Performance / OEE
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Introduction Video
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Six Big Losses
EQUIPMENT FAILURE
Equipment Failure accounts for any significant period of time in which equipment is scheduled for production but is not running due a failure of some sort. A more generalized way to think of equipment failure is as any unplanned stop or downtime. Equipment failure is an Availability Loss.
Examples of common reasons for equipment failure include tooling failure, breakdowns, and unplanned maintenance. From the broader perspective of unplanned stops, other common reasons include no operators or materials, being starved by upstream equipment or being blocked by downstream equipment.
There is flexibility on where to set the threshold between equipment failure (an Availability Loss) and a minor stop (a Performance Loss). A good rule of thumb is to set that threshold based on your policy for tracking reasons. For example, your policy might be that any downtime longer than two minutes should have a reason associated with it – and thus shall be considered equipment failure.
SETUP AND ADJUSTMENTS
Setup and Adjustments accounts for any significant periods of time in which equipment is scheduled for production but is not running due to a changeover or other equipment adjustment. A more generalized way to think of Setups & Adjustments is as any planned stop. Setup and Adjustments is an Availability Loss.
Examples of common reasons for Setup and Adjustments include setup, changeovers, major adjustments, and tooling adjustments. From the broader perspective of planned stops, other common reasons include cleaning, warmup time, planned maintenance, and quality inspections.
The largest source of Setup and Adjustment time is typically changeovers (also referred to as make ready or setup), which can be addressed through a SMED (Single-Minute Exchange of Dies) program.
IDLING AND MINOR STOPS
Idling and Minor Stops accounts for time where the equipment stops for a short period of time (typically a minute or two) with the stop resolved by the operator. Another name for Idling and Minor Stops is small stops. Idling and Minor Stops is a Performance Loss.
Examples of common reasons for Idling and Minor Stops include misfeeds, material jams, obstructed product flow, incorrect settings, misaligned or blocked sensors, equipment design issues, and periodic quick cleaning.
This category usually includes stops that are well under five minutes and that do not require maintenance personnel. The underlying problems are often chronic (same problem/different day), which can make operators somewhat blind to their impact. Most companies do not accurately track Idling and Minor Stops.
REDUCED SPEED
Reduced Speed accounts for time where equipment runs slower than the Ideal Cycle Time (the theoretical fastest possible time to manufacture one part). Another name for reduced speed is slow cycles. Reduced speed is a Performance Loss.
Examples of common reasons for reduced speed include dirty or worn out equipment, poor lubrication, substandard materials, poor environmental conditions, operator inexperience, startup, and shutdown.
This category includes anything that keeps the process from running at its theoretical maximum speed (a.k.a. Ideal Run Rate or Nameplate Capacity) when the manufacturing process is actually running.
PROCESS DEFECTS
Process Defects account for defective parts produced during stable (steady-state) production. This includes scrapped parts as well as parts that can be reworked, since OEE measures quality from a First Pass Yield perspective. Process defects are a Quality Loss.
Examples of common reasons for process defects include incorrect equipment settings, operator or equipment handling errors, and lot expiration (e.g., in pharmaceutical plants).
REDUCED YIELD
Reduced Yield accounts for defective parts produced from startup until stable (steady-state) production is reached. This includes scrapped parts as well as parts that can be reworked, since OEE measures quality from a First Pass Yield perspective. Reduced Yield can occur after any equipment startup, however, it is most commonly tracked after changeovers. Reduced Yield is a Quality Loss.
Examples of common reasons for Reduced Yield include suboptimal changeovers, incorrect settings when a new part is run, equipment that needs warmup cycles, or equipment that inherently creates waste after startup (e.g., a web press).
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SIMPLE CALCULATION OF EFFICIENCY
The simplest way to calculate OEE is as the ratio of Fully Productive Time to Planned Production Time. Fully Productive Time is just another way of saying manufacturing only Good Parts as fast as possible (Ideal Cycle Time) with no Stop Time. Hence the calculation is:
OEE = (Good Count × Ideal Cycle Time) / Planned Production Time
Although this is an entirely valid calculation of OEE, it does not provide information about the three loss-related factors: Availability, Performance, and Quality. For that – we use the preferred calculation.
PREFERRED CALCULATION
The preferred OEE calculation is based on the three OEE Factors: Availability, Performance, and Quality.
OEE is calculated by multiplying the three OEE factors: Availability, Performance, and Quality. Availability
Availability takes into account all events that stop planned production long enough where it makes sense to track a reason for being down (typically several minutes).
Availability is calculated as the ratio of Run Time to Planned Production Time:
Run Time is simply Planned Production Time less Stop Time, where Stop Time is defined as all time where the manufacturing process was intended to be running but was not due to Unplanned Stops (e.g., Breakdowns) or Planned Stops (e.g., Changeovers).
Performance
Performance takes into account anything that causes the manufacturing process to run at less than the maximum possible speed when it is running (including both Slow Cycles and Small Stops).
Performance is the ratio of Net Run Time to Run Time. It is calculated as:
Ideal Cycle Time is the fastest cycle time that your process can achieve in optimal circumstances. Therefore, when it is multiplied by Total Count the result is Net Run Time (the fastest possible time to manufacture the parts).
Since rate is the reciprocal of time, Performance can also be calculated as:
Performance = (Total Count / Run Time) / Ideal Run Rate
Performance should never be greater than 100%. If it is, that usually indicates that Ideal Cycle Time is set incorrectly (it is too high).
Quality
Quality takes into account manufactured parts that do not meet quality standards, including parts that need rework. Remember, OEE Quality is similar to First Pass Yield, in that it defines Good Parts as parts that successfully pass through the manufacturing process the first time without needing any rework.
Quality is calculated as:
This is the same as taking the ratio of Fully Productive Time (only Good Parts manufactured as fast as possible with no Stop Time) to Net Run Time (all parts manufactured as fast as possible with no stop time).
OEE
OEE takes into account all losses, resulting in a measure of truly productive manufacturing time. It is calculated as:
OEE = Availability × Performance × Quality
If the equations for Availability, Performance, and Quality are substituted in the above and reduced to their simplest terms the result is:
OEE = (Good Count × Ideal Cycle Time) / Planned Production Time
This is the “simplest” OEE calculation described earlier. And, as described earlier, multiplying Good Count by Ideal Cycle Time results in Fully Productive Time (manufacturing only Good Parts, as fast as possible, with no Stop Time).
Why the Preferred OEE Calculation?
OEE scores provide a very valuable insight – an accurate picture of how effectively your manufacturing process is running. And, it makes it easy to track improvements in that process over time.
What your OEE score doesn’t provide is any insights as to the underlying causes of lost productivity. This is the role of Availability, Performance, and Quality.
In the preferred calculation you get the best of both worlds. A single number that captures how well you are doing (OEE) and three numbers that capture the fundamental nature of your losses (Availability, Performance, and Quality).
Here is an interesting example. Look at the following OEE data for two sequential weeks.
OEE Factor Week 1 Week 2 OEE 85.1% 85.7% Availability 90.0% 95.0% Performance 95.0% 95.0% Quality 99.5% 95.0% OEE is improving. Great job! Or is it? Dig a little deeper and the picture is less clear. Most companies would not want to increase Availability by 5.0% at the expense of decreasing Quality by 4.5%.