OEE: Overall Equipment
Effectiveness
Oh "Equipment
Effectiveness", I've heard about that before!
Unfortunately, in many facilities, that's all OEE (Overall Equipment
Effectiveness) is to the personnel. Something they heard of, talked about
or read about. Many maintenance departments today still do not effectively
utilize the OEE tool even though it's widely used among the world class
companies.
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Definition
of OEE: Overall Equipment Effectiveness
The
overall performance of a single piece of equipment or even an entire
factory, will always be governed by the cumulative impact of the three
OEE factors: Availability, Performance Rate and Quality
Rate.
OEE
is a percentage derived by multiplication of the three ratios for
the factors mentioned above. The OEE percentage is used for analysis
and benchmarking.
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In speaking with Mike Sondalini (Best Practice
Facilitator/Author) about a similar topic - Root Cause Analysis (RCA), Mike
makes a statement I think identifies one of the main barriers to successful OEE
implementation today.
Mike: "I must admit that a lot of
people know of RCA and its implications but very few people use it. I
think it's because they aren't able to convince enough of the right people at
their work place to try it and then to stick with it."
In my experience, OEE has had better coverage than the other analysis tools
like RCA
or Fault Tree
Analysis (FTA). This may be due to the fact that Overall Equipment
Effectiveness is also a benchmarking tool as well as an analysis tool. In an
attempt to grow the numbers who profit from using OEE, I will go over what OEE
is, why you should use OEE, and how to use it.
What
is OEE?
OEE = Availability X Performance Rate X
Quality Rate
Availability - Percent
of scheduled production (to measure reliability) or calendar hours
24/7/365 (to measure equipment utilization), that equipment is
available for production.
Note: measures the percent of time that the equipment can be used (usually
total hours of 24-7-365), divided by the equipment uptime (actual production).
Performance Rate - Percent
of parts produced per time frame, of maximum rate OEM rated production speed at.
If OEM specification is not available, use best known production rate.
Note: Performance efficiency is the
percentage of available time that the equipment is producing product at its
theoretical speed for individual products. It measures speed losses. (e.g.,
inefficient batching, machine jams)
Quality Rate - Percent
of good sellable parts out of total parts produced per time frame.
Note: Determining the percent of the total
output that is good. (i.e. all products including production, engineering,
rework and scrap.)
Example: 50% Availability (0.5) X
70% Performance Rate (0.7) X 20%
Quality Reject Rate (results in 80%(0.8) acceptable) =
30%OEE
(Please see www.DowntimeCentral.com/OEE_TEEP.htm
for a free online calculator to practice with.)
Why use OEE?
Overall Equipment Effectiveness (OEE) can be used to save companies from
making inappropriate purchases, and help them focus on improving the performance
of machinery and plant equipment they already own. OEE is used to find the
greatest areas of improvement so you start with the area that will provide the
greatest return on asset. The OEE formula will show how improvements in
changeovers, quality, machine reliability improvements, working through breaks
and more, will affect your bottom line.
As you strive towards World Class productivity in your facility, this simple
formula will make an excellent benchmarking tool. The derived OEE percentage is
easy to understand and displaying this single number where all facility
personnel can view it, makes for a great motivational technique. By giving your
employees an easy way to see how they are doing in overall equipment
utilization, production speed, and quality, they will strive for a higher
number!
I highly recommend using an automated equipment monitoring system with an LCD
display for your OEE in each respective area of your facility so all can
monitor. To the employee in each area, it will become as common to glance at, as
the speedometer on a car. While showing machine speed with such a display helps,
machine speed is only a small percentage of your overall equipment
effectiveness - OEE.
How to use OEE?
Implementing the Overall Equipment Effectiveness formula in your facility can
take on many different forms. It can be used as an analysis and benchmarking
tool for either reliability, equipment utilization, or both. Don't let
indecision on how to best use OEE become a barrier that prevents you from using
it at all. Start out small if necessary, picking your bottleneck to collect the
OEE metrics on.
Once you see first hand what a valuable tool it is, you can gradually take
OEE measurements on other equipment in your facility. If you work in
manufacturing , there is no substitute for going out to the shop floor and
taking some rough measurements of OEE. You will be surprised by what you find!
While monitoring OEE per equipment brings focus on the equipment itself, it
may not provide true cause of major costs, unless the cause is obvious. For
example OEE can appear improved by actions such as purchasing oversize
equipment, providing redundant supporting systems, and increasing the frequency
of overhauls.
To improve your OEE percentage, you will need to use other tools and
methodologies available to you, like TDC, RCA, FTA etc. TDC is a relatively new
methodology that focuses on True Downtime Cost for justification and making
better management decisions. You can learn more about TDC at www.downtimecentral.com/tdc.htm.
TDC overcomes the main implementation barrier for OEE by giving maintenance
managers a tool in which to show actual cost savings in relationship with OEE.
For the ultimate decision making tool, incorporate
OEE with TDC.
Front End:
Incorporate TDC
into your data collection. (contact me for a free power point)
Back End: Incorporate
TDC
into your software reporting by requiring it of
your software vendor.
On a larger scale, you should not only be calculating equipment OEE, you
should also be calculating a production line OEE, and within a corporation, a
facility OEE. Factory automation companies are starting to incorporate OEE into
the reports they generate automatically! There are also a few companies who
specialize in providing shop floor data in automatic easy to read OEE reports.
If you would like more information or recommendations on companies that can get
your automated OEE system up and running, please contact me at bin95
@ bin95.com, I'll be happy to recommend a service provider.
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