LEAN Execution OEE

LEAN Execution "Defining Excellence: Solutions in real time time for real results" OEE is comprised of three factors: factors: Availability, Performance, Performance, and Quality. While calculating these these factors is fairly straightforward, straightforward, it is important important to recognize that that a standard definition definition for OEE does not exist. exist. It is important to understand the assumptions assumptions you are making to make sure that you understand the final OEE result. OEE measures how effectively TIME is used to produce a quality product. We have established the following definitions of TIME TIME to be used to calculate OEE: 1. Scheduled Production Time or Planned Production Time 2. Planned Down Time: Time: Scheduled down time time events 3. Unplanned Down Down Time: Unscheduled down down time events 4. NAT = Net Available Time (Scheduled Production Time - Planned Down Time) 5. NOT = Net Operating Time (Net Available Time - Unplanned Down Time) 6. IOT = Ideal Operating Time (Time to Produce All Parts at Rate) 7. LOT = Lost Operating Time Due to Production of Scrap or Non-Saleable Product. Although we will provide examples of these calculations, the following formulas are used to calculate each of the OEE factors and overall OEE: 1. Availability % = NOT / NAT * 100 2. Performance % = IOT / NOT * 100 3. Quality = (1 - (LOT / IOT)) * 100 OR Quality = (IOT - LOT) / IOT * 100 4. OEE = Availability Availability * Performance * Quality  You will notice that a quick way to check your OEE result is to calculate the time r equired to make good parts divided by the Net Available Time: (IOT - LOT) / NAT Calculating OEE: A real life example An 8 hour shift is scheduled to produce three parts as as shown in the schedule below. The shift has two 10 minute breaks and a 5 minute clean up period. period. Production Schedule: M/C: A Part #: A123, Cycle: 10 (seconds), Produced: 2240, SCRAP: 50, Unplanned Downtime: 32 minutes M/C: B Part #: B456, Cycle: 45 (seconds), Produced: 450, SCRAP: 25, Unplanned Downtime: 18 minutes M/C: C Part #: C789, Cycle: 70 (seconds), Produced: 229, SCRAP: 11, Unplanned Downtime: 22 minutes

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Calculating OEE Calculating OEE starts by calculating the Net Available Time, Net Operating Time, Ideal Operating Team, and Lost Operating Time as shown in the table below.

Machine Part Number Department A B C Totals

A123 B456 C789

Weld Assembly Assembly

Customer

Cycle Time Seconds

Paradigm ACME Paradigm

10 45 70

Production Time Report (Minutes) Unplanned Periods Downtime Breaks 25 32 25 18 15 22 65 72

Production  Time 480 480 360 1320

Quantity  Total Scrap Produced 2240 50 450 25 229 11 2919 86

Calculated Times (Minutes) NOT - Net IOT - Ideal LOT - Lost Operating Operating Operating 423.0 373.3 8.3 437.0 337.5 18.8 323.0 267.2 12.8 1183.0 978.0 39.9

NAT - Net Available 455.0 455.0 345.0 1255.0

VAT - Value Added 365.0 318.8 254.3 938.1

Now we can calculate the OEE for each process and for the shift. We will also calculate the weighted factors and overall equipment equipment effectiveness. Machine Part Number Department A B C Totals

A123 B456 C789

Notes 1 2 3 4

Weld Assembly Assembly

Customer Paradigm ACME Paradigm

Cycle Time Seconds 10 45 70

Availability (NOT / NAT) Process Weighted 93.0% 33.7% 96.0% 34.8% 93.6% 25.7% 94.3% 94.3%

1

Performance (IOT / NOT) Process Weighted 2 88.3% 31.6% 77.2% 28.5% 82.7% 22.6% 82.7% 82.7%

Quality (VAT / IOT) Process Weighted 97.8% 37.3% 94.4% 32.6% 95.2% 26.0% 95.9% 95.9%

3

OEE (A * P * Q) Process Weighted 80.2% 29.1% 70.1% 25.4% 73.7% 20.3% 74.7% 74.7%

4

OEE (VAT / NAT) Process Weighted 4 80.2% 29.1% 70.1% 25.4% 73.7% 20.3% 74.7% 74.7%

Formula to calculate weighted factors and Overall Equipment Effectiveness Weigh Weighted ted Avail Availabi abilit lity y = Avai Availab labili ility ty % * (Net (Net Avai Availab lable le Time Time / Total Total Net Availa Availabl ble e Time) Time)  The total weighted Availability is the SUM of the individual individual processes. Weigh Weighted ted Perfor Performan mance ce = Perfor Performan mance ce % * (Net (Net Oper Operati ating ng Time Time / Total Total Net Opera Operatin ting g Time) Time)  The total weighted Performance is the SUM of the individual processes. Weigh Weighted ted Quali Quality ty = Quali Quality ty % * (Idea (Ideall Opera Operatin ting g Time Time / Total Total Idea Ideall Opera Operatin ting g Time) Time)  The total weighted Quality is the SUM of the individual processes. Weig Weight hted ed OEE OEE = OEE OEE % * (Net (Net Avai Availa labl ble e Tim Time e / Tot Total al Net Net Avai Availa labl ble e Tim Time) e)  The total weighted OEE is the sum of the individual processes.

Note that the weighted OEE and factors are not simply arithmetic averages. We have calculated the averages for each of the factors as an extension of the example above to demonstrate this fact. Averages

94.2%

82.7%

95.8%

74.7%

74.7%

Using the data from the example above we can easily calculate the OEE for each department as shown in the table below:

Production Data and  Time Calculations by Department

Department Calculate Total Times for each Department. Note Quantities Quantities are shown shown for reference only. Weld Assembly Totals Department

OEE Calculated by Department

Weld Assembly Totals

Production Time Report (Minutes) Planned Planned Rest Unplanned Production Periods Downtime  Time (Breaks) 480 25 32 840 40 40 1320 65 72 Availability (NOT / NAT) Process Weighted 93.0% 33.7% 95.0% 60.6% 94.3% 94.3%

1

The OEE calculations suggest that the Assembly process is not as effective as welding.

Quantity  Total Produced 2240 679 2919

Performance (IOT / NOT) Process Weighted 2 88.3% 31.6% 79.6% 51.1% 82.7% 82.7%

Calculated Times (Minutes) Scrap

NAT - Net Available

NOT - Net Operating

IOT - Ideal Operating

LOT - Lost Operating

VAT - Value Added

50 36 86

455.0 800.0 1255.0

423.0 760.0 1183.0

373.3 604.7 978.0

8.3 31.6 39.9

365.0 573.1 938.1

Quality (VAT / IOT) Process Weighted 97.8% 37.3% 94.8% 58.6% 95.9% 95.9%

3

OEE (A * P * Q) Process Weighted 80.2% 29.1% 71.6% 45.7% 74.7% 74.7%

4

OEE (VAT / NAT) Process Weighted 4 80.2% 29.1% 71.6% 45.7% 74.7% 74.7%

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Using the same base base line data is possible for us to calculate calculate the OEE for each customer. When reviewing the the data note how the "weighted" "weighted" factors have changed. changed. Also note that the overall OEE remains remains the same.

Production Data and  Time Calculations by Customer

Customer Calculate Total Times for each Customer. Note Quantities are shown for reference only. ACME Paradigm Totals

Availability (NOT / NAT) Process Weighted 96.0% 34.8% 93.3% 59.4% 94.3% 94.3%

Customer OEE Calculated by Customer

Production Time Report (Minutes) Planned Planned Rest Unplanned Production Periods Downtime  Time (Breaks) 480 25 18 840 40 54 1320 65 72

ACME Paradigm Totals

1

Quantity

Calculated Times (Minutes)

 Total Produced

Scrap

NAT - Net Available

NOT - Net Operating

IOT - Ideal Operating

LOT - Lost Operating

VAT - Value Added

450 2469 2919

25 61 86

455.0 800.0 1255

437.0 746.0 1183

337.5 640.5 978.0

18.8 21.2 39.9

318.8 619.3 938.1

Performance (IOT / NOT) Process Weighted 2 77.2% 28.5% 85.9% 54.1% 82.7% 82.7%

Quality (VAT / IOT) Process Weighted 94.4% 32.6% 96.7% 63.3% 95.9% 95.9%

3

OEE (A * P * Q) Process Weighted 70.1% 25.4% 77.4% 49.3% 74.7% 74.7%

4

OEE (VAT / NAT) Process Weighted 4 70.1% 25.4% 77.4% 49.3% 74.7% 74.7%

The OEE calculations in this case suggest that the processes for Paradigm are more effective than ACME. What if we want to know what to focus on for the assembly operation or what if the customer only cares about their processes?  To calculate the OEE for Paradigm alone, we use the same process as in the previous examples. In the Customer example below, the weighted OEE and factors are based on ALL processes. PARADIGM OEE Calculations

Mach Machin ine e Part Part Numb Number er A C

A123 C789

Customer Calculate Total Times for all parts supplied to Paradigm Weld Assembly

Machine Part Number A C

A123 C789

Paradigm Paradigm Totals

10 70

Customer Weld Assembly

Paradigm Paradigm Totals

10 70

Production Time Report (Minutes) Planned Planned Rest Unplanned Production Periods Downtime  Time (Breaks) 480 25 32 360 15 22 840 40 54 Availability (NOT / NAT) Process Weighted 93.0% 33.7% 93.6% 25.7% 93.3% 59.4%

1

Quantity

Calculated Times (Minutes)

 Total Produced

Scrap

NAT - Net Available

NOT - Net Operating

IOT - Ideal Operating

LOT - Lost Operating

VAT - Value Added

2240 229 2469

50 11 61

455.0 345.0 800.0

423.0 323.0 746.0

373.3 267.2 640.5

8 .3 12.8 21.2

365.0 254.3 619.3

Performance (IOT / NOT) Process Weighted 2 88.3% 31.6% 82.7% 22.6% 85.9% 54.1%

Quality (VAT / IOT) Process Weighted 97.8% 37.3% 95.2% 26.0% 96.7% 63.3%

3

OEE (A * P * Q) Process Weighted 80.2% 29.1% 73.7% 20.3% 77.4% 49.3%

4

OEE (VAT / NAT) Process Weighted 4 80.2% 29.1% 73.7% 20.3% 77.4% 49.3%

It appears that the assembly process for Paradigm parts should should be improved compared to the welding operation. Focus should be applied to assembly performance performance from an efficiency perspective.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

If Paradigm is ONLY interested in how their processes are running, then the weighting of the OEE and factors should be c alculated for their process as shown in the table below. Note that the only change is the Weighted OEE. Comparing this table to the above weighted calculations, calculations, you can see how Paradigms processes contribute contribute to the overall OEE for the shift. Machine Part Number A C

A123 C789

Customer Weld Assembly

Paradigm Paradigm Totals

10 70

Availability (NOT / NAT) Weighted Process 93.0% 52.9% 93.6% 40.4% 93.3% 93.3%

1

Performance (IOT / NOT) Weighted 2 Process 88.3% 50.0% 82.7% 35.8% 85.9% 85.9%

Quality (VAT / IOT) Weighted Process 97.8% 57.0% 95.2% 39.7% 96.7% 96.7%

3

OEE (A * P * Q) Weighted Process 80.2% 45.6% 73.7% 31.8% 77.4% 77.4%

4

OEE (VAT / NAT) Weighted 4 Process 80.2% 45.6% 73.7% 31.8% 77.4% 77.4%

ASSEMBLY Department OEE  To calculate the OEE for the Assembly department, department, again, we use the same process as in the previous examples. Note that we have kept the weighted factors relative to the TOTALS for ALL parts in the f irst OEE summary table.

Mach Machin ine e Part Part Numb Number er B C

B456 C789

Machine Part Nu Number B C

B456 C789

Machine Part Nu Number B C

B456 C789

Assembly Department Calculate Total Times for all parts manufactured in the assembly area. Assembly Assembly

ACME Paradigm Totals

45 70

Assembly De Department Assembly Assembly

ACME Paradigm Totals

45 70

Assembly De Department Assembly Assembly

ACME Paradigm Totals

45 70

Production Time Report (Minutes) Planned Planned Rest Unplanned Production Periods Downtime  Time (Breaks) 480 25 18 360 15 22 840 40 40 Availability (NOT / NAT) Weighted Process 96.0% 34.8% 93.6% 25.7% 95.0% 60.6% Availability (NOT / NAT) Process Weighted 96.0% 54.6% 93.6% 40.4% 95.0% 95.0%

1

1

Quantity  Total Produced 450 229 679

Calculated Times (Minutes) Scrap

NAT - Net Available

NOT - Net Operating

IOT - Ideal Operating

LOT - Lost Operating

VAT - Value Added

25 11 36

455.0 345.0 800.0

437.0 323.0 760.0

337.5 267.2 604.7

18.8 12.8 31.6

318.8 254.3 573.1

Performance (IOT / NOT) Weighted 2 Process 77.2% 28.5% 82.7% 22.6% 79.6% 51.1%

Quality (VAT / IOT) Weighted Process 94.4% 32.6% 95.2% 26.0% 94.8% 58.6%

Performance (IOT / NOT) Process Weighted 2 77.2% 44.4% 82.7% 35.2% 79.6% 79.6%

Quality (VAT / IOT) Process Weighted 94.4% 52.7% 95.2% 42.1% 94.8% 94.8%

3

3

OEE (A * P * Q) Weighted Process 70.1% 25.4% 73.7% 20.3% 71.6% 45.7% OEE (A * P * Q) Process Weighted 70.1% 39.8% 73.7% 31.8% 71.6% 71.6%

4

4

OEE (VAT / NAT) Weighted 4 Process 70.1% 25.4% 73.7% 20.3% 71.6% 45.7% OEE (VAT / NAT) Process Weighted 4 70.1% 39.8% 73.7% 31.8% 71.6% 71.6%

How do we determine which operation to work on? Based on the Assembly department department above, it appears that Process B needs improvement in both performance and quality to improve the overall OEE. While there may be no "right" answer, we affirm that the opportunity to pursue is the one that will have the greatest impact to the bottom line.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

THE Cost FACTORS: Refer to the "OEE Documentation" Tab for a more detailed presentation using using actual cost data. Availability: Availability will have a direct and indirect impact on both Labour Labour and Burden. It could be argued that if a machine is down for an extended period of time, the direct labour could be redeployed to run another machine or work center. While this makes for a good business case, it also implies that the direct labour labour will be redeployed to run parts parts that weren't required to begin with. This isn't exactly Lean Thinking. Also, depending on the length of time that the machine is down, overtime costs may be incurred to make up for lost production.  The point is that when a machine goes down, there is a price to be paid. The real question is, "How much?" Performance: Performance has a direct impact on the Labour and to some degree the burden costs costs of the operation. Again, this will depend on the net effect of the performance loss. If the loss is significant enough to drive your plant into working overtime, then there will be increased labour and burden costs. Quality: Quality impacts all three costs being considered. considered. Material, Labour, and Burden Burden are all lost when a part is scrapped. In addition to these process costs, costs, there are the administrative and other handling costs associated associated with the scrapped materials. materials. Even if the material is reworked, typically typically the only cost recovered is material. material. Reworking product product also introduces new administrative and handling costs associated associated with the rework rework process. New burden costs not normally incurred in the original process are also introduced when repairing product. Sorting, Repair, or any other type of containment activitiy will result in NON-VALUE ADDED Costs. These costs should be part of the consideration when determining proce ss improvements. Machine Part Number Department A B C Totals

A123 B456 C789

Weld Assembly Assembly

Customer Paradigm ACME Paradigm

Cycle Time Seconds 10 45 70

Availability (NOT / NAT) Process Weighted 93.0% 33.7% 96.0% 34.8% 93.6% 25.7% 94.3% 94.3%

1

Performance (IOT / NOT) Process Weighted 2 88.3% 31.6% 77.2% 28.5% 82.7% 22.6% 82.7% 82.7%

Quality (VAT / IOT) Process Weighted 3 97.8% 37.3% 94.4% 32.6% 95.2% 26.0% 95.9% 95.9%

OEE (A * P * Q) Process Weighted 80.2% 29.1% 70.1% 25.4% 73.7% 20.3% 74.7% 74.7%

4

Material

Labour

Overhead

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Overall Equipment Effectiveness (O.E.E.) OEE is to be tracked for each major cell for every shift of production. OEE

Overall Equipment Effectiveness is the measure of Productive Time / Planned Production Time In other words, it is the measure of VALUE ADDED Time / Planned Production Time Overall OEE =

Total Time To Make a Quallity Part @ Standard Total Planned Production Time

Definitions: OEE - Overall Equipment Efficiency = Performance * Availability * Quality - World Class = 85%

Availability: Performance: Quality (FTT): OEE

90.0% 95.0% 99.5% 85.1%

DOWNTIME LOSS - Breakdowns, Stockouts SPEED LOSS - Cycle Time Efficiency YIELD LOSS - Scrap, Rework, Containment

Performance - Cycle Cycle Time Time (Standa (Standard rd Labor) Labor) - Stampings - Actual Strokes per Minute - Assembly - Button to Button Cycle Time - NO Efficiency Factors Added - Stan Standa dard rd Labo Labor  r  - Headcount of personnel required to staff each operation with no sort, rework, or containment - Acceptable = Rework included in Standard Process only or Customer mandated Product Launch Availability Total Available Time - Gross Available Time = Actual SCHEDULED Time, Maximum 1 Shift - Planned Downtime - Breaks (10 minutes x 2) - Lunch (20 minutes x 1) - Clean Up (5 minutes x 1) - Planned Downtime

480 Frequency 2 1 1

Time 10 20 5

- Net Available Time = Total Available Time - Planned Downtime - Unplan Unplanned ned Downti Downtime me - Changeover Changeover (Dies / Tools) - Breakdown - Tip Changes - Coil Changes - Material Handling - Any Other Unscheduled Events Quality (FTT) - Parts Scrapped - Weld Destruct - Coil Ends - Rework on the Line - Containment - 0% is automatically assumed for any product subject to: - Online or 3rd party containment - Rework that is not part of the standard process Calculating OEE - OEE = Performan Performance ce % X Availabili Availability ty % X Quality Quality %

Note: Quantities of parts parts are a measure of TIME. Quantity X Cycle Time = Time Required Required to Produce Parts Parts Total Equipment Effectivenss Performance - TEEP = Asset Asset Availabil Availability ity / Net Time Time Available Available * OEE OEE

This provides a measure of how well the assets are being utilized in the plant or facility.

minutes

Totals 20 20 5 45 435

minutes

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

- Weighted OEE factors for PERFORMANCE, AVAILABILITY, and QUALITY OEE = Productive Time / Planned Production Time Net VALUE ADDED Operating Time @ Standard

OEE % =

Planned Operating Time or Net Available Time

Productive Time ONLY occurs when a quality part is produced at rate. (Time to make parts that can be sold or used in subsequent processes). From the example below, the overall weighted OEE = (Total Time to Produce A Quality Part @ Standard ) / (Total Planned Production Time) Time ) Although alternative methods are presented to calculate the weighted values for the OEE factors, all resolve back to the same fundamental formulas. OEE Measures how effectively the time for a piece of equipment or process is utilized. Be cognizant of processes that yield more than 1 part per machine cycle. Although Quality (FTT) appears to measure quality based on Quantity of parts, this is directly correlated to the TIME required to produce the parts. - EXAMPLE: (Working Model) Data input fields fields are indicated indicated by the TAN Background Background

Part

Standard Cycle Time

Total Parts

Scrap

Total Good

290 150 1250 1000 500 3190

10 0 0 1000 500 1510

280 150 1250 0 0 1680

(Seconds)

75 A 75 B 15 C 1 7.5 D 52 E1 Total 1. Parts D & E are ON CONTAINMENT CONTAINMENT = All Parts Scrapped

- AVAI AVAILA LABI BILI LITY TY

Refer to Notes for Unplanned Downtime event details.

Unplanned Down Time

Net Available Time Total Available Time - Planned Down Time (Planned Production Time)

(Minutes)

Planned Down Time

(Maximum 1 Shift = 480 minutes)

(Minutes)

480 240 480 240 480

40 15 40 15 40

Actual Operating Time = Net Available Time - Unplanned Down Time

AVAILABILITY (Time Available to Produce Parts) Part

Scheduled Production Time

Availability % Actual Operating Time (Net Operating Time Actual) (Minutes)

Availability - (1&2) %

Availability Weighted %

Actual Operating Time Planned Time

Availability % * Planned Time Total Planned Time

97.73% 86.67% 95.45% 59.11% 98.86% 91.13%

24.29% 11.02% 23.73% 7.51% 24.58%

(Minutes)

A B C D1 E1 Total

10 30 20 92 5 157

440 225 440 225 440 1770

430 195 420 133 435 1613 Availability =91.13%

- PERF PERFOR ORMA MANC NCE E

91.13%

 Total Actual Operating Time  Total Net Available Time

Performance % =

Actual Rate (pcs / hr) Standard Rate (pcs / hr)

OR

Standard Cycle Time Actual Cycle Time Gross Operating Time = (Standard Cycle Time / 60) X Total Parts Made Note: Unit of Measure = Minutes

Performance (Time to Produce ALL Parts @ Standard) Part

Actual Cycle Time Actual Operating Time * 60 Total Parts Produced (Seconds)

Performance %

Gross Operating Time @ Standard

Performance (1) %

Performance (2) (%)

Performance Weighted %

(Time to Produce Total Parts @ Standard Cycle)

Gross Operating Time Actual Operating Time

Standard Cycle Time Actual Cycle Time

Performance % * Actual Operating Time Total Actual Operating Time

84.30% 96.15% 74.40% 93.98% 99.62% 88.09%

84.30% 96.15% 74.40% 93.98% 99.62% 88.09%

22.47% 11.62% 19.37% 7.75% 26.87% 88.09%

(Minutes)

A B C D1 E1 Total

88.97 78.00 20.16 7.98 52.20

362.5 188 313 125 433 1421 Performance = 88.09%

 Total  Total Operat ing Time to Produce Total Total Parts @ Standard  Total Actual Operating Time

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

(Cycle Time @ Standard / 60) X Good Parts Made

Quality Time to Produce Quality Parts @ Standard Part

Quality %

Net Operating Time @ Standard

Quality (1) %

Quality (2) (%)

Quality Weighted %

Quality Weighted %

(Time to Produce Quality Parts @ Standard Cycle)

Net Operating Time Gross Operating Time

Good Parts Total Parts

Planned Operating Time * A% * P% Total Planned Operating Time * TA% * TP%

Gross Operating Time @ Standard Total Gross Operating Time @ Standard

9 6 .5 5 % 1 0 0 .0 0 % 1 0 0 .0 0 % 0. 0 0% 0. 0 0% 59.82%

96.55% 100.00% 100.00% 0.00% 0.00%

24.63% 13.20% 21.99% 0.00% 0.00%

24.63% 13.20% 21.99% 0.00% 0.00%

5 9 .8 2 %

5 9 .8 2 %

(Minutes)

A B C D1 E1 Total

3 5 0 .0 1 8 7 .5 3 1 2 .5 0 .0 0 .0 850.0 Quality = 59.82%

 Total Time to Produce Quality Parts @ Standard  Total Time to Produce Total Parts @ Standard

Part A

B C D1 E1 Total 48.02%

OEE % OEE (1) %

OEE (2) %

A*P*Q

A*P*Q

OEE % * Planned Time Total Planned Time

Weighted OEE

79.55% 83.33% 71.02% 0.00% 0.00% 48.02%

79.5% 83.3% 71.0% 0.0% 0.0%

19.77% 10.59% 17.66% 0.00% 0.00%

48.02%

48.02%

Net Operating Time @ Standard  Total Net Available Time

Total Net (VALUE ADDED) Time / Total Planned = 48.02%

Using OEE to Manage Change General:

Understanding Understanding OEE and it's related factors, is key to managing "process" changes. While OEE determines how efficiently time is being used by a particular machine or across t he entire plant - it doesn't measure the TOTAL cost of inefficiencies! Availability: DOWNTIME LOSS Performance: Performance: SPEED LOSS (Cycle (Cycle Time Inefficiency) Quality: YIELD LOSS Labour Variance: OEE can be used to measure Labour Labour Variances: Availability X Performance

Availability: Time lost due to inability to produce produce parts. Performance: Performance: Time lost (for all parts) due to cycle time inefficiency inefficiency Direct Labour Impact:

When deciding which process to address first, consider the total direct labour required to run it. Two processes running at the same overall OEE may have considerable cost implications (differences). (differences). Material Variance:

Quality: Material lost due due to scrap parts, coil coil ends When deciding which process to address first, consider the cost of material required to make the parts. Two process running at the same overall OEE and Quality may have significant differences with respect to cost impact. Salvage / Recovery revenue should also be considered in the overall part assessment. Learn to appreciate appreciate the difference difference in value of materials. materials. Example: Gold and Silver. Silver. Burden Variance:

Availability: Unexpected machine repairs, repairs, replacement parts Performance: Performance: Equipment repairs repairs required to address machines running at reduced reduced speeds due to wear and tear. Quality: Rework, Containment, Containment, Inspection, Material Handling support. support.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

VOLUME: The effect of volume should be clear as the cost differences will vary accordingly. EXAMPLE of Cost Implications: NOTE That the OEE is the SAME for both processes. processes . Process A B

Direct Labour 8 2

$27.20

A

P

Q

$217.60 $54.40

9 5% 9 5%

90% 9 0%

7 0% 70%

Direct Labour Cost - Variance Calculation Calculations s Direct Labour is Redeployed while machine is down

Process

P

Direct Labour Labour Cost for Net Quantity Required (Performance)

Labour Variance

A B

90% 90%

$241.78 $60.44

$2 4 .18 $6.04

Process

A*P

Direct Labour Labour Cost for Net Quantity Required (Performance)

Labour Variance

A B

86% 86%

$254.50 $63.63

$3 6 .90 $9.23

Q

Standard Material Cost

Direct Labour Cannot be redeployed while machine is down

Material Cost - Variance Calculations Process A B

70% 70%

Actual Cost

$0.25 $150.00

Material Variance $0.36 $214.29

$0.11 $64.29

RECOVERY / SALVAGE Costs Scrap material may be sold and as a result could return revenue to offset the overall cost impact.

Putting it ALL Together: From the example above: Process

Labour $24.18 $6.04 $18.13

A B A-B

Variances Material $0.11 $64.29 $(64.18)

Salvage

Total $24.28 $70.33 $(46.05)

$0.02 $9.64 $(9.63)

EFFECT of Volume Process

Annual Volume

A B A-B

170,000 50,000 120,000

Total Cost Impact due to Variances $4,128,436.51 $3,516,507.94 $611,928.57

Recovery

Net Impact (Recovery) $2,732.14 $482,142.86 $(479,410.71)

$4,125,704.37 $3,034,365.08 $1,091,339.29

In this example, it is clear t hat while the labour cost for process A presents a cause for concern and should be addressed before looking at Process B, the material cost variance presents a much greater opportunity for process B. Putting it all together, based on Volume, the real process to focus on is Process A.

Making it Happen - NEXT Steps Establish Clear Standards - Material, Cycle Time, Labour  Quick Die Change Inventory Management Initiatives: Min-Max Targets, Inventory Turns, Turns, PULL Quality: Scrap, Rework, Rework, Containment Containment

Process Cycle Efficiency (Lean Metric) Value-Added Time / Total Lead Time

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Total Equipment Effectiveness (Performance) - Defi Defini niti tion on:: Measures how well assets in the plant are being utilized in an area or total plant. This is typically based on a 24 hour day, 7 days / week, 365 day base line. For a shift the TEEP will be based on a full 8 hour day (480 minutes). TEEP

Total Net Available Time * OEE Total Available Asset Time

OR

 

Total Net Value Added Time Total Available Asset Time

It is possible for OEE to show continued improvement, however, equipment utilization is affected by volume and product mix based on customer demand. The weighted OEE does not provide an indicator of how effectively the equipment is being utilized. Consider 1 High performance job running in 1 of 2 machines versus 2 Lower performance jobs running running in 2 of 2 machines. Example: Shift Comparisons Extreme caution should be exercised when comparing comparing the OEE between two shifts, production areas, or plants based on overall performance performance unless they present the same "product / process" mix. In the example below, Shift A has a higher weighted OEE when when compared to Shift B although there is real no difference between them. When considering the TEEP, Shift B actually outperforms shift A by a large margin because more asset capacity was used to make parts. When comparing line item processes, both ran equally well.

SHIFT A Part / Process

OEE %

Available Asset Time

Net Available Time

Weighted OEE

TEEP (Asset Utilization %)

Weighted TEEP

Net Available Time * OEE TOTAL Net Available Time

Net Available Time * OEE Available Asset Time

Net Available Time * OEE TOTAL Available Asset Time

83 % 0% 0%

28% 0% 0%

28%

28%

A B C

90% 85% 80%

480 480 480

440 0 0

90 % 0% 0%

TEEP

Weighted OEE used for Overall TEEP

1440

440

90%

TEEP (Asset Utilization %):

 Total Net Available Time * WEIGHTED OEE  Total Available Asset Time

Shift B Part / Process

OEE %

Available Asset Time

Net Available Time

Weighted OEE

TEEP (Asset Utilization %)

Weighted TEEP

Net Available Time * OEE TOTAL Net Available Time

Net Available Time * OEE Available Asset Time

Net Available Time * OEE TOTAL Available Asset Time

83 % 78 % 73 %

28% 26% 24%

78%

78%

A B C

90% 85% 80%

480 480 480

440 440 440

30 % 28 % 27 %

TEEP

Weighted OEE used for Overall TEEP

1440

1320

85%

TEEP (Asset Utilization %):

 Total Net Available Time * WEIGHTED OEE  Total Available Asset Time

- TEEP TEEP Summ Summar ary y Improved OEE performance will yield a lower TEEP as more capacity is made available. The objective then becomes filling this available capacity.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.

G138: H138: H145:

G156:

Refer to Notes for Unplanned Downtime event details.

Actual Operating Operating Time = Net Available Time - Unplanned Down Time

 Total Actual Operating Time  Total Net Available Time

Gross Operating Time = (Standard Cycle Time / 60) X Total Parts Made Note: Unit of Measure = Minutes

G163:

F172: F179:

E195:

 J336:

 Total Operating Time to Produce Total Parts @ Standard  Total Actual Operating Time

(Cycle Time @ Standard / 60) X Good Parts Made

 Total Time to Produce Quality Parts @ Standard  Total Time to Produce Total Parts @ Standard

Net Operating Time @ Standard  Total Net Available Time

TEEP (Asset Utilization %):  Total Net Available Time * WEIGHTED OEE  Total Available Asset Time

 J348:

TEEP (Asset Utilization %):  Total Net Available Time * WEIGHTED OEE  Total Available Asset Time