy decision!
But what if there is a free, but “hidden” capacity on the existing machine capacity that easily could be identified and with a few changes could be released?
There is an easy way to find and identify how to release this additional capacity.
The tool is OEE (Overall Equipment Effectiveness). OEE is an industry standard which express how well you utilize your Machine capacity. It can identify if you do not produce at the maximum speed, or if you have problems caused by the same issue and it even tells you how good your quality outcome is compared to expectations.
The interesting thing is that it doesn’t matter if your existing OEE figures are high or low – the benefit comes from the initiatives or changes you can do to increase your OEE figures based on the information you get from the OEE calculation.
Let me give you some examples.
To be able to make the different OEE scenarios we assume these basic company figures:
To illustrate it’s not so important how your OEE figures are – but how much you can increase them, I have done these 3 scenarios:
The result is that in each case you save some “hidden” cost to produce the same number of goods.
Let’s assume that the company has a profit margin of 10% equal 2 MEUR.
Then you could expect an increase from the 3 scenarios like this;
You could also use the increased OEE figures and released capacity to increase sale.
Given the same 3 scenarios sales could be increased like this resulting in the following Profit margins;
Given the same 3 scenarios sales could be increased resulting in the following Profit margins;
I hope this show how important OEE can be.
If you are a manager for a Manufacturing company or plant and would like to evaluate how this would look for you, please contact us and we will help you to unhide your potential.
Tommy V. Larsen