Coal, Cost and Culture: OEE - Equipment vs. Employees

Overall Equipment Effectiveness (OEE) is a ratio that measures the efficiency of a machine's performance or that of an entire plant. Inputs include availability, utilization, throughput and quality ratios that are combined to find opportunities to improve overall productivity of a manufacturing unit. Because our equipment is so expensive and because it extracts and processes our final products, productivity losses and excess costs/rework due to poor quality are critical measures to focus on. Losses in either area can quickly mount up to thousands of dollars, maybe millions of dollars in some cases.   

Since OEE is focused on runtime, throughput and quality, we tend to forget the importance of people in improving runtime, throughput and quality. People:

1. Control all planned delays (operating and maintenance).
2. Decide what the throughput rate will be.
3. Set standards for the quality of the product.

Sometimes we get so caught up in the opportunity to model and trend numbers, we forget about how people influence those numbers by what they say in morning meetings, staff meetings, planning meetings, and budget meetings, as well as what they do in the pit, underground, and in downstream processing plants. Given the inseparable involvement of people and equipment when it comes to improving performance, a more accurate definition of OEE might be ‘a measure of how people interact with equipment in the areas of delay management, throughput and quality of work’. If we look at the ratio from this perspective, it opens up new opportunities to address behaviors as part of the OEE improvement strategy.

There is a second and more obscure opportunity to evaluate productivity – not equipment productivity but human productivity. Have you ever considered the lack of focus and accountability for productivity of people? I am raising this question to elevate the importance of human productivity losses on all performance.

What happens at your company if:

1. Your people take an extra hour to do something because they were not trained?
2. The new system runs slower than the old one?
3. The system crashes and data is lost every week?
4. Reports have to be redone because a bad dataset was used.
5. The warehouse says that parts are in stock and a crew has taken the time to set up for a job, only to be told later that there are none in stock?

We could all add more items to this list, which means that everyone is acutely aware of this issue. The point is that we tend to accept these kinds of human productivity losses as something that our people will ‘just have to make up for’ in the form of overtime, taking work home, coming in on the weekends, etc. Because these losses are seldom measured, we assume the cost is small. The cost in dollars MAY BE small compared to lost run-time, but what message is received by the workforce when these events happen over and over again, year after year? People feel abused and worth less than they are. They are rarely excited about coming to work. Some of them leave and go to work for a competitor.

Common management responses to a list are:

1. ‘Not much – these things happen every day.’
2. ‘These things are just part of our culture – everyone that works here knows this.’
3. ‘We know what we can voice an opinion about and these things are not on the list.’

Whenever managers have the authority and the budget to fix a problem for the people but choose not to fix it, only bad things happen as a result. If the components of lost human productivity were dropped into an OEE facsimile formula, what kind of productivity values would be generated for your workforce? If managers were held accountable for improving the values in the formula, they would take action to reduce system-caused delays and rework, staff to fit the workload, make sure training was adequate for the task, and fix poor working relationships between departments. What kinds of problems would stop being ignored, maybe for the very first time?

Thought for the month:
Only bad things happen when managers have the authority and the budget to fix a problem for their people but choose not to fix it.

Author: Kay Sever CMC, CQIA, Sustainable Improvement Consultant and Coach. Kay Sever is a leader in sustainable improvement for mines and plants. She combines 29 years of mining experience with a common sense approach to improvement that raises awareness about lost opportunity and hidden barriers that prevent improvement success. www.miningopportunity.com.

Read the article online at: https://www.worldcoal.com/coal/04102011/coal_cost_and_culture_oee_equipment_vs_employees/