Financial OEE: How to translate OEE correctly into Finance

Learn how to translate OEE correctly into currency

There are many examples on the Web about ‘What is the value of an OEE improvement’. None of them survive a controller check. Why is that?

1. Controllers have no idea how OEE is put together and cannot translate it correctly themselves either: So they are unlikely to raise an objection….
2. Mostly ratios are juggled (‘this much percent here we multiply by this much percent there…’). In similar situations, you then come pretty close, but of course that’s not how we handle money!

To begin with, we are going to learn how to make a correct -controller proof- calculation about the financial consequence is of a given OEE.

This morning the OEE of machine A was 56%. This afternoon, too.

How do you know if you generated as much value this morning as you did this afternoon?

For that you need to know from BOTH teams exactly what happened financially!

The Result we Guarantee:

• You will be able to translate your production data (as used to calculate your OEE) in a correct way into currency (€, $, …)
• You will be able, using your own data, making ‘What-If’ analyses; 
  • ‘Is it more profitable to reduce setups by x% or to reduce rejects by Y%?’
  • ‘What is the financial impact of increased preventive maintenance, assuming that X… and Y…’
  • ‘Would it make sense to deploy an additional operator (or shift) if it increases output by X%?’
• You will be able to find a way to generate at least 100,000€ more on one machine.

 If not:

You will receive free guidance to find out what went wrong and how to correct this in order to achieve the result!

For Whom is it?

1. You already have the correct production data available to calculate OEE in a correct way. (if not or not sure: do the OEE Review first)
2. You have a management that is supportive to improvement: thus Change!
3. You have access to basic financial data of at least óne machine to use as a study object.
4. You can spent a few hours per week work focussed on this course;
5. You are willing to learn on the job; working your way through the complete OEE-financial training.
6. You have the discipline to go the path until the result is there. (… And I’ll be there for you!)

What will you learn?

• Techniques to convert OEE data into Financial data;
• A way of looking, thinking and deciding, far different from what you have been used to;
• Finding ways to make your equipment generate at least 100K€.
• Understanding that (and how) generating money is completely different from ‘being cheap’

What problem will it solve?

1. Speaking the language of upper management.
2. Making choices and decisions based on facts and figures.
3. Being able to predict the financial consequences of investments, choices, cost cutting etc.
4. Finding your own budget based on plausible ROI calculations
5. No wasted money on wrong decisions and investments.