UNCOVERING HIDDEN CAPACITY UTILIZING OEE N Riverview Drive No. 300 Anaheim, CA 92808, United States

Transcription

1 UNCOVERING HIDDEN CAPACITY UTILIZING OEE TM N Riverview Drive No. 300 Anaheim, CA 92808, United States

2 2 Uncovering OEE INTRODUCTION Many companies routinely hit capacity constraints and immediately consider adding overtime for existing workers, hiring workers for a new shift, or buying a new line. Relatively few companies have made the more modest investment that is required to optimize the performance of their existing lines. As the global marketplace changes, it has become increasingly clear that stakeholders put a large value on an organization s ability to maximize productivity and utilization to its fullest potential. With consumers demanding lower and lower prices, a reduction in operating costs and cost of goods sold has never been more needed to stay competitive. One way to measure a plant s performance and productivity is with Overall Equipment Effectiveness or OEE (but you already knew that). Now let s talk about OEE and how to fully utilize this KPI to your benefit. Many manufacturing companies have been measuring the efficiency of their lines and work cells in such a way as to mask many of the causes of lost efficiency. Over a period of years, management focuses on the numbers being reported and is no longer thinking about what is included or excluded from the measurement. One of the reasons OEE is such a valuable measure is that it allows you to look at all sources of lost time and lost production. OEE can deliver accurate, and actionable intelligence ready to be consumed by the decision makers for significant productivity improvement. That s why OEE has emerged as the leading approach for accurately measuring true plant productivity. Third is Operating Time. This is the difference between Planned Production Time and the time lost to downtime. Downtime events include equipment breakdowns, unscheduled maintenance, setup time and changeover. This is included in calculating your OEE. Fourth, is Net Operating Time, this is the difference between Operating Time and time lost to a reduction in speed. Speed reduction events include operating equipment at below rated speed (increased cycle time), frequent short-lived stoppages not requiring maintenance, and certain operator errors. This is included in calculating your OEE. And lastly, Productive Time. This is the difference between the Net Operating Time and the time lost to quality issues. Quality loss includes rejected and reworked products. This is included in calculating your OEE. Figure 1 illustrates this concept. Before we delve into OEE, and how to best calculate it, let s briefly discuss the various time categories and what they are. First, Total Available Time, the time that the plant is open and theoretically could be producing goods. Second, Planned Production Time, the Total Available Time minus the planned shutdown time. Planned shutdown time could include meal breaks, holiday shutdown, and scheduled maintenance. Figure 1

3 Uncovering OEE 3 HOW IS OEE CALCULATED CORRECTLY? By definition, OEE is the product of Availability, Performance, and Quality percentages: OEE = Availability * Performance * Quality Availability is a measure of downtime losses Performance is a measure of speed losses Quality is a measure of defect losses Each one of these OEE components represents losses that result in a reduction of operating time. We begin with total available time and subtract time losses due to Availability (downtime), Performance (speed), and Quality (reject/ rework). Very quickly, one can see the effects of these losses on production time. work cell. Short, stop failures such as jams, overloads, gaps in components on the line, or other faults that can be cleared without maintenance intervention. Many lines have 1,000 or more short stops per week which results in a massive reduction of output. Planned shutdown time or time when production is not needed is normally excluded from your OEE calculation. Quality (defect losses) Quality is typically reduced by: Any product that is rejected or must be reworked. By definition then, productive time is a fraction of total available time. By using and understanding the losses, we can take the actions necessary to increase productive time as much as possible. Here you find the most common losses related to the various OEE categories. Availability (downtime losses) Availability is typically reduced by planned and unplanned events such as: Changeovers Sanitation/Cleaning Preventive maintenance Meetings Training Startup/Shutdown No components Facility problem (no power, air, refrigeration, etc.) Capital projects Performance (speed losses) Performance is typically reduced by: Running a production system at a speed lower than the theoretical run rate for that SKU on that line/machine/

4 4 Uncovering OEE REAL-WORLD EXAMPLE Now that we have discussed the categories for OEE losses let s take a look at how OEE is calculated with a real-world example. Total Time: Total time the process is scheduled to work, 5 days with 24 hours each, for a total of 7200 minutes. Downtime: Machine stopped for whatever reason: 1,440 minutes. Cycle Time: 1.5 minutes/unit Good Units: In 5 days, 2880 pieces Defective Units: In 5 days, 240 defective pieces Let s take a look at a slightly more complex real world example of a canned food plant. Average Line Efficiency is 88% using the traditional way of measuring efficiency where availability and short stops failures are not counted. OEE calculation time period is 3 days or 4,320 minutes Time not scheduled = 1,230 minutes. Plant operates two shifts per day, over 3 days the line should be unused for 24 hours (1,440 mins) but looking at the time cards, with overtime, the actual time not scheduled is 20.5 hours. Planned production time, 3,090 minutes (4,320-1,230). Theoretical rate of SKU #1 is 500 cans/min. Note cycle time is 1/500, or.002 First pass yield, 1,027,500 cans. This number comes from the production report, it is not calculated. Calculated OEE is 66.5%. Let s extend the example of canned food plant. With an initial OEE of 66.5% prior to implementing an automated OEE and downtime system. OEE = A x P x Q OEE = 80% x 81.5% x 92.31% = 60% OEE = 60% There are however, several shortcuts to calculating OEE. The most simple and easiest ways to calculate can be found below. By reducing setup times (small investment in tooling, establishing best practices, and training) the availability improves from 80% to 85%. By identifying and resolving the 5 most serious causes of short stops, the performance improves from 84% to 86%. By identifying the number one cause of rejects and resolving it, quality improves from 99.0% to 99.2%. Compound these small improvement numbers and OEE jumps from 66.5% to 72.5%. This six point improvement of OEE is a 9% improvement in the overall value. This means that the canned food plant can now produce 9% more product with the same assets in the same time, or if the demand is fixed, produce the same quantity with a 9% reduction in operating costs. Benefits Summary Produce an additional 43,200 cans daily with the same assets and costs ($32,400/day), resulting in a yearly addition of $11.3 million. Work 95 fewer shifts per year (when running 24/7/350).

5 Uncovering OEE 5 THE BOTTOM LINE Many companies routinely hit capacity constraints and immediately consider adding overtime for existing workers, hiring workers for a new shift, or buying a new line. Relatively few companies have made the more modest investment that is required to optimize the performance of their existing lines. This investment pays huge dividends by reducing process variability, reducing changeover times, improving operator performance, reducing overtime expenditures, unleashing hidden capacity, and allowing deferral of major capital investments. These are measurable benefits that will substantially improve the bottom line of your production operation. About Parsec Parsec is the developer of TrakSYS, a proven operations management software application and solution platform designed to significantly improve manufacturing processes. Parsec is committed to providing best-in-class products and solutions to our worldwide community of clients to assist them in optimizing their manufacturing operations. There are thousands of TrakSYS licenses in use, in over 100 countries around the globe in a wide variety of Industries. TrakSYS helps manufacturers to maximize asset utilization and efficiency, increase capacity with no new capital equipment, reduce production costs, decrease lead time, and improve profitability. For more information about Parsec and TrakSYS please visit the corporate website at