An overview of Overall Equipment Effectiveness

What is OEE?

OEE (Overall Equipment Effectiveness)

• “Best Practices” way to measure and improve the effectiveness of a manufacturing processes
• 100% OEE = Manufacturing only good parts, as fast as possible, with no down time
• Simple to measure and practical to improve
• Eliminates waste & reduces variation of manufacturing process
• It is one of the key metrics in Lean Enterprise

OEE breaks the performance of a manufacturing unit into three separate but measurable components: Availability, Performance, and Quality. Each component points to an aspect of the process that can be targeted for improvement.
OEE may be applied to any individual Work Centre, or rolled up to Department or Plant levels. This tool also allows for drilling down for very specific analysis, such as a particular Part Number, Shift, or any of several other parameters. It is unlikely that any manufacturing process can run at 100% OEE. Many manufacturers benchmark their industry to set a challenging target; 85% is not uncommon.

OEE = Availability X Performance X Quality

Example: (Availability= 95.0%) X (Performance=91%) X (Quality=95%) =(OEE=76%)

APQ Factors & TEEP

OEE address three key factors of any manufacturing process which are easy to measure & helps you systematically improve your processes and profitability and add values to your product.

1. Availability: It measures losses due to planned & unplanned downtimes
2. Performance: It measures losses due to running at lower speeds & minor stoppages
3. Quality: It measures losses due to product manufactured out of allowable specification.

To understand it in better way, let’s consider one example and the calculations of the terms associated with OEE.

Total Available Time:

• It is a Total amount of time facility is open and available for production.
• Scheduled Operating Time is actual time for which machine is scheduled to run.

Availability (Operating Time):

• Availability % = Run Time/Planned Production Time
• Availability Loss includes all events that stop planned production for an appreciable amount of time (usually several minutes). Examples include equipment failures, unplanned maintenance, material shortages, and changeovers.

Performance (Net Operating Time):

• Performance % = Actual Output/Planned Output
• Performance Loss includes all events that cause process to run at slower speeds (Speed Loss) than designed speed. Examples include equipment wear, minor stops, lack of skills.

Quality (Valuable Operating Time)

• Quality % = Good Production/Total Production
• Quality Loss includes part or product that are not meeting customer specifications or quality standards.

Example:

A plastic bags manufacturing company is having 24X7 operation running in rotational shift. They are having planned shutdown of 10 days in a month. As per OEE definition, this will be excluded to calculate scheduled operating time. Downtime data, Ideal cycle time, Total production & good production data for a month of Apr is collected as below.

Yellow highlighted rows are the inputs required to calculate OEE. Other rows are auto calculated based on input data in row number 1 to 4 & row 11 & 12.

First, let’s calculate OEE as a function of Time:

1. Total Available Time = 30 Days X 24 Hours = 720 Hours
2. Planned Shutdown = 10 Days X 24 Hours = 240 Hours
3. Downtime Loss = Breakdown + changeovers + process failure time = 25 Hours
4. Ideal Cycle Time = Minimum time required to produce single unit (Most of the time it is given by machine designer as rated capacity) = 1/150 = 0.0067
5. Scheduled Operating Time = (Total Available time — Planned Shutdown) = (720–240) = 480 Hours
6. Operating Time = (Scheduled Operating Time — Downtime Loss) = (480–25) = 455 Hours.
7. Net Operating Time = (Ideal Cycle Time * Total Production) = (0.0067 X 62,000) = 413 Hours.
8. Speed Loss = (Operating Time — Net Operating Time) = (455–413) = 42 Hours.
9. Valuable operating time = (Ideal Cycle Time * Good Production) = (0.0067 X 55,000) = 367 Hours.
10. Quality Loss = (Net operating time — Valuable operating time) = (413–367) = 47 Hours.
11. Total Production = Total units produced during time under consideration (i.e. 480 Hr.) = 62,000
12. Good Production = Units that meet the specification or release criteria =55,000
13. Production Reject = (Total Production- Good Production) =7,000

An interactive look at OEE as a function of Time

Calculate OEE as a function of percentage (%):

OEE=(Availability ×Performance ×Quality)= (94.8 × 90.8 × 88.7) = 76.4%

An iterative look at OEE as a function of Percentage (%)

TEEP (Total Effective Equipment Performance)

Where OEE measures effectiveness based on scheduled hours, TEEP measures effectiveness against calendar hours, i.e.: 24 hours per day, 365 days per year.

TEEP, therefore, reports the ‘bottom line’ utilization of assets.

To calculate TEEP, the Availability metrics calculation are only changed, rest of the two factors, Performance & Quality remains the same.

Denominator in Availability is all calendar hours for which production is under consideration.

In our example we have considered production of one month

Total Available Time = 30 Days X 24 Hours = 720 Hours

14.1. Availability (All time) = (Scheduled operating time-down time)/ (Total Available Time) × 100 = (480–25)/720×100=63.2%

18. TEEP = (Availability all time × Performance × Quality) = (63.2×90.8×88.7) = 50.9%

TEEP (Total Effective Equipment Performance)

Author: Yogesh Botre (ASQ Certified Six Sigma Black Belt, Trainer and Practitioner)

Author is Trainer and Business Strategist at Learn and Apply- Operational Excellence Consultancy. He heads Lean Six Sigma and Continuous Improvement Divisions, with overview in Planning, execution.

He can be reached at No. +91 9923133833

Web: www.learnandapply.org