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1 WHITE PAPER MEASURE ANALYZE W p IMPROVE Operational Equipment Effectiveness spencermetrics CONNECT When you think of printing as the production of printed objects whether those objects are documents, labels, signs, clothing, or 3D printed items the production printing equipment is an asset, acquired as a key element in the production process. This asset is an investment upon which a return is expected. The Return on this Investment (or ROI) is in the form of profitable sale of those objects. Selling more objects increases this return; therefore, the focus of the production of printed objects is in the effective use of the equipment higher asset productivity translates directly into lower cost per object and higher profit. There has been much research into manufacturing productivity. One of the tools used to evaluate how effectively a manufacturing operation is being utilized, developed in the 1960s by Seiichi Nakajima, is Operational Equipment Effectiveness (OEE). Related to the Japanese practice of Continuous Improvement, it was originally introduced to the West in 1986 by Masaaki Imai in his book, Kaizen: The Key to Japan s Competitive Success. It may be used as a Key Performance Indicator (KPI) in conjunction with Lean manufacturing to measure process performance improvement. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System, with emphasis on time management and waste reduction through quality improvement, focusing on Value something for which a customer would be willing to pay. Essentially, Lean is centered on making obvious what adds value by reducing those things that don t. In production printing, downtime time when the press is not producing saleable output can be a form of waste; it does not add value and is to be reduced. Use of the spencermetrics system reduces production printing downtime; OEE metrics are included. OEE is a set of calculated metrics, OEE itself being the product of three primary parameters: Availability, Quality, and Performance. Each of these is designed to exclude the effects of the other two. Availability: The percentage of scheduled time that the press is available to operate. Quality: The Good units produced as a percentage of the Total units started. Performance: The measured speed of the press (its process rate) as a percentage of its design speed. OEE is calculated on that portion of total calendar time actually scheduled for operation; however, it is also important to measure the effectiveness against calendar hours, that is, 24/7 the overall utilization of assets, or Total Effective Equipment Performance (TEEP). The Loading portion of the TEEP Metric the percentage of time that an operation is scheduled to operate compared to the total calendar time that is available is a measurement of schedule effectiveness, excluding the effects of how well that operation may perform.

2 Page 2 of 6 Most experts agree that the value of OEE is not in its actual number, but in tracking changes in OEE as a consistent measure over time. This is particularly important in tracking Continuous Improvement as well as in alerting management to unanticipated negative changes in operations. OEE and Spencermetrics The implementation of OEE within the spencermetrics system takes root in the OEE Industry Standard (v2011), published by the OEE Foundation ( They note that, An average machine in an average factory runs about 35 to 45% OEE. So it is losing 55 to 65% capacity(!) while: not running, running at a reduced speed, or producing products out of spec. Applying this to the spencermetrics environment, every press-related element of OEE analyses may be defined in parameters that can be measured in the print shop. These definitions are shown in Illustration 1. The analyses can include any number of 24-hour days, each divided into seven (7) time categories; they are: 1. Good Output 2. Performance Loss and minor stoppages 3. Waste & Rework Output 4. Outside Service, In-house Repair, Web Break/Sheet Jam, Preventative Maintenance, Quality Control, Consumable Change, and Setup Availability Losses 5. Delays 6. No Work 7. No Shifts scheduled While the definitions of many of these categories are self-explanatory, Performance Loss is thought of as the ratio of actual to rated speed, not as a time duration. To explain the equivalence, an example: rated speed is 100 pages-per-minute, but it may take 8 (not 6) minutes to print a 600 page job because its actual speed is 600/8= 75 pages-per-minute. Its Performance is the 75/100 ratio of pages-per-minute, or 75%, which is exactly the same as the ratio of the 6 minute duration at rated speed vs. the actual 8 minute duration. That extra time, the additional 2 minutes the job took, is the Performance Loss duration. In Illustration 1 names are given to the time durations resulting from the removal of one or more of these time categories, beginning with number 7, No Shifts, and continuing sequentially. In the lower part of the illustration each of the 10 OEE parameter calculations in the standard are shown, along with historical spencermetrics Productivity and Utilization metrics. Productivity is calculated by dividing actual Good Output Time by the Loading Time less Delays, and Utilization by similarly dividing Good Output Time by the Sum of all Shift Times. OEE Top is also a similar calculation, where the divisor is the workload, Loading Time. These three KPIs are designed to track a manufacturing unit s Good Output during periods when shifts are scheduled, when there is less workload, and when there are also delays. OEE itself quantifies how well a manufacturing unit performs relative to its design capacity by tracking Good Output when there is a workload; it is defined as the product of Availability, Quality, and Performance. Availability is the Total Output Actual Time (regardless of quality or performance) divided by Loading Time; Quality is the ratio of Good Output divided by Total Output (Good, Waste, and Rework); while Performance is the ratio of Output at Rated to Output at Actual Time or speed, as mentioned above. Since multiplication is mathematically linear, OEE is simply Good Output at Rated Time divided by Loading Time. OEE Solitaire is similar to OEE, but it relieves the restraints inserted by the rest of the line (delays); its calculation is Good Output at Rated Time divided by Loading Time less Delays.

3 Page 3 of 6 Selected Measurement Duration 24/7 Sum of All Shift Times No Shifts No Work Loading Time less Delays Delays Good Output Actual Time Good Speed Total Output Actual Time Performance Loss Waste & Rework Service, Repair, Break/Jam, Maintenance, Quality Control, Consumables, Setup Productivity OEE Top Utilization Good Output Time Good Output Time Good Output Time Numerator Loading Time less Delays Sum of All Shift Times Denominator AVAILABILITY QUALITY PERFORMANCE Total Output Actual Time Good Output Total Output Good Good Output Actual Time Good OEE Good OEE Solitaire Loading Time less Delays TEEP: Net Good Utilization Selected Measurement Duration 24/7 Operations Effectiveness Asset Utilization Capacity Utilization Good W&R Sum of All Shift Times Total Output Actual Time Selected Measurement Duration 24/7 Selected Measurement Duration 24/7 Illustration 1. Spencermetrics OEE TEEP or Net Utilization is also similar; it quantifies how well a manufacturing unit performs relative to its design capacity over the potentially available calendar time; it is calculated by dividing Good Output at Rated Time by the total Selected Measurement Duration 24/7. The OEE standard defines three additional parameters. Operations Effectiveness quantifies how well a manufacturing unit performs producing all output, whether good, bad, or rework, relative to its design capacity during the time it is scheduled to operate; it is calculated as the sum of Waste, Rework, and

4 Page 4 of 6 Good Output at Rated Time divided by the Sum of all Shift Times. Asset Utilization quantifies how well a manufacturing unit performs producing all output, good, bad, or rework, over the potentially available calendar time; the calculation is Total Output Actual Time divided by the total Selected Measurement Duration 24/7. Lastly, Capacity Utilization tracks how much work load is put on the manufacturing unit over the potentially available calendar time; its calculation is Loading Time divided by the Selected Measurement Duration 24/7. Since the calculation of Performance Loss requires a count of actual pages produced over time, this calculation is available only when the connected press provides its continuing page or impression count; otherwise, as with OEE Top, Performance is assumed to be 100% and its Loss to be negligible. An Example To further illustrate the implementation of OEE in the spencermetrics system, an example of a digital color web-fed press covering a period of 4 days was constructed, as shown in Illustration 2. Shifts were scheduled for all but 20 of the 96 hours. Although this was an active shop, no work was available for a total of 3½ hours during those shifts. Furthermore, there were 3.4 hours of delays when the operator had to attend meetings, fix a problem with its in-line finisher, help with a problem on some other equipment, and take personal time. Of the remaining 69.1 hours, 18.8 hours were spent on the care and feeding of the press Job Setups, file Processing, Consumable changes, Maintenance, Quality Control, fixing Web Breaks, in-house Repair, manufacturer Service, etc. leaving the press available to print for 50.3 hours. A fraction of those prints were not good either actual waste or rework, replacing jobs previously thought to be good and later rejected totaling 2½ hours of printing. During the remaining 47.8 hours the press produced only 65.76% of its rated capacity; had it operated at that rated capacity it would have produced all of that good output in only 31.4 hours. The dozen KPI parameters are calculated as follows: Productivity: = 69.2% OEE: % = 43.4% OEE Top: = 66.0% OEE Solitaire: = 45.5% Utilization: = 62.9% TEEP / Net Utilization: = 32.8% Availability: = 69.4% Operations Effectiveness: % 76 = 43.5% Quality: = 95.1% Asset Utilization: = 52.4% Performance: = 65.8% Capacity Utilization: = 75.5% These parameters can be compared over time to measure Continuous Improvement. Spencermetrics Actionable Information One of the largest losses in the example and often in our experience is the Availability Losses. In addition to Delays, the elements that comprise the Care and Feeding of a production press (and many other major assets) takes a significant portion of Loading Time when work is available. Therefore, one of the best opportunities to improve productivity, to reduce cost, and improve Good Output Time is to reduce the Availability Losses. Unfortunately, many of the elements of the Availability Losses cannot be measured automatically. They involve operators and other humans they involve Operator Knowledge. For this important reason the spencermetrics CONNECT system collects and merges data from the press operators with machine data. The results are shown in each press analysis along with a Pareto chart of the Losses.

5 Page 5 of Losses Hours 48 Selected Duration Total Output Actual Time 50.3 Good Output Actual Time 47.8 Good Speed /7 No Shifts No Work Delays Availability Quality Performance The Spencermetrics System Illustration 2. Spencermetrics OEE Example In today s competitive environment, printers understand that reducing production cost and improving efficiency must be key strategic initiatives. Today s print MIS and workflow automation systems do not provide the actionable data needed to improve shop floor productivity. Beyond the monitoring of uptime and impressions or clicks, understanding the root causes of downtime requires more. The patent-pending spencermetrics solution is elegant in its simplicity of implementation, and goes beyond traditional MIS tracking to reduce downtime, improve throughput, and optimize utilization of resources. Users have reported reduced costs in overtime and waste; increased opportunities with shortened cycle times, optimized scheduling, improved procedures, identified training needs, improved capacity utilization, increased usable output, improved resource allocation & asset utilization, etc. By gaining operational insight, users are increasing productivity, reducing cost, increasing opportunity, and driving Continuous Improvement. 9 Feb 2016

6 Page 6 of 6 About spencermetrics llc Spencermetrics LLC is part of the Spencer Associates Group, which has provided a boutique digital imaging and printing consultancy since Spencer & Associates bridges the boundary between technology and product marketing, working with organizations for which printing is mission-critical optimizing digital printing quality, color management and workflows. Its spencerlab division provides competitive analysis, digital color technology, consumable yield expertise, and Focus Group management; its printer test software is a de facto standard. For more information, please visit or contact us at spencermetrics@spencer.com

7 Without data you re just another person with an opinion W. Edwards Deming

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