Overall Labor Effectiveness (OLE) is Working
In last month’s blog, we discussed the OLE (Overall Labor Effectiveness) tracking program we began implementing recently at Semco. Efficiency in graphite manufacturing, as in any manufacturing business, is crucial to our bottom line and to our ability to serve our customers well. By eliminating waste when we machine our clients’ custom graphite components, we save them money on materials costs and get these components to our customers more quickly. The program also helps our managers determine where more training is required on the shop floor and what parts of the manufacturing process are producing unnecessary scrap. OLE is the most thorough program we’ve ever implemented at Semco for identifying and addressing inefficiencies.
So how are we doing so far? Well, we have been monitoring data month to month and adjusting our goals, and have observed very good trends. For instance, we found that the scrap rate over the past month has been the lowest in the history of our shop, at 0.17%. That is an amazing number for a graphite manufacturing shop, and it proves that the system is working. To really understand how OLE works, you have to look at the nitty gritty of what happens on the shop floor. It is, of course, our employees there who are doing the exceptional work that achieved this unprecedented scrap rate. What we have noticed is that all team members are buying into the program. We see our employees, for instance, maximizing their time by running multiple jobs (cycle times allowing). Another efficiency-enhancing behavior we see in our shop floor employees is that they are paying extra attention to set-ups and first articles. In other words, before they run a job, they are being deliberate in setting the machines precisely and preparing the material for that job so that the custom graphite component being machined is done right on the first run. Material, and time, is saved when they get the job done right the first time. And since we run a custom graphite manufacturing shop, every job is different and demands great attention to detail. Our employees cannot rely on routine and repetitive tasks to improve their efficiency ratings. That fact alone makes the scrap rate that our employees have achieved even more impressive.
As we explained last month, as extra motivation for our employees, we implemented, as part of OLE, an incentive program. It has proven a great success in the past 3 months that we have run it. Semco has awarded extra PTO to all shop employees for meeting, and often exceeding, the targets for effectiveness and scap rates. Our employees at Semco, just like our clients, know that they are valued. We strive to keep up the good work in the months, and years, ahead. Thanks to everybody for an excellent quarter, and an exceptional performance in the month of September.