💡 Key Learnings
OEE Reveals Where to Focus
OEE decomposes your losses into actionable categories: Low Availability? → Fix maintenance, changeovers, supply chain Low Performance? → Fix equipment speed, minor stops Low Quality? → Fix yield,...
Find and Fix Bottlenecks — Everything Else is Waste
Only the bottleneck limits your system. Investing in anything OTHER than the bottleneck = wasted money. Example: If ingredient station is your bottleneck at 80/hour, buying a faster bread slicer...
Learning Curves Are Your Trajectory
Rate of improvement matters more than current position. A company at 1M units can catch a competitor at 10M units IF they have: • Steeper learning curve • More capital to accumulate production...
Yield is Your Highest Leverage
Small yield improvements = huge profit impact. The economic impact goes beyond direct scrap costs: • Less inspection needed • Lower warranty costs • Better reputation • More capacity from same...
Understand Your Cost Structure
High fixed costs = great at scale, but high risk at low utilization. A factory running at 50% utilization doesn't have 50% profit — it likely has NEGATIVE profit because fixed costs spread over...
Capacity = Bottleneck (Fix only the constraint)
"Improving anything OTHER than the bottleneck doesn't improve the system." Capital deployment should follow the bottleneck. As you solve one constraint, the bottleneck shifts. Types: Nameplate...
OEE = Availability × Performance × Quality
Overall Equipment Effectiveness measures actual vs theoretical capacity. World-class OEE = 85%+, Most factories = 60% or below. Where to focus: • Low Availability → Fix maintenance,...
Wright's Law: Every 2x production = 20% cost reduction
Learning curves show that for every doubling of cumulative production, costs drop ~20%. Drivers: Labor efficiency, process optimization, yield improvement, design for manufacturing, supplier...
Yield Economics: 20-point advantage = $25/unit savings
70% yield means 43% cost premium vs 100% yield. Example: Factory A (70% yield) costs $114.29/good unit. Factory B (90% yield) costs $88.89/good unit. That 20-point yield advantage = $25.40...