How to use Overall Labor Effectiveness (OLE) as a companion to OEE for improving direct labor costs

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Жыл бұрын

We're used to measuring the effectiveness of our machinery with OEE - there is a similar way to determine how effectively we're using our Human Resources: Overall Labor Effectiveness (OLE). Since for many factories, their reason to track and improve OEE is primed around labor savings, taking a good look at the manning waste components of labor costs will give you much better tools to do your improvement work.
The OLE system is very similar to OEE, in fact, I like to draw out Equipment and Labor effectiveness as two axes in the same graph - that really shows the relation between machine losses and manning losses.
You can adapt the categories I mention in this video to better suit your company's practices, of course. Think about how this measurement of the most valuable resource we have can help and improve your operational excellence...
#continuousimprovement #laborcost #kpi

Пікірлер: 5

@GeonQuuin Жыл бұрын

Great content as always Tom.

@TomMentink Жыл бұрын

Thanks Geon, happy to hear that you like my videos. If any one of them brings up new questions or topics for me to cover in a future video, don't hesitate to share 😉

@leewright8683 6 ай бұрын

Hi Tom, great video. Thanks for uploading. Can I ask a question. I work in manufacturing, however we don't do mass production items, our batch sizes range from 1-50, and our product range being made at any one time could be 150. I am tracking OLE by capturing Availability x Performance, I am struggling to get a metric for Quality so I am not doing anything for this. I am tracking Availability as Utilisation (Availability / direct) x Attendance (i.e from a 5 day working week, No sick days = 100%, 1 day sick = 80%, 2 day sick = 60% etc. I am tracking Performance as Direct Time / Allocated time. Would this be a good way to manage employee performance or is there other measures I should be looking at. Would love to hear your thoughts, I always find anything to do with OLE is aimed at mass produced items on a production line i.e ready meal food / Cars etc but nothing aimed at the production qtys or style myself and many others are working in.

@TomMentink 6 ай бұрын

Ask yourself if OLE should be your go-to measure - how standardised is your work? An alternative could be to use a system similar to Agile/Scrum, where you measure how many "points worth of work" your team finished per day/week. You can assign different point values to products (or even subtasks in their manufacturing) based on the expected time-spend of each product (much like a very product-specific line speed norm for OEE). Since you have allocated time, I assume that you've got these time estimates per product... You won't be measuring a percentage up to 100% this way, but increasing the "value delivered per week" can be just as, if not more, motivating. And you can have a weekly huddle to discuss how to boost productivity even more (or in other words: "how to get distractions out of your way and make sure you always have what you need to do your job as best you can") If you're tracking availability in worked days for individuals, I would just take the absenteeism rates per department and per person - HR probably keep those records already. For the actual vs planned manning per department, use exactly that: compare how many people are on the floor at the start of the shift vs how many people were planned in for the work that was planned.

@leewright8683 6 ай бұрын

Hi Tom, great response! Where can I find more information about the alternative system you mention? Thank you for your time and effort on this one.