Overall Equipment Effectiveness Drives Profitability Not Just Productivity
Submitted by: TR Cutler, Inc.
(OPENPRESS) June 14, 2011 -- Robert C. Hansen author of Overall Equipment Effectiveness: A Powerful Production/Maintenance Tool for Increased Profits, discusses in great detail the role of OEE in driving profitability. According to John Rattray of Memex Automation (www.memex.ca), "We consider this text to be the premier book on the principles of OEE - Overall Equipment Effectiveness. Hansen demonstrates that for a manufacturer, a 10% improvement in OEE can generate a 60+% improvement to EBIT - representing millions of dollars to the bottom line profit."
An example business case created $5.6 million to profit for a manufacturer producing and selling $100 million per year by a 10% improvement in OEE (Robert C. Hansen, Pages 47-56). The base business case of operating at a 60% OEE is compared to the same company operating at a 66% OEE. Firstly, comparing the reduction of direct labor's impact to operating income - a 21% improvement in EBIT. Secondly, comparing the impact of increased sales to operating income - a 62% improvement to EBIT.
Rattray notes, "Hansen's text brings together both the social and technical aspects of successful manufacturing and processing. I would have paid many times over to have such a book at the start of my manufacturing career. The book is a practitioner's primer; it demonstrates how to apply and improve overall equipment effectiveness at your factory or processing plant. Picture yourself facing a majestic mountain that represents performance excellence at its peak. Every factory or processing plant represents a mountain, and no two are exactly the same. In fact, each changes whenever its products, processes, materials, or people change. Achieving excellence is a continuous climb."
About Memex Automation Inc.
Memex Automation Inc., www.memex.ca, a unit of Astrix Networks Inc., was created to leverage the research and development of Memex Electronics, which was founded in 1992. Memex continues its tradition of serving the discrete manufacturing sector, supplying component hardware, memory upgrades, and visionary shop floor communication technology. Memex products allow a manufacturer to realize the impact of OEE Profitability.
TR Cutler, Inc.
3032 S. Oakland Forest Dr.
Ft. Lauderdale, FL 33309