Turning insights into action
Facing the relentless push for efficiency, manufacturing organizations are under growing pressure to optimize performance, reduce costs and deliver consistently high-quality products. To meet these expectations, leading manufacturers are leveraging Overall Equipment Effectiveness (OEE) in conjunction with structured management tools like Safety, Quality, Delivery, Inventory and Productivity (SQDIP) boards. Together, these systems enable teams to monitor performance, drive continuous improvement and foster a culture of accountability and transparency across all levels of the organization. What is OEE? OEE is a gold-standard metric used to assess how effectively a manufacturing operation is utilized. It is a composite metric made up of three key components: Availability – Measures downtime losses. Performance – Measures speed losses. Quality – Measures defect losses. A perfect OEE score of 100 per cent indicates that a machine produces only good parts, as fast as possible, with no downtime. While this is rarely achievable, the goal of using OEE is not perfection but the identification and elimination of losses. Based on our extensive work with customers and their data, the reality is that most manufacturing organizations’ OEE scores are closer to 50 to 60 per cent, depending on how long they have been tracking OEE. So, while a world-class OEE score of 85 per cent and above is extremely desirable, most manufacturers are unlikely to achieve such results. That’s why companies should not focus on striving for 85 per cent as a minimum but rather set their sights on raising their OEE through specific improvements. Now that you’ve started collecting OEE data, what are you doing with it? How should it be managed? Our recommendation is to use daily huddles with SQDIP management boards. What is SQDIP? SQDIP stands for Safety, Quality, Delivery, Inventory and Productivity. It is a structured, visual management system that aligns daily activities with strategic goals. SQDIP boards are commonly used in tiered management meetings to monitor key metrics and encourage real-time decision-making. Each letter in SQDIP represents a core pillar of operational performance: Safety – Ensures a safe working environment and tracks incidents. Quality – Measures defects, rework, and process capability. Delivery – Tracks on-time delivery and schedule adherence. Inventory – Monitors raw material and finished goods levels. Productivity – Measures efficiency through KPIs like OEE. By combining OEE with SQDIP boards, companies can create a closed-loop system of performance monitoring and improvement.
Benefits of integrating OEE with SQDIP boards 1.Real-Time Visibility of Performance. One of the greatest strengths of using SQDIP boards in conjunction with OEE is real-time visibility. Teams can quickly identify underperforming areas by visually displaying OEE metrics and performance indicators under the Productivity section. With real-time data available during daily meetings, teams can: Identify trends or recurring issues. Make immediate decisions and take corrective actions. Maintain alignment across shifts and departments. 2. Structured Problem Solving. SQDIP boards encourage root cause analysis and structured problem-solving. When an issue is identified—such as a dip in OEE due to machine downtime—it is logged on the board. Teams are then encouraged to use tools such as 5 Whys or Fishbone Diagrams to identify and eliminate root causes. This systematic approach to problem resolution ensures issues are not only fixed but prevented from recurring. 3. Improved Communication and Accountability. Daily tiered huddles centered around SQDIP boards create a culture of open communication. Each department or cell presents their performance, including OEE data, and outlines actions taken to address any deviations. This transparency: Encourages team ownership of problems. Fosters collaboration across departments. Build a consistent feedback loop. Managers can quickly understand what’s working and where support is needed. 4. Focus on Leading Indicators. While traditional KPIs often focus on lagging indicators (like monthly output), SQDIP and OEE emphasize leading indicators. These provide early warning signs of potential problems. For example: A drop in performance (OEE) on a single line may predict late delivery (D in SQDIP). Increases in changeover time or minor stoppages can indicate future quality or availability issues. By catching these signals early, teams can proactively prevent bigger issues downstream. 5. Drives Daily Continuous Improvement (Kaizen). One of Lean manufacturing’s core tenets is Kaizen—continuous, incremental improvement. SQDIP boards support this philosophy by identifying improvement opportunities every day. Examples include: Standardizing work to reduce performance losses. Implementing quick changeover techniques to boost availability. Using OEE loss trees to guide Kaizen events. By reviewing daily metrics and tracking actions on SQDIP boards, improvements become habitual rather than sporadic. 6. Alignment of People, Processes and Purpose. Visual boards provide a common language that aligns cross-functional teams. Whether you’re an operator, supervisor, or plant manager, SQDIP provides clarity on what matters. Coupled with OEE data: Operators understand how their actions impact productivity. Maintenance teams prioritize based on high-impact issues. Leadership makes decisions based on real performance data. This alignment ensures that everyone is working toward the same goals and using the same data to get there. 7. Enhanced Standardization and Documentation. Using OEE within a visual management system promotes consistency. Over time, best practices are documented and shared, creating a standardized approach to improvement. These include: Documented standards for changeovers. Maintenance checklists to improve equipment availability. SOPs for addressing quality issues. As standards evolve, the SQDIP board becomes a living document of the organization’s best practices. 8. Motivation and Team Engagement. Seeing performance metrics like OEE displayed on SQDIP boards provides immediate feedback. Teams know where they stand and what they need to improve. When targets are met, it builds confidence. When they aren’t, it sparks problem-solving. This daily rhythm of review and action boosts morale, encourages team ownership and embeds a culture of excellence. OEE and SQDIP boards are more than just tools, they are cultural enablers. Together, they empower teams with real-time data, visual feedback and a structured problem-solving approach. This combination enhances communication, accountability and alignment, ultimately driving sustained improvements in productivity, quality and safety. Organizations that integrate OEE within the SQDIP framework are better equipped to face the challenges of modern manufacturing. By focusing on what matters every day and acting on it, they build a resilient, high-performing operation ready to compete and thrive.
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