OEE (Overall Equipment Effectiveness) and Cost Savings

[lokeky1]

Hi all, I have two inter-related questions.

1. Is it possible to calculate cost savings from OEE improvement? How?

2. Can OEE be linked to Annual Turnover? Is there a mathematical formula for this link?

Thanks.

Loke

 

[krishnat]

1. Yes, Possible
2. Yes can be linked. I am not sure that there is a direct formula

Regards

 

[Englishman Abroad]

Hello

1) OEE is a measure of your waste made during manufacturing, and so should be possible to calculate your cost savings. In fact it is probably easier to calculate cost saves and then OEE.

2) OEE is not linked to turnover. Turnover is what we sell, not what we make.

E.g. I sell $1000 a month of widgets, but the plant has an OEE of 20%. the plant has a Six Sigma black belt expert visit and next month improves to OEE of 97%. However I still sell $1000. - But my costs go down.