Ernst & Young Supply Chain Forum Report

SCLAA (WA) and APICS members were much in evidence on 11th April at a city centre breakfast seminar organised by Ernst and Young on Overall Equipment Effectiveness (OEE).

Per Stanley and Gaurav_350

Two of the organisation’s experienced consultants, Wim Hoogedeure and Gaurav Paliwal spoke to the multi-industry audience about how to apply OEE in operational situations.

OEE was defined as ‘the difference between theoretical capacity and actual output of a production unit’.

Gaurav described that key to achieving excellence is to first identify the operational bottleneck – the item of equipment of process in the operations that is the most restrictive, and therefore controls the speed at which the remainder of the operation can run.

He then outlined the method of evaluating the bottleneck with OEE techniques. The gap between theoretical and actual output (the effectiveness loss) is broken down into:

Time lost due to Maintenance (Planned or Unplanned)
Time that could have been used but wasn’t (shift changes etc.)
Time spent producing at a sub-optimal rate
Time spent producing sub-standard quality material.

Gaurav Talking OEE_350

Methods of measuring these various losses were then discussed.

Improving effectiveness was put in two alternative contexts; that of seeking to increase throughput, and that of seeking operational cost reduction.

Wim supported the presentation by translating the concepts discussed, from mining terms, into a more general supply chain context, to suit the wide range of industry sectors represented at the meeting.

Finally Gaurav described the usefulness of Reliability Technology in supporting the management of OEE.

As the audience departed to apply the concepts discussed to their various businesses, thanks were offered to Wim and Gaurav and to Ernst and Young for hosting the event and delivering an interesting and relevant presentation.