Overall Equipment Effectiveness

OEE - sweating manufacturing assets against the clock

to maximise the output of prime quality product

© Shire Systems Limited

This slideshow will briefly cover…

Overall Equipment Effectiveness & the

OEE metric
The Six Big Losses
The ‘Hidden Factory’
Theory of Constraints - manufacturing
bottlenecks & pinchpoints

It’s purpose is to merely place things in context.

Further reading is required for an in-depth
understanding of OEE

© Shire Systems Limited

OEE fundamentals
OEE is data driven

Good data collection and analysis are key

requirements for a successful OEE project

© Shire Systems Limited

OEE fundamentals
OEE is data driven

Good data collection and analysis are key

requirements for a successful OEE project

If you can’t put a number on

it, you can’t measure it –
and, if you can’t measure it,
you can’t manage it!

© Shire Systems Limited

OEE fundamentals
OEE is data driven

Good data collection and analysis are key

requirements for a successful OEE project

…plus, if you’re not

keeping score, you’re
only practicing!

© Shire Systems Limited

OEE fundamentals
Manufacturing assets must be sweated!

Manufacturing equipment must run

flat out at face plate rating – with
vertical start-ups and shutdowns,
minimal stops and no defects in
production output

© Shire Systems Limited

OEE fundamentals
Manufacturing assets must be sweated!

Manufacturing equipment must run

flat out at face plate rating – with
vertical start-ups and shutdowns,
minimal stops and no defects in
production output

The only rest is when

the whistle blows…
© Shire Systems Limited
OEE fundamentals
Manufacturing assets must be sweated!

Manufacturing equipment must run

flat out at face plate rating – with
vertical start-ups and shutdowns,
minimal stops and no defects in
Beware of ‘twilight’ production output
production and
reworking

© Shire Systems Limited

OEE fundamentals
Manufacturing assets must be sweated!

Manufacturing equipment must run

flat out at face plate rating – with
vertical start-ups and shutdowns,
minimal stops and no defects in
production output
An IDEAL!
The world class
benchmark is 6 Sigma

© Shire Systems Limited

OEE fundamentals
Manufacturing assets must be sweated!

Manufacturing equipment must run

flat out at face plate rating – with
vertical start-ups and shutdowns,
minimal stops and no defects in
production output
3.4 defects
An IDEAL! per million
The world class ‘opportunities’
benchmark is 6 Sigma

© Shire Systems Limited

The OEE Metric

© Shire Systems Limited

The OEE metric
As far as capital manufacturing assets are
concerned…

Time is money!
Time ‘lost’ is money down
the drain
Time must be strictly
accounted for

© Shire Systems Limited

The OEE metric

OEE =
ACTUAL quantity of good products produced

Total quantity that COULD BE produced

*
* In the scheduled production time
(loading time)

© Shire Systems Limited

The OEE metric

OEE =
ACTUAL quantity of good products produced

Total quantity that COULD BE produced

*
* In the scheduled production time
(loading time)

COULD = without losses due to:

© Shire Systems Limited

The OEE metric

OEE =
ACTUAL quantity of good products produced

Total quantity that COULD BE produced

*
* In the scheduled production time
Resulting in LOW
• Output
(loading time)

COULD = without losses due to:

• Overall efficiency
• Yield
• First-time pass rate
• Quality
• OTIF delivery
(‘on time & in full’)

© Shire Systems Limited

The OEE metric

OEE =
ACTUAL quantity of good products produced

Total quantity that COULD BE produced

*
* In the scheduled production time
(loading time)

OEE is calculated
by measuring the
‘Six Big Losses’ 123456

© Shire Systems Limited

The Six Big Losses

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
Idling &
Minor Stoppages

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
d Idling &
Minor Stoppages
h

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
d Idling &
Minor Stoppages
h

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
‘Single Minute Setup & Adjustments

Exchange of Die’
3
d Idling &
Minor Stoppages
h

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
‘Single Minute Setup & Adjustments

Exchange of Die’
3
Benchmark : d Idling &
Minor Stoppages
Formula 1 h
pit stop!
4
Reduced Speed

5
Scrap & Rework

F1 workflow also used

to ‘turnaround’ Jumbo 6
jets and plan complex Startup Low Yield

surgical procedures
© Shire Systems Limited
The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
Idling &
Minor Stoppages

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
Idling &
Minor Stoppages

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
Idling &
Minor Stoppages

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
Idling &
Minor Stoppages

4
Reduced Speed

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
1
Equipment Failure

2
Setup & Adjustments

3
These are real killers – Idling &
Minor Stoppages
they combine insidiously
to trash production
4
performance - and yet Reduced Speed
tend to be ‘accepted’

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses
Computerised
Maintenance Management 1
(CMMS) helps with this Equipment Failure

2
Setup & Adjustments

3
These are real killers – Idling &
Minor Stoppages
they combine insidiously
to trash production
4
performance - and yet Reduced Speed
tend to be ‘accepted’

5
Scrap & Rework

6
Startup Low Yield

© Shire Systems Limited

The Six Big Losses The OEE factors
1
Equipment Failure

Availability
2
Setup & Adjustments

3
Idling &
Minor Stoppages
Performance
Rate
4
Reduced Speed

5
Scrap & Rework

Quality Rate
6
Startup Low Yield

© Shire Systems Limited

The OEE Calculation

© Shire Systems Limited

OEE calculation

Overall Equipment Effectiveness =

Availability ² Performance Rate ² Quality Rate

© Shire Systems Limited

OEE calculation

Consider an example

Availability = 70%
Performance Rate = 80%
Quality rate = 90%

© Shire Systems Limited

OEE calculation

Consider an example

Availability = 70%
Performance Rate = 80%
Quality rate = 90%

Then, OEE = 50%

© Shire Systems Limited

OEE calculation

Consider an example

In reality this is towards

Availability = 70% the lower limit – OEE
Performance Rate = 80% performance is generally
in the range 40% to 80%
Quality rate = 90%

Then, OEE = 50%

© Shire Systems Limited

OEE calculation

Consider an example

Availability = 70%
Performance Rate = 80%
Quality rate = 90%

Then, OEE = 50%

This means that half the

built and maintained
factory isn’t contributing

© Shire Systems Limited

OEE benchmark targets - World Class

Batch processes > 85%

Continuous discrete processes > 90%
Continuous processes > 95%

Best petrochem sites achieve 99.9%

© Shire Systems Limited

OEE benchmark targets - World Class

Batch processes > 85%

Continuous discrete processes > 90%
Continuous processes > 95%

1st tier suppliers to major

Best petrochem
companies sites achieve
are obliged 99.9%
to
maintain a minimum OEE level
as a condition of contract

© Shire Systems Limited

 8 hour shift with half
OEE calculation example hour break = 7½
production hours

Equipment
Equipment 66‘Big
‘BigLosses’
Losses’ Calculation
Calculationof
ofthe
theOEE
OEE
1
Equipment Availability = calendar time - downtime ° 100
Failure/Shutdown calendar time
Calendar Time for example:
Availability = 460 mins - 60 mins ° 100 = 87%
2
460 mins
Production Setup &
Adjustment
Downtime Losses

Operating 3
Time Idling & Performance = theoretical cycle time ° produced amount ° 100
Minor Stoppages Rate operating time
for example:
Performance = 0.5 mins/unit ° 400 units ° 100 = 50%
4
Speed Losses

Rate 400 mins

Net Reduced Speed
Operating
Time
5
Defects in Production Quality Rate = produced amount - defect amount ° 100
produced amount
Defect Losses

for example:
Valuable Quality Rate = 400 units - 8 units ° 100 = 98%
6
Operating Reduced Yield
400 units
Time

OEE
Overall Equipment Effectiveness = Availability ² Performance Rate ² Quality Rate
for example:
0.87 ° 0.50 ° 0.98 ° 100 = 42.6%
Ref: Nakajima, 1984
© Shire Systems Limited
The Hidden Factory

© Shire Systems Limited

The Hidden Factory!
OEE can quickly reveal the size of the ‘hidden factory’…

© Shire Systems Limited

The Hidden Factory!
OEE can quickly reveal the size of the ‘hidden factory’…

If the OEE is 50%,

half the ‘factory’
isn’t contributing…

© Shire Systems Limited

The Hidden Factory!
…but still
consumes
resources

© Shire Systems Limited

The Hidden Factory!
…which still consumes resources

© Shire Systems Limited

The Hidden Factory!
…which still consumes resources

© Shire Systems Limited

The Hidden Factory!

© Shire Systems Limited

The Hidden Factory!

BIG burden!
NO production!

© Shire Systems Limited

OEE and the Theory of Constraints

OEE must be applied to manufacturing

bottlenecks & pinchpoints – not in
general like with Kaizen
Define the hierarchy of critical
processes and bottlenecks and attack in
priority order
As with RCM, beware of ‘analysis
paralysis’ - just get on with it! – a bias
for action is needed

© Shire Systems Limited

OEE and the Theory of Constraints
Attacking the Points of Constraint – the manufacturing bottlenecks &
pinch points - to maximise performance
Focused OEE projects

Achievable
manufacturing
performance
Performance
Manufacturing
performance Conventional continuous
gap improvement initiative

Present
manufacturing
performance Time
Do nothing
– the suicide scenario!

© Shire Systems Limited

OEE and the Theory of Constraints
Attacking the Points of Constraint – the manufacturing bottlenecks &
pinch points - to maximise performance

Achievable
manufacturing
performance
Performance

Present
manufacturing
performance Time

Top ranked
bottleneck
FIRST!
© Shire Systems Limited
OEE and the Theory of Constraints
Attacking the Points of Constraint – the manufacturing bottlenecks &
pinch points - to maximise performance

Achievable
manufacturing
performance
Performance

It’s not
Present rocket science.
manufacturing
performance Get going!
Time

Top ranked
bottleneck
FIRST!
© Shire Systems Limited
<End>

© Shire Systems Limited