Hidden Factory - Increase Production - OEE

11/11/2018 Hidden Factory – Increase Production | OEE
Hidden Factory
WHAT IS THE HIDDE N FA CTORY?
The hidden factory represents the untapped capacity of your manufacturing plant – the
maximum amount of additional production that can be unlocked without capital investment.
Fully utilizing your hidden factory means around-the-clock perfect production – manufacturing
only good pieces, as fast as possible, with no downtime, every hour of every day.
The term “hidden factory” was popularized by Armand Feigenbaum in the late 1970’s.
Feigenbaum’s concept of the hidden factory was primarily focused on quality, specifically the
waste and costs caused by “bad work”, much of which is “hidden” below the surface of day-to-
day operations.
Over time the concept of the hidden factory has broadened to include all waste in
manufacturing. In this page we explore the hidden factory from that broader perspective,
specifically focusing on the four areas of lost (or hidden) production potential from an
equipment perspective:
 Schedule Loss (time where production could be running – but is not scheduled)
 Availability Loss (time where production should be running – but is not)
 Performance Loss (time where production is running – but not as fast as it should)
 Quality Loss (time where production is running – but one or more pieces are not good the
first time through)
https://www.oee.com/hidden-factory.html 1/6
HOW B IG IS YOUR H I D D E N FA CTORY?
The untapped production potential in the hidden factory is typically very significant. Many
manufacturers are surprised to learn that they have more capacity in their hidden factory than
they are using in their actual factory.
The hidden factory represents all of the untapped production potential within your
current factory.
The fastest way to discover how much potential is in your hidden factory is to perform two very
simple calculations:
First, calculate your Fully Productive Time by multiplying Good Pieces by Ideal Cycle Time.
Fully Productive Time represents how close you are to perfect production - manufacturing only
good parts, as fast as possible, with no downtime.
Fully Productive Time is calculated by multiplying Good Pieces by Ideal Cycle Time.
 Good Pieces are pieces that pass through the manufacturing process the first time without
needing any rework.
 Ideal Cycle Time is the theoretically fastest cycle time your process can achieve under
optimal conditions.
Second, calculate your Hidden Factory by subtracting Fully Productive Time from All Time
(24/7). This Hidden Factory time represents the untapped capacity of your manufacturing
plant.
Your Hidden Factory is what is left after subtracting Fully Productive Time from All
Time.
The hidden factory takes into account all four types of lost time described earlier: Schedule
Loss, Availability Loss, Performance Loss, and Quality Loss. More on that in the next section.
This hidden factory report generated by the XL Productivity Appliance™ shows a

breakdown of all four top-level losses that make up the hidden factory. As is
common for a one-shift or two-shift operation, the largest loss is Schedule Loss
(blue). However, as can be seen Performance Loss (orange) and Availability Loss
(green) are also significant.
WHERE IS YOUR HI D D E N FA CTORY?
To unlock the potential of your hidden factory it’s important to understand your losses – where
they occur in production. First make sure you are measuring losses that affect your
manufacturing constraint. Then understand how each loss factor impacts your hidden factory.
Some important tools are:
 TEEP (identifies losses due to time that is not scheduled for production)
 OEE (identifies losses during scheduled production time)
 Six Big Losses (provides more detail on losses during scheduled production time)
The following table shows the four major loss factors as described earlier, their impact on the
hidden factory, and the associated Six Big Losses.
Six Big
Loss Factor Impact on Hidden Factory
Losses
Schedule Time where production could be running but is not Does Not
Loss scheduled. Apply
 The largest component of the hidden factory for

most one- or two-shift operations.
 Typically addressed with overtime (short-term) or
additional staff (long-term) to defer capital
expenditures.
Availability Time where production should be running but is not.  Planned

Loss Stops
 The largest component of the hidden factory Unplanned

during scheduled production time for most Stops
companies.
 Two best practice techniques for unlocking
Availability Loss are SMED (for Planned Stops)
and TPM (for Unplanned Stops).
Performance Time where production is running but not as fast as it  Small

Loss should.
Stops
 Slow
 This is truly a hidden loss for many companies as it Cycles
is not nearly as visible as Downtime.
 Small Stops can be caused by misfeeds, material
jams, misaligned sensors, etc. Slow Cycles can be
caused by incorrect settings, worn equipment,
substandard materials, etc.
Quality Loss Time where production is running but one or more pieces  Production
are defective the first time through.
Rejects
 Startup
 Gets a lot of focus because of potential customer Rejects
impact, but usually has the smallest impact on the
hidden factory.
 Best practices for addressing include error-
proofing equipment and creating standardized
work instructions.
BENEFITS OF TAPPI NG I NTO YOUR H IDDEN

FACTORY
The most significant benefit of tapping into your hidden factory is that you can increase
throughput without additional capital expenditures. Simply put – making more with what you
already have. When you increase throughput, this enables three big benefits:
 Decreased Conversion Cost: Fixed costs are spread over more output (increasing
profitability).
 Increased Flexibility: Shorter production runs are possible, improving lead times and
reducing inventory.
 Deferred Spend: Increase throughput on existing assets and defer spending on new
equipment or facilities.
At the factory-floor level, tapping into your hidden factory can decrease overtime or eliminate
outsourced production. This benefit, though, is more in the realm of traditional OEE. What is
specifically unique about the hidden factory is that in addition to OEE Losses it also takes into
account Schedule Loss, which makes it an excellent tool for capacity planning:
 Improved Capacity Planning: Understand and take into account the untapped capacity of
your manufacturing plant when doing long-term capacity planning.
Vorne 1445 Industrial Dr., Itasca IL, 60143 USA +1.630.875.3600 [email protected]
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What is the hidden factory?

How can manufacturers calculate their hidden factory potential?

11/11/2018 Hidden Factory – Increase Production | OEE

WHAT IS THE HIDDE N FA CTORY?

 Availability Loss (time where production should be running – but is not)

HOW B IG IS YOUR H I D D E N FA CTORY?

This hidden factory report generated by the XL Productivity Appliance™ shows a

WHERE IS YOUR HI D D E N FA CTORY?

 OEE (identifies losses during scheduled production time)

 The largest component of the hidden factory for

Availability Time where production should be running but is not.  Planned

Performance Time where production is running but not as fast as it  Small

BENEFITS OF TAPPI NG I NTO YOUR H IDDEN

© 2002-2018 Vorne Industries Inc. All Rights Reserved Privacy Policy

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