Financial management software MERLIN FOEE

developmentqualityenterprise manufacturing intelligence

Manufacturing has seen many continuous improvement initiatives over the years. Lean, Six Sigma, Deming Cycle, and Hoshian Kanri, to name just a few, are all intended to help reach goals of improved quality and productivity. Many of these efforts have had mixed results for a number of cultural, tactical, business and technical reasons. They also leave the two most basic questions that any CxO or anyone in manufacturing management would like to know – “How well is / are my plant(s) running?” and “Am I making money?” Manufacturing management needs a proven methodology to determine the profit dollar value of their decisions, connecting the plant floor to the income statement in real-time. At MEMEX, we believe that if OEE is the gold standard for factory productivity, Financial Overall Equipment Effectiveness (FOEE) is the Holy Grail of manufacturing. Robert C. Hansen of R. C. Hansen Consulting LLC guided MEMEX’s FOEE software development effort. He is a worldwide thought leader and author on OEE and Financial OEE. Financial OEE can accurately quantify where a manufacturing company is making or losing money on a per part and per machine basis. The foundation for Financial OEE starts with OEE. OEE is availability multiplied by quality multiplied by performance. For example, world class OEE is 85% with each of the three factors being at 95%. While OEE is certainly an important metric, it tells management absolutely nothing about the financial side of manufacturing.