OE 3 Process “Overall Equipment Effectiveness Enhancement”

1. OE3 Process “Overall Equipment Effectiveness Enhancement”

2. Background OE3 • Gap between engineered standard – perceived standard & actual productivity • Based upon current observations, most manufacturers perform at 80% of their standard • 80% is of perceived not engineered standard • Actual productivity is between 60-65% of engineered standard

3. OE3 Productivity Measurement • Productivity can be measured in many ways (pieces per minute, pieces per hour, pieces per shift, runtime, downtime, tons per shift, tons per day, etc.) • All these Measurables are helpful and all can be misleading

4. OE3 Productivity Measurement • Overall Equipment Effectiveness (OEE) • OEE is made up of three components • Performance – speed, SPM, GSPH, etc. • Availability – uptime, downtime, break time, runtime, etc. • Quality – good parts, bad parts, scrap

5. What is OE3? • It is a top down and bottom up structured process that AFCo uses at a customer facility designed to improve operational efficiencies. • Management driven • The process is highly flexible & incorporates the following AFCo capabilities: • Equipment expertise • Continuous Improvement Experiences • Project Management Methodology • Team Process • Fresh set of eyes • A new look at your equipment and processes

6. Concept of OE3 • OE3 is designed to compliment existing continuous improvement systems • Incorporates existing improvement ideas • No disruption of existing teams or processes • Utilizes short term (4-6 month) cross-functional teams with a targeted goal and event timeframe • Team resources matched to your operation • Events are integrated with equipment access • Can be used for large improvements or to assist in incremental improvements

7. Basic phases of OE3 • On-site Customer Assessment • Leadership Team • Measurement Team • Improvement Team • Event I • Evaluation/Homework • Event II • Leadership Wrap Up

8. Keys for a Successful OE3 Event • The event must have the full backing, support and involvement of senior level management • Goals must be clearly defined. What do you want to accomplish with this event? • Involvement from all levels throughout the entire event: maintenance, operators, supervisors, outside specialists, etc. • The three aspects of OEE must be addressed to achieve the necessary improvements. • Follow-up and use of visible measurables are necessary to maintain the improvement

9. OE3 Team Process Begins with Leadership • Recognition of underutilized equipment or process • Have a desire to obtain improvement in equipment or process performance – not happy with status quo • Sufficient upper level management interest to conduct a Kaizen event to improve overall performance • Positive attitude that improvement is possible • Management must recognize that overall performance can only be enhanced by utilizing the team process • Use a leadership team approach to lead the process and follow-up

10. Two Part Assessment First Part - Opportunity • Using your data, we will compare your current state (productivity) to what the engineered or possible future state would be.

11. First Part – Opportunity(continued)

12. Second Part - Environmental The environmental assessment is a highly subjective evaluation of an organization’s readiness to implement the OE3 process successfully. It is done over a 24 - 36 hour period with only a small sampling of input from a cross section of the organization’s personnel over all shifts. Based on the interviews and observations of the assessors general conclusions are drawn regarding the eight environmental parameters.

13. OE3 Proposal • After the two part assessment a formal proposal is provided • A full list of services will be outlined • Possible opportunities identified • Deliverables determined

14. Leadership Team • If customer feels the benefits of productivity improvement warrants our initiation of an OE3 program, a leadership team is organized based upon the corporation or plant leadership. This team would include AFCo and customer personnel.

15. Leadership Team • Leadership Team charges the Measurement Team to collect information which will assist the Leadership Team in setting goals along with an event timeline.

16. Measurement Team • The Measurement Team (normally made up of one or two customer supplied team members and an AFCo facilitator) either manually or assisted with a portable data collection device will gather and disseminate information that will be used to set goals for the Improvement Team(s).

17. Improvement Team • The Improvement Team is formed and given the information and tools necessary to work on the steps to improve productivity based upon goals from the Leadership Team.

18. Improvement Team • Improvement Team: • Event I: First of two kaizen events geared towards improving Productivity, Availability, Quality. Team members include: AFCo, the customer, customer suppliers. • Evaluation/Homework: An evaluation period to determine the effectiveness of the changes from Event I and to allow team members time to research additional opportunities for improvement. • Event II: The final kaizen event. • Leadership Wrap Up: A final report out of the results of the process.

19. OE3: Benefits to the customer • Increased focus on teamwork. • Completion of general maintenance items/equipment corrections. • Access to equipment specialists • Savings realized due to efficiency gains. • Can be orchestrated in conjunction with a normal preventative maintenance machine calibration visit.

20. OE3: Pilot Project • AFCo utilized test site to perfect the OE3 process from Sept 2007 to Feb 2008. • Results: • Test site reduced average Die Change time from 36 minutes to 13 minutes using team approach while eliminating several safety concerns. • Raised speed on 6 different high volume parts. • Pallet Change times on Side Out parts improved from 8 min. to 3.5 min. • Coil Change times improved from 13 min. to 7 min. with 3rd Operator.

21. OE3: Pilot Project (continued) • Results(continued): • Improved the automatic centering of pallets on the stacker • Reduced downtime by installing jam detection • Automatic ram settings on the press • Improved quality by installing interlock on the stacker • Improved line restart function • Run speed of 2/3 total parts by an increased average of 33% • $700k-$1M bottom line savings for 2008 based upon equal volume

22. OE3: Pilot Project(continued)Customer Comments • The Environmental Assessment that was conducted at the beginning of the process was very helpful in candidly assessing our weaknesses and exploring areas of improvement opportunity. • The OE3 Process engaged my team to set objectives and aggressively pursue them. • The structure provided by the OE3 facilitators was what we needed to organize our efforts and stay focused on our goals.

23. OE3: Pilot Project(continued)Customer Comments • We focused on the “culture” of the plant as much as the “process” to get our results. • Our measurement period is not over but I can already see concrete and sustainable improvement from the OE3 Process.