[Partial Preview:] Overall Equipment Effectiveness (OEE)

2. © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives 1. Understand the concept and philosophy of TPM and its relationship with OEE 2. Explain the importance of OEE and how it relates to value-adding work of the factory 3. Understand OEE concepts such as Availability, Performance, Quality and the Six Major Losses 4. Describe the steps of collecting and processing OEE data and reporting results 5. Define approaches for reducing equipment-related losses to raise OEE

3. © Operational Excellence Consulting. All rights reserved. 3 Outline Copyrights of all the pictures used in this presentation are held by their respective owners. Understanding Equipment-related Losses 2 Introduction to TPM and OEE 1 Improving OEE 4 Measuring OEE 3

4. © Operational Excellence Consulting. All rights reserved. 4 What is OEE? • Overall Equipment Effectiveness (OEE) is a measurement used in TPM to indicate how effectively machines are running • OEE is calculated from three underlying factors: § Availability § Performance § Quality • Each of these factors represents a different perspective of how close your manufacturing process is to perfect production

5. © Operational Excellence Consulting. All rights reserved. 5 What is OEE? • Availability § A comparison of the potential operating time and the time in which the machine is actually making products • Performance (Efficiency) § A comparison of the actual output with what the machine should be producing in the same time • Quality § A comparison of the number of products made and the number of products that meet the customer’s specifications OEE = Availability X Performance X Quality

6. © Operational Excellence Consulting. All rights reserved. 6 Why is OEE Important? • OEE is expressed as a percentage § It gives a complete picture of the machine’s “health” § Indicates not just how fast it can make parts but how much the potential output is limited due to lost availability or poor quality • Effectiveness focuses on the equipment, not the person • OEE measurement helps us to direct improvement efforts on the equipment or process

7. © Operational Excellence Consulting. All rights reserved. 7 OEE: An Indicator of Equipment Health Overall Equipment Effectiveness Availability Breakdowns Setups & Adjustments Performance Reduced Speed Minor Stops & Idling Quality Defects & Rework Startup & Yield Loss Six Big Losses Source: Japan Institute of Plant Maintenance (JIPM)

8. © Operational Excellence Consulting. All rights reserved. 8 Equipment Losses & OEE Six Big Losses Downtime Losses Quality Losses Speed Losses Fully Productive Time Net Operating Time Planned Production Time Operating Time Equipment Average total operating loss 30-50% Breakdowns Setups & Adjustments Reduced Speed Minor Stops & Idling Defects & Rework Startup & Yield Loss Breakdowns per machine (stopped longer than 10 mins) – less than once a month Setup/adjustment time – less than 10 mins Achieve ideal cycle times (design speed); increase 15% or more Minor stoppages and idling per machine – under 10 mins Rate (including products to be reworked) – less than 0.1% Startup yield – 99% or more of lot Ideal Cycle Time x Total Pcs Operating Time Good Pieces Total Pieces Operating Time Planned Production Time Availability Quality Performance Greater than 90% Throughput process - Greater than 99% Greater than 95% OEE Factors OEE = Availability x Performance x Quality Source: Adapted from ‘TPM for Supervisors’, Productivity Press Development Team

9. © Operational Excellence Consulting. All rights reserved. 9 Six Big Equipment Losses Breakdowns Setups & Changeovers Reduced Speed Idling & Minor Stoppages Defects & Rework Startup (Yield) Loss 6 Big Equipment Losses § Conveyors § Transport § Automatic welders § Presses § Paint processes § Molding machines § Machine tools § Presses § Transfer devices § Sensors § Automated assembly § Grinding § Presses § Seam welding § Raw material § Components § Fuel Frequent Sites Function Maintenance Manufacturing Inspection Technical services Production engineering Source: TPM Team Guide, Productivity Press Development Team

10. © Operational Excellence Consulting. All rights reserved. 10 Breakdown Losses • Largest of the six major equipment losses • Caused by equipment defects which require any kind of repair. Examples: § Tooling failures § Unplanned maintenance § General breakdowns § Equipment failure • Losses consist of downtime with labor and spare parts required to fix the equipment • Magnitude is measured by downtime

11. © Operational Excellence Consulting. All rights reserved. 11 Minor Stoppage Losses • Caused by events such as machine halting, jamming, idling, misfeeds, blocked sensors, etc. • Generally, these losses cannot be recorded automatically without suitable instruments • Formula: Losses = 100% - Performance Rate • Many companies regard such minor stoppages as breakdowns in order to emphasize their importance, even though no damage has occurred to the equipment

12. © Operational Excellence Consulting. All rights reserved. 12 Approaches for Eliminating Minor Stoppages Steps Hints 1. Get a clear idea of the loss Take a closer look at the losses from minor stoppages. See if you can express them numerically. 2. Take care of slight abnormalities Slight abnormalities in the product or the processing equipment (ones that may or may not cause trouble) should be looked at one by one and treated as real problems. 3. Analyze the current situation Observe the situation carefully and analyze it. Consider every condition you find, without worrying about how likely it is to cause trouble. 4. Investigate every factor; identify and treat all abnormal conditions Don’t be bound by previous criteria for judging what’s important. Analyze not only the malfunctions but also everything that might be a symptom as a malfunction. 5. Determine optimal conditions Don’t assume that machine or conveyor parts and units are currently attached and assembled in the most appropriate ways. Source: Focused Equipment Improvement for TPM Teams, by JIPM

13. © Operational Excellence Consulting. All rights reserved. 13 Steps for Dealing with Speed Loss Compare the specifications and the current state Pinpoint the problem areas Take measures against the problem areas Confirm the results Maintain optimal conditions Investigate the current state Investigate the process principles Investigate the equipment idle time •Failure records •Defect records •Cycle diagram •Vibration •Current value •Static precision Investigate past problems •Types of breakdowns and their handling •Shifts in the defect rate •Time series-type speed shift •Restore •Get rid of slight abnormalities •Modify equipment as needed to maintain conditions •Design specifications •Ideal Values •Manual for daily inspection standards •Manual for periodic inspection standards •Problems with the principles •Machining conditions Source: Focused Equipment Improvement for TPM Teams, by JIPM

14. © Operational Excellence Consulting. All rights reserved. 14 Quality Defect & Rework Losses • Caused by off-specification or defective products § Rework § Scrap • Losses consist of labor required to rework the products and the cost of the material to be scrapped • Measured by the ratio of quality products to total production • Sometimes designated as “quality defects in process” in order to distinguish from defective products during start-up and adjustment operations

15. © Operational Excellence Consulting. All rights reserved. 15 Ideas for Reducing Chronic Defects Ideas for Reducing Chronic Defects Look beyond the obvious • Don’t worry too much about what has the most influence • Think systematically and take measures against every abnormality Review all factors carefully • Think systematically about the form the defects took to understand what the factors are • Give all the possible reason for them Take abnormal conditions seriously • Quantify the abnormality • Use the inspection technology for your equipment to find signs of abnormal conditions Clarify the relationship between equipment and quality factors • Determine the proper condition for each component to produce a quality result • Manage the components according to those principles Monitor changes in the factors that need to be managed • Understand changes over time through examination, measurement, and spot checks • Determine treatment thresholds Source: Focused Equipment Improvement for TPM Teams, by JIPM

16. © Operational Excellence Consulting. All rights reserved. 16 Strategies for Zero Breakdowns • Restore equipment • Maintain basic equipment conditions • Adhere to standard operating procedures • Improve operator maintenance skills • Don’t stop at quick fixes • Correct design weaknesses • Study breakdowns relentlessly

17. © Operational Excellence Consulting. All rights reserved. 17 Measuring OEE Collecting OEE Data Processing OEE Data Reporting OEE Results • Define what to measure • Make data collection simple • The OEE calculation • Storing OEE data • Share OEE results • Use charts for visual impact

18. © Operational Excellence Consulting. All rights reserved. 18 1. Collecting OEE Data • Make data collection simple § The purpose of tracking OEE is not to make extra paperwork for operators § Most likely you are already a lot of the data required for the OEE calculation § One well-designed form can make it easy to log the OEE data as well as other data you need to register during daily production

19. © Operational Excellence Consulting. All rights reserved. 19 2. Processing OEE Data Availability = Operating Time / Planned Production Time Performance = (Ideal Cycle Time x Total Pieces) / Operating Time Quality = Good Pieces / Total Pieces OEE = Availability X Performance X Quality

20. © Operational Excellence Consulting. All rights reserved. 20 3. Reporting OEE Results • Sharing OEE information is critical for reducing equipment- related losses • Operators – the people who are closest to the equipment – need to be aware of OEE results • Reporting OEE information on charts in the workplace is key to improving future results

21. © Operational Excellence Consulting. All rights reserved. 21 Discussion Questions on OEE 1. Is it practical to use OEE as a regular measurable? 2. Should OEE number be as high as possible? 3. Is it possible to have OEE higher than 100%? 4. Should you deduct certain periods (e.g. meetings, planned maintenance) when counting available time?

22. © Operational Excellence Consulting. All rights reserved. 22 Improving OEE • We measure OEE to monitor the condition of the equipment • The purpose of measuring OEE is to drive improvement • Sustained improvement requires a dedicated approach, with management support

23. © Operational Excellence Consulting. All rights reserved. 23 Improvement Goals for the 6 Big Losses Type of Loss Goal Explanation 1. Breakdowns 0 Should be zero for all equipment 2. Setups and adjustments minimize As short as possible; less than 10 mins with zero adjustments 3. Reduced speed 0 Should match or – with improvements – exceed equipment specifications 4. Minor stoppages 0 Should be zero for all equipment 5. Defects and rework 0 Extent may vary, but goal should be expressed in parts per million (ppm) 6. Startup loss minimize Source: TPM for Every Operator, Productivity Press Development Team

24. © Operational Excellence Consulting. All rights reserved. 24 Approaches to Improving OEE 1. 5 Why Analysis 2. Autonomous Maintenance 3. Focused Equipment & Process Improvement 4. Quick Changeover 5. Poka Yoke (Mistake-Proofing) 6. P-M Analysis

25. © Operational Excellence Consulting. All rights reserved. 25 5 Whys Analysis – Example 1 Why? Answer 1 Why is there oil on the floor? Oil leaks from the cylinder rod when activated. 2 Why did oil leak? The O-ring was cut. 3 Why was the O-ring cut? The rod was flawed. 4 Why was the rod flawed? Dirt in the oil abrades the rod. 5 Why did dirt get in the oil? There are holes and gaps on the upper plate of the tank. Source: OEE for Operators, Productivity Press Development Team

26. © Operational Excellence Consulting. All rights reserved. 26 The Three Stages of SMED Before SMED Internal and external setup not differentiated Stage 1 Separate internal & external setup Stage 2 Convert internal setup to external setup Stage 3 Streamline all aspects of setup

27. © Operational Excellence Consulting. All rights reserved. 27 Improving OEE through Kaizen Event Focused Improvement Source: TPM Team Guide, Productivity Press Development Team 1. Set TPM Targets 2. Form a Team & Collect Data 3. Analyze Breakdowns & Suggest Improvements 4. Track & Record Performance 5. Achieve & Verify Targets 6. Report Results & Recognize Team

28. © Operational Excellence Consulting. All rights reserved. 28 The 8 Steps of P-M Analysis Identify Constituent Conditions 3 Conduct a Physical Analysis 2 Clarify the Phenomenon 1 Study 4Ms for Causal Factors 4 Determine Abnormalities to be Addressed 7 Survey Causal Factors for Abnormalities 6 Establish Optimal Conditions (Standard Values) 5 Propose and Make Improvements 8 Source: Based on Kunio, et al.

29. © Operational Excellence Consulting. All rights reserved. 29 How to Sustain TPM & OEE • Engaging employees • Aim for early success • Providing active leadership • Share success stories • Rewards and recognition • Continuously improve OEE • Evolving the TPM initiative over time and integration with Lean

30. © Operational Excellence Consulting. All rights reserved. 30 Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg

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