OVERALL EQUIPMENT EFFECTIVENESS

Overall equipment effectiveness (OEE) is a term coined by Seiichi Nakajima in the 1960s to evaluate how effectively a manufacturing operation is utilized. ... OEEmeasurement is also commonly used as a key performance indicator (KPI) in conjunction with lean manufacturing efforts to provide an indicator of success.

The constraint piece of equipment or “bottleneck” of the value stream is the piece of equipment that is limiting the throughput of the entire value stream. The constraint may change over time once issues are resolved through waste elimination and continuous improvement projects. The objective is to continually improve the OEE rate for each piece of equipment.

OEE rates should not be used to compare dissimilar pieces of equipment.

OEE is used to identify issues in order to establish waste elimination and continuous improvement projects.

OEE is the measurement of equipment performance in terms of three elements: availability, performance rate and quality rate.

? Availability refers to the machine or cell being available for production when scheduled. The machine or cell is either producing or not producing due to mechanical failures, raw materials or operations team member issues.

? Performance takes into account speed loss, which includes all factors that cause a process to operate at less than the maximum possible speed. By comparing the actual cycle times or output against normal cycle times or output, OEE allows for a determination of how much production was lost by cycles that did not meet the plan.

? Quality focuses on identifying time that was wasted by producing a product that does not meet quality standards. By comparing the quantity of good output to total output, the percent of actual value added output is exposed.

IMPORTANCE OF BASE LINE DATA

The development of a TPM plan begins with documenting the baseline performance of the critical pieces of equipment within each of the value streams. This evaluation will include more than just the maintenance service provider; it should embrace all parts of the organization involved in the operation, maintenance and purchasing of the assets of the company. The most important benchmark for TPM is the Overall Equipment Effectiveness (OEE).

This measurement supports the primary objective of a TPM program, to optimize the equipment effectiveness. Baseline data provides the starting point from which to calculate improvements and it also provides the means to demonstrate to management that progress is made, money is saved and that productivity is affected in a way that improves the bottom line. Baseline data involves documenting as much current data on equipment as possible.

The current, or baseline, status shows management where the equipment was, where it is and where the trend patterns are pointing. Typical baseline data is quality information on the equipment, time data, maintenance downtime histories, setup times and procedures. Other documentation must include photos showing the physical condition of the equipment at the start of the program so they can be compared to similar photos after the TPM implementation.

OEE is the best way of measuring feedback and tracking performance.

AVAILABILITY= ( Net operating time – Available Losses)/ Net operating time

                       = Actual Running time/Net operating time

 Availability  – Refers to the machine or cell being available for production when scheduled. The machine or cell is either producing or not producing due to mechanical failures, raw materials or operations team member issues.

? Total Available Time – Is the total amount of time available in a day, 24 hours.

? Unscheduled Time – Is the time the piece of equipment is not scheduled for production, which includes the No Shift Operation Time and Planned Maintenance Time only.

? No Shift Operation Time – Refers to a shift or multiple shifts when a piece of equipment is not scheduled to operate based on customer demand. For example, if the customer takt time only requires a piece of equipment to run two shifts to meet their demand and third shift is not required to run, then the third shift would be removed from the formula. If a facility only operates on first shift, then the other two shifts would be removed from the formula.

Planned Maintenance Time – Refers to the preventative maintenance schedule that has been determined by the maintenance service provider team that include preventative maintenance items to be completed and the scheduled completion dates. By allowing planned maintenance time for the equipment,there is no penalty in the OEE calculation and the maintenance service provider personnel is given appropriate time to finish the needed work. The Planned Maintenance Time is removed as part of the Unscheduled Time versus a loss because there is no way to automate the process for planned maintenance like the other defined losses. The Planned Maintenance Time may change on a weekly basis due to the established schedule and fluctuations in the schedule. These fluctuations need to be reflected in the OEE calculation on the same weekly basis.

? The Net Operating Time – Is the total time the equipment is scheduled for production. It is the Total Available Time without the Unscheduled Time.

? The Availability Losses – Is the actual time the equipment is down for repairs or changeovers.

? Actual Running Time – Is the total time the equipment actually ran during the production time. Actual Running Time removes any Availability Losses including, but not limited to:

– Breakdown or Equipment Fault

– Setup / Adjustment

 – Operations Team Member Missing (absent, personal time, lunch, meeting, training, 5S activities)

 – Material Missing (parts, tools, fixtures, gauges)

– Startup Loss (time spent for startup to reach the right operating conditions, for example heating a furnace)

– Quality / Inspection (loss cycle time due to inspection activities)

 – Tool Change (piece of equipment stopped for a tool change)

Performance Rate = Planned Method Time/Actual Running time

? Performance – Takes into account speed loss, which includes all factors that cause a process to operate at less than the maximum possible speed. By comparing the actual cycle times or output against normal cycle times or output, OEE allows for a determination of how much production was lost by cycles that did not meet the plan.

Note: Performance Rate is limited to 100%

? Actual Output – Is the amount of output produced during the Actual Running Time, where output could be pieces, feet, inches, pounds or other depending on the operation.

? Planned Method Time – Is the amount of time it would take a piece of equipment to produce a specific amount of output if it operated at its designed speed during the Actual Running Time, where output could be pieces, feet, inches, pounds or other depending on the operation. Planned Method Time is determined by multiplying the Normal Cycle Time per Output by the Actual Output. Normal Cycle Time per Output is the time provided on the work order by the planning department.

? Normal Cycle Time – Is the total of all elements that occurs each cycle (floor to floor time).

QUALITY

Quality Rate = Good output/ Actual output

? Quality – Focuses on identifying time that was wasted by producing a product that does not meet quality standards. By comparing the quantity of good output to total output the percent of actual value added output is exposed.

? Actual Output – Is the amount of output produced during the Actual Running Time, where output could be pieces, feet, inches, pounds, or other depending on the operation.

? Good Output – Is the amount of good, sellable output that was produced during the Actual Running Time, where output could be pieces, feet, inches, pounds or other depending on the operation.

REMINDER 1: Actual Running Time = Net Operating Time – Availability Losses

Planned Method Time = Normal Cycle Time per Output x Actual Output

REMINDER 2: If the Actual Running Time is continually over or under the Planned Method Time, the issue needs to be investigated. If the Normal Cycle Time is believed to be incorrect, then the issue needs to be fed back to the planning department for review. Planned Method Time Actual Running Time Good Output Actual Output.

The real value that comes from utilizing OEE to monitor equipment performance is the specific data generated by the process. This data is structured to prioritize activity and resources to minimize or eliminate the causes of loss using a Pareto Analysis. The Pareto Analysis is an effective means of communicating and visually displaying the major causes of loss associated with the process. Specifications must be generated, tracked and executed to target the largest causes of loss. This continuous improvement activity establishes a process to systematically generate and sustain improvements to machine performance measured via the OEE metric. It also legitimizes and reinforces the culture transformation that occurs as TPM becomes the standard asset management method within the company’s lean strategy.

OEE EXAMPLE

Availability

Net Operating Time = 8 hours per shift x 60 minutes per hour = 480 minutes per shift

minus Planned Maintenance @ 30 minutes.

Total Availability = 480 - 30 = 450 minutes per shift = 1,350 min per day = N

Availability Losses = changeover time of 145 minutes plus loose sensor of 40 minutes plus lunch break of 30 minutes plus 15 minutes operations team member left station.

Availability Losses =145 + 40 + 30 + 15 = 230 minutes = D

A = N - D/N

A = ((1,350 minutes - 230 minutes) / 1,350 minutes) x 100% = 82.9%

Performance Rate

Planned Method Time = 60 parts per hour = 1 minute per part = PM

Actual Output = 1,000 parts per day = AO Net Operating Time = 1,350 min per day = N (from above) Availability Losses = 230 minutes = D (from above)

P = (PM*AO) / N-D

P = ((1 minute per part x 1,000 parts) / 1,120 minutes) x 100% = 89.3%

Speed Loss of 120 minutes

Quality Rate

Production Input = Actual Output = 1,000 parts = AO

Quality Defects = 10 parts = QD

Q = AO - QD/ AO

Q = ((1,000 parts-10 parts) / 1,000 parts) x 100% = 99.0%

OEE = A x P x Q = 82.9% x 89.3% x 99.0% = 73.3%

THE NINE MAJOR LOSSES

TPM identifies nine categories of major losses that impede the effectiveness of equipment. A loss can be defined as a detriment, disadvantage or deprivation from optimum entitlement performance. The nine major losses are:

1. Breakdown-Machine failure

2. Setup / Machine Adjustment

3. Inspection / Quality

4. Material Missing

5. Operations Team Member Missing

6. Tool Change

7. Startup Loss

8. Other-Miscellaneous

9. Speed Loss

? Breakdown Losses – This loss occurs when the machine fails and becomes incapable of continuing to produce. Machine failures fall into two broad categories:

– Sporadic: An inconsistent, unplanned and unusual occurrence that decreases performance from the actual equipment effectiveness.

– Chronic: A condition or breakdown that occurs multiple times, it creates a difference between the actual equipment effectiveness and the optimal effectiveness.

? Setup / Machine Adjustment – This loss occurs when the equipment is being changed from one product  to another or requires adjustment during the process to maintain a part that meets acceptable quality requirements.

During setups, if a machine is repeatedly waiting for tooling or other items, it is indicative of lack of planning. While this could be identified as a missing material loss, tracking it as a set-up loss may help highlight it as a larger planning issue that needs to be resolved in order to expedite set-ups and improve the machine availability.

Adjustments take place while trying to produce a quality part.

Inspection / Quality – This loss occurs when inspection processes are required and the time required performing them negatively effects the ideal cycle time of the equipment. This loss category is specifically to accumulate the lost cycle time associated with this activity. It is specifically not intended to account for the lost cycle time associated with producing a non-conforming part. In the OEE calculation, non-conforming parts are accounted for in the quality rate which compares the percentage of nonconforming parts to total parts produced.

Maintenance related quality problems can be divided into two broad categories:

1. Habitual defects – Caused by equipment operating with some deterioration that has come to be accepted as normal operation.

2. Occasional defects – Caused by some apparent malfunction or problem that has suddenly developed.

Examples of habitual defects would be constantly:

– Trimming off excess material from a part because the die is not sharp.

– Re-drilling a hole because the plug will not fit inside the hole.

– Having one part out of the set that consistently needs to be reworked.

This could eventually become accepted as part of the equipment’s normal operation. Occasional Defects come suddenly. A bolt could be loose in a fixture,which causes the defect. Loss of air pressure could cause the same problem. Because of the sudden impact of an occasional defect, they normally get resolved quickly.

Any reduction to the ideal cycle time of the equipment that results from increased inspection required to monitor either type of quality defect should be accumulated and reported against this loss category.

? Material Missing – This loss occurs when the equipment stops for a few minutes or sits idle due to material not being available at the work station. Eliminating these losses should be a high priority because improving the planning process should involve little or no cost.

? Operations Team Member – This loss occurs when equipment stops for a few minutes or sits idle because the operations team member is not at their workstation. Operations team members and facility leadership must work together to reduce or eliminate this loss.

Startup – This loss occurs each time the equipment or process must be shutdown and restarted. These losses sometimes also result in the production of unacceptable product while the equipment reaches certain operating parameters such as temperature or speed. These also may involve reworking or scrapping one or multiple parts. Make sure that the start-uptime (lost ideal cycle time) associated with producing a quality part is not duplicated by considering the items produced during this same time as defective pieces within the quality rate portion of the OEE calculation.

? Tool Change – This loss occurs when the equipment is being changed from one tool to another. The tool may be broken or worn out. This problem is normally found after a setup.

? Other: Miscellaneous – This loss occurs when unusual events (planned or unplanned) occur. The time lost for these events should be captured under miscellaneous time losses. Examples: non-regular meetings, power failures, fire or other emergency evacuations or drills, etc. Miscellaneous time losses should not be used as a “catch all” for the losses that result from a lack of planning, poor work habits or other preventable causes.

Miscellaneous time losses should be used only for truly unusual events that are generally not preventable by the production floor employees. These are normally non-controllable events.

? Speed losses –This loss occurs when the process is not being run to the ideal cycle time rate or, in the case of a process with multiple cavity output for each machine cycle, a less than ideal output (i.e. seven cavities of eight possible cavities) is produced with every machine cycle.

Unlike the other losses, this loss is not something that an operations team member tracks and reports. This loss is a mathematical calculation that results from a comparison of the actual time used to produce a specific level of output to the ideal cycle time that should have been necessary to produce that same level of output.

OVERALL EQUIPMENT EFFECTIVESS

Availability

·        Breakdown

·        Setup/Adjustment

·        Startup

·        Tool Change

·        Material Missing

·        Operation Team member missing

·        Inspection

·        Miscellaneous

Performance

·        Speed Losses in minutes

Quality Rate

·        Scrap

·        Rework

Eliminating losses will generate a huge return. Because of losses a company may add shifts, add equipment and / or add labor to counter the elevated problem. This is not the best solution because the cost of the product must go up to pay for these solutions. The increased cost negatively affects price or company profits. This could result in lost business or the inability to gain new business. A better approach is to eliminate losses. By doing so, capacity is increased, quality and performance are improved and the business can ultimately grow.