Study german industry with a lot of idle time

Study german industry with a lot of idle time

November 2013 – Production- and asset-intensive companies could save a total of more than ten billion euros per year with only a moderate increase in their overall asset effectiveness of five percent. This is the conclusion of a recent study by the consulting firm Baker Tilly Roelfs – formerly RölfsPartner. Plant repairs, lack of materials or personnel, unscheduled stops, tests and setups are a particular burden on earnings in industrial companies with below-average personnel costs and high plant intensity. The authors of the study see the greatest potential for improving earnings through OEE (overall equipment effectiveness) optimization in the automotive sector (4.1 billion euros). Euros), power generation (1.4 billion. Euros), chemicals (1.9 billion. Euros) and metal processing (1.1 billion euros). Euro) and food (1.7 billion. Euro).

In asset-intensive companies, it is primarily the plant output per unit of time that determines the possible annual production volume. Lost shifts can hardly be made up as these plants are generally working at high capacity. "The corresponding OEE key figure is collected in almost all companies, but is often not yet used correctly and fully in accordance with its economic significance," says Axel Spies, partner at Baker Tilly Roelfs and head of the study: "In addition, this central key figure is often simply calculated incorrectly, because, for example, performance-reducing short-time shutdowns are neglected or quality losses are not taken into account."

The average OEE ratio in German companies calculated by Baker Tilly Roelfs experts is 60 percent. Top companies, on the other hand, achieve average overall equipment effectiveness of up to 85 percent. "For our calculations, we only assumed a really moderate OEE improvement of just five percentage points," says Spies: "In the process, we found out that OEE improvements always also reduce personnel and energy costs. At the same time, material costs often fall due to the reduction in rejects and capital tied up as a result of the reduction in working capital."An improvement in OEE of five percentage points means an EBIT improvement of one to three percentage points, assuming constant sales.

Optimization approach extends far beyond plant and machinery

The OEE influencing factors go far beyond the actual plant itself. In addition to production and maintenance, they also include the areas of planning, logistics, development, quality, and equipment and toolmaking. Most of the influencing variables can still be optimized after development has been completed – i.E. Even during the series production phase – since a great many starting points are of an organizational nature. These can therefore also be optimized in the short term. According to the study, the parameters that promise the greatest success in the short term are work organization, work plans and target times, material supply, tolerance refinement, quality data collection, maintenance and inspection, and more accurate recording and analysis of malfunction data. "These levers can be used to increase machine runtimes. Thus optimizing the OEE ratio. Costs for personnel, tools, energy and material scrap can be reduced in the long term," says Spies. In addition, OEE improvement avoids plant investments in the medium term. This reduces the amount of capital tied up in the company.

Multiple influencing variables

"A machine can theoretically be in operation 24 hours a day, 365 days a year. However, this is offset by a whole range of possible downtimes – especially in the case of interlinked large-scale plants," says Siegmar Steinau, manager at Baker Tilly Roelfs and co-author of the study. As a result of unplanned stops, the technical plant availability for these plants rarely exceeds 85 percent. In addition, new products and manufacturing processes require tool acceptance and testing, which further reduce OEE. However, the duration and number of tests can be reduced by high quality preparation. "The number of setup operations, which also influence OEE, is in turn determined by product variety, batch size, production control, setup friendliness of the tools and professionalism of the operating crew," explains Steinau. Particularly in discontinuous production, such as in the metalworking industries, scheduled maintenance is often carried out annually – on large plants – and can take days or weeks to complete. If the company's own operating crew is needed for the plant overhaul, the risk of another plant shutdown due to a lack of personnel during the main holiday season increases.

"The annual budget plans are based on assumptions regarding the OEE targets. Plan allocation of the plants and target OEE ratio; falling below the OEE plan values automatically leads to a deterioration of the result. If OEE targets are not ambitious enough, costing rates will rise, resulting in bid prices that are not in line with the market," explains Steinau. "Every deviation in the OEE key figure therefore has an impact on earnings. In addition, the individual company must be measured against the industry benchmark of OEE and EBIT in order to remain competitive in the long term."

In principle, the OEE ratio ("overall equipment effectiveness") is calculated from the overall equipment availability, the equipment performance and the production quality level. Any deviation from the ideal value of 100% will inevitably lead to losses or. Means unused potential in production. For example, sub-optimal occupancy, missing operators, missing material, etc. Can lead to a reduction in capital commitment in the company. Inevitably lead to a reduction in overall plant availability. Equipment efficiency measures the actual output per unit of time compared to the theoretically possible output. The degree of quality results from the ratio of the yield to the total quantity produced.

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