Bridging the Gap: From Equipment Effectiveness to Business Impact
Technology Can Align Shopfloor and Boardroom Priorities
By Steve Adams, CEO at LineView
In the intricate and fast-paced world of modern industry, the concept of equipment effectiveness is a linchpin of operational success. Yet, the question that often looms large is how this seemingly technical measure translates into tangible business impact.
The answer, it turns out, is a tale of two perspectives: that of the shopfloor, where uptime reigns supreme, and that of the c-suite, where the bottom line and environmental, social and corporate governance (ESG) targets hold sway. While these two viewpoints might initially seem disparate, the notion permeates every layer of an organization, making it imperative to bridge the gap in understanding what talks to both the shopfloor and the boardroom.
A digital ecosystem that enables the measuring of a broad range of key performance indicators (KPIs), including overall equipment effectiveness (OEE) can play a pivotal role here. However, it is crucial that these technologies convey data in a manner that resonates with each stakeholder’s unique priorities. The heart of the matter lies in translating technical achievements into language that speaks to both operational leaders on the factory floor and decision-makers in the boardroom.
Efficiency begins on the shopfloor
First, we must get to the crux of the problem. Efficiency serves as the cornerstone of any thriving enterprise, particularly within food and beverage packaging. What is causing inefficiency? Machine downtime, inadequate maintenance, changeovers, quality control, human error, waste, the list has the potential to be endless, and much of it stems from the shopfloor.
But all is not lost. Software has served as the key to bolstering OEE for major food and beverage companies, such as Coca Cola, PepsiCo and Britvic. OEE is a metric that transcends the technicalities of production and carries significant implications for the bottom line. It’s important to point out that OEE might not be the correct measurement or KPI for every business or every line. That being said, creating efficiencies in OEE can result in improvements across the production and packaging line while helping to optimize existing assets without the need to acquire expensive new production lines to meet demand – allowing companies to redirect CAPEX to other areas of their business.
How do we calculate OEE? Measuring or calculating OEE is only possible through real-time monitoring of availability, performance and quality across production lines. Software solutions can capture unplanned downtime, for example, by allowing manufacturers to swiftly detect and address inefficiencies and maintenance issues, leading to increased equipment utilization and minimized production interruptions.
The performance metric optimizes machine efficiency, while the quality metric ensures adherence to stringent quality standards. The result is a substantial improvement in OEE, directly translating into higher output — and, when margins are low, this can result in drastic improvements to overall profitability.
By implementing smart factory solutions, companies can gain real-time insights into their production processes, identify bottlenecks and optimize workflows. This leads to increased productivity, reduced production costs and faster time-to-market. These outcomes are nothing short of essential in the whirlwind world of food and beverage packaging, where speed and precision is critical to maximize output.
The boardroom; where sustainability and profitability matter
Increasing output, reducing production costs, making additional capital expenditures (CAPEX) available, and ultimately making more money is a language that the boardroom speaks. Sustainability has become not just a buzzword but a moral and operational imperative and ESG considerations loom large in the corporate world. So, it’s important that when considering improvements to operations, that the broader business impact is at the forefront of those discussions, to translate the “on the shopfloor benefits” to the boardroom.
By adopting software that essentially removes the burden of thought, and improves OEE and other KPIs across lines, manufacturers can tap into a goldmine of data. Data, which can facilitate transparent reporting on sustainability initiatives.
Data driven insights captured by smart factory software solutions, empower companies to monitor and reduce energy consumption, optimize resource and water utilization, and minimize waste. This approach extends to the identification of areas for improvement and the implementation of sustainable practices, culminating in a reduction on environmental impact. This dual achievement of operational efficiency and environmental responsibility paints a compelling picture for the shopfloor and the boardroom alike.
However, it’s important to look beyond the short-term gains and equip your business with the tools needed for long-term sustainability and profitability. By seamlessly integrating efficiency and sustainability into operations, food and beverage packaging operators can reduce costs, minimize risk and ensure their businesses thrive in a constantly evolving marketplace.
In a world where boardroom decisions impact the shopfloor, it is vital that businesses ensure clear visibility of the efficiency, profitability and sustainability of its lines. Enabled by technology, this holistic approach not only drives operational excellence but also allows companies to elevate their competitive edge by aligning business goals with broader societal and ecological imperatives.
About the Author
Steve Adams, CEO of LineView, has over 30 years of experience in global supply chain management. He is passionate about efficiency and operational improvements that deliver a meaningful return on investment for food and beverage brands, and is an expert in supply chain improvement as well as the digitization of manufacturing. As the former Vice President of Supply Chain at Coca-Cola European Partners, Steve has operated at all levels of the supply chain. His experience includes developing and sharing best practices for operational improvement across blue-chip beverage companies such as Diageo and the Coca-Cola system. Learn more at www.lineview.com