The value of a 1% OEE improvement

Making every second of production count is more vital than it ever has been in this time of high pressure manufacturing. If a group has 4 plants and has little choice but to make reductions due to reduced demand, it’s pretty obvious that the best plant will be the one to survive, and be in a good position when the health of the economy is restored. Using the powerful industry standard of OEE to drive changes will make the plant as effective as possible and results in immediate, quantifiable bottom line savings.

For many companies, the true value of just 1% improvement in OEE can be in the range of £150k - £900k per year. If the market is mature and competitive, with few additional sales opportunities (same in less time), the 1% value of OEE is impressive, but if the manufacturer has capacity constraints and cannot meet sales demand (more in same time), the 1% value will be staggering.

Imagine what a 10% improvement would mean to your business - the improvement you can expect to deliver in the first year of implementing Idhammar OEE.

It’s sobering to remember that a production process with a design speed of a 1,000 products per hour, availability of 70%, performance of 75% and quality of 95% will need 109 hours to meet an order of 60,000 products. That’s 49 additional production hours, compared to a competitor operating at close to 100% OEE. The impact of the extra materials, labour and energy needed to finance those 49 wasted hours is only intensified in the current climate.

Contact us for assistance with calculating the ROI for your organisation.