OVERALL EQUIPMENT EFFECTIVENESS (OEE)

Transcription

1 An Introduction: OVERALL EQUIPMENT EFFECTIVENESS (OEE) Driving Continuous Improvement and enabling Operational Excellence Parsec Automation Corp East Birch Street Suite 104 Brea, CA, USA Phone: Fax: Parsec Automation Corp All rights reserved. Parsec Automation Corp., Parsec logo, and Parsec product names are trademarks of Parsec Automation Corp. References to other companies and their products use trademarks owned by the respective companies and are for reference purposes only.

2 TABLE OF CONTENTS 1. OVERVIEW DEFINITION OF OEE UNDERSTANDING OEE TERMINOLOGY OEE CATEGORIES DEFINING OEE EVENTS WHAT IS CONSIDERED WORLD CLASS OEE? A REAL EXAMPLE CONCLUSION FREQUENTLY ASKED QUESTIONS ABOUT OEE OEE GLOSSARY OF TERMS ABOUT PARSEC TERMS AND CONDITIONS OF USE An Introduction to OEE Page i

3 AN INTRODUCTION TO OEE 1. Overview It has become increasingly clear that the financial markets put a premium on a company s ability to maximize productivity and utilization of CURRENT assets. This will result in a net reduction in cost of operation, which directly and positively affects the bottom line. In order to do this, you have to CONTINUALLY measure, analyze and adjust your output. This is a complex process that affects labor, equipment, consumables, procedures, quality and capital investment. As part of the plan to maximize productivity, the following is a list of goals common to most manufacturers: Reduce operating costs Increase true capacity / Decrease time to produce Reduce fixed-asset base (increase return on assets) Better manage, allocate and spend capital Increase total shareholder returns But how do you accomplish these. Overall Equipment Effectiveness (OEE) has emerged as a powerful method of evaluating the productivity of production systems. This document will provide a brief guide to the concept of OEE. 2. Definition of OEE OEE is an effective methodology to help improve the efficiency of manufacturing processes. Increasingly since the early 1990s, OEE has emerged as a leading approach for accurately measuring the true plant productivity. Although, initially, OEE was regularly associated with Total Productive Maintenance (TPM) programs, it is now being looked at as a powerful means of evaluating the key productivity indicators. By definition, OEE is the product of Availability, Performance and Quality category percentages: Where: OEE = Availability * Performance * Quality Availability is a measure of Downtime Losses, Performance is a measure of Speed Losses, and Quality is measure of Defect Losses. An Introduction to OEE Page 1

4 3. Understanding OEE Terminology The following Sections describe the various OEE terms used OEE Categories There are three Categories that make up OEE: Availability Performance Quality Each one of these categories represents losses that result in loss of productive Operating Time. We begin with Total Available Time and subtract time lost to Availability (Downtime), Performance (Speed) and Quality (Reject/Rework) issues. Very quickly, one can see the effects of these losses on production time. Clearly, the Productive Time becomes a fraction of Total Available Time. Obviously, by using OEE, the goal is to increase the Productive Time as much as possible. FIGURE 1, below, demonstrates the time losses due to various OEE Categories. FIGURE 1 Time Losses Please note that the Planned Shutdown Time is not included in the OEE calculation. An Introduction to OEE Page 2

5 Total Available Time This is the time that the plant is open and could be used for production. Planned Production Time This is the Total Available Time minus the Planned Shutdown Time. Planned Shutdown could include meal breaks, holiday shutdown and scheduled maintenance. Operating Time This is the difference between Planned Production Time and the time lost to downtime. Downtime events include equipment breakdown, unscheduled maintenance, setup time and changeover. This is included in the OEE calculations. Net Operating Time This is the difference between the Operating Time and time lost to Speed reduction. 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 the OEE calculations. Productive Time This is the difference between the Net Operating Time and the time lost to Quality issues. Quality losses include rejected and reworked products. This is included in the OEE calculations. TABLE 1 describes how each OEE Category is calculated. OEE Category Downtime Losses How it is Calculated Availability is the ratio of Operating Time to Planned Production Time (Operating Time is Planned Production Time less Downtime Loss). Availability of 100% means the process has been running with no stops. Availability = Operating Time / Planned Production Time Speed Losses Performance is the ratio of Actual Speed to Theoretical/Ideal Speed. Performance of 100% means the process has been consistently running at its theoretical maximum speed. Performance = Parts Produced / (Ideal Speed * Operating Time) Quality Losses Quality is the ratio of Good Parts to Total Parts. Quality of 100% means there have been no reject or rework parts. Quality = Good Parts / Parts Produced TABLE 1 OEE Calculations An Introduction to OEE Page 3

6 3.2. Defining OEE Events Within each OEE Category, there are several events that must be identified, and correctly measured and analyzed. There are situations (or events) that may require further thought to decide which category they belong to. For example, Short-lived stops and operator errors could be recorded as either Availability (Downtime) or Performance (Speed) losses. The correct categorization will be made based on the specific manufacturing process and plant. It is important to be consistent and uniform in categorizing events in order to get reliable results. As stated above, there are many events that affect OEE. However, there are those which are considered the most common causes for efficiency loss in the manufacturing environment. Naturally, by implementing an OEE practice, you must aim to reduce these commonly occurring loss events to increase the overall plant/manufacturing productivity. TABLE 2 provides a list of the Common Loss Events, and the categories to which they are attributed. Common Events OEE Category Comment Equipment Breakdowns Process Setup and Adjustments Availability Loss Depending on the specifics of the production environment, certain variety of breakdowns not requiring maintenance could be categorized as Performance/Speed Losses. Availability Loss Includes certain operator errors and product changeovers. Short Stops and Idling Reduced Speed Performance Loss Performance Loss Short stops are typically those which do not require maintenance. Generally, problems with consumables could be categorized as Performance/Speed Losses. Factors such as equipment age or production anomalies that keep the operation from running at the maximum theoretical speed would be included in this category. Startup Rejects Quality Loss Products lost (Rejected) during initial stages (transition) of startup prior to reaching steady state (regularly producing good products). Production Rejects Quality Loss Products lost (Rejected due to defect) during the normal production stages. TABLE 2 Common Loss Events An Introduction to OEE Page 4

7 3.3. What is Considered World Class OEE? The purpose of implementing an OEE program is to improve productivity. As we have already described, OEE his three main components (categories). It is important to know what you are aiming at achieving. What is considered to be World Class OEE? Are the components of OEE important by themselves? These are very significant questions. By general consensus, World Class OEE is 85% or higher. By contrast, most manufacturing plants have an OEE in the range of 30% to 60%. Additionally, it is not unusual for these plants to experience daily fluctuations of about 10%. Obviously, there is a lot of room for improvement. The components of a world class OEE are as shown in TABLE 3: OEE & its Components World Class Overall OEE 85.0% Availability 90.0% Performance 95.0% Quality 99.9% TABLE 3 World Class OEE Components Achieving world class OEE is quite challenging and requires a rather rigorous program that is consistently and religiously followed. This means regular measurements, analysis and taking action based on the findings. An important point to keep in mind is that you must look at all four numbers (OEE, Availability, Performance and Quality) together and individually. It is possible to have a reasonable OEE without having an acceptable productivity score. For example, if achieving higher OEE has been at the expense of lower quality (more reject/rework), in most cases the outcome is unacceptable. The OEE percentage by itself may not provide the right answer. You must scrutinize its components. An Introduction to OEE Page 5

8 4. A Real Example It is good to know what OEE and its components are. However, in order to have a good understanding of the concept, it is very helpful to look at a real example. Consider a beverage plant with the following production schedule for the Bottling Area: Item Data Days of Operation Planned 5 Number of Shifts Total Planned Shutdown Downtime Theoretical (Ideal) Rate Total Bottles Produced 1,656,502 Rejected Bottles 1, (3 per day, 8 Hrs, each) 2400 minutes (160 minutes/shift) 1250 minutes (for all shifts) 600 bpm (bottles per minute) TABLE 4 Production Data for Calculation of OEE and its Components Planned Production Time = Total Available Time Total Planned Shutdown = 7,200 2,400 = 4,800 minutes Operating Time = Planned Production Time Downtime = 4,800 1,250 = 3,550 minutes Good Bottles = Total Bottles Produced Rejected Bottles = 1,656,502 1,207 = 1,655,295 Bottles Availability = Operating Time / Planned Production Time = 3,550 minutes / 4,800 minutes = (or %) Performance = Bottles Produced / (Ideal Rate * Operating Time) = 1,656,502 / (600 bpm * 3,550 minutes) = (or 77.77%) Quality = Good Bottles / Total Bottles Produced = 1,655,295 Bottles / 1,656,502 = (or 99.93%) An Introduction to OEE Page 6

9 OEE = Availability * Performance * Quality = * * = (or 57.48%) Considering that OEE can also be defined as: Then: OEE = Productive Time / Planned Production Time Productive Time = OEE * Planned Production Time = * 4,800 minutes = 2, minutes Also, consider if downtimes and short-lived stoppages were reduced by 10% or 125 minutes, then the same factory would be able to produce 58,327 more bottle during the same 5-day period (assuming the same effective performance). With the wholesale price of each bottle at $0.85, during each 5-day period, the Bottling Area can produce $49,578 more sellable product. If the Bottling Area is operated 350 days during the year, the extra production will be worth $3,470, Conclusion Today s economy favors companies that boost revenue without sacrificing profitability and remain strong even when the financial markets decline. Increasingly, the financial analysts factor in a long-term debt-to-capital ratio to acknowledge those companies that achieve growth without accruing heavy debt. It is interesting to note that these companies manage to have higher revenues even when sales are lower. This feat, among others, is accomplished by a rigorous practice of productivity gains cost-cutting through increased efficiencies and maximizing returns on fixed assets. OEE can play a critical and increasingly valuable role in driving this bottom-line driven practice. An Introduction to OEE Page 7

10 6. Frequently Asked Questions about OEE 1) Do you define everything in numbers of parts, or units of time? The answer depends on what's most intuitive for you and your operators. You can actually mix and match. Availability is usually described in terms of hours or minutes. Performance is usually described in terms of parts per minute or hour. Other quantityrelated measurements like pounds, kilos or meters per unit of time may also be used. Most people talk about Quality as a ratio of good product to total production. But all of these are converted to a % that shows actual vs. potential. These numbers are naturally very revealing. 2) Is the final OEE composite number a "magic formula"? No - you definitely should not think of it that way! Let's say you have a process that gives you 89% availability, 86% performance and 98% quality, for a 75% total. Is that good or bad? Only you can decide. Now let's say that you played musical chairs with the numbers - 98% availability, 89% performance and 86% quality. Is a quality drop from 98% to 86% worth the dramatic improvement in availability? Most manufacturers would consider this tradeoff to be totally unacceptable. The beauty of OEE is not that it gives you one magic number; it's that it gives you three numbers, which are all useful individually as your situation changes from day to day. And it helps you visualize the total resources of your manufacturing in relation to what it actually produces - a very practical simplification. 3) Is OEE data subject to misinterpretation? Yes, without a doubt. The answer to the previous question is a great example of that. OEE tells you nothing about how much your resources actually cost in dollars, what the easiest improvement actually is, or how much it will cost you to make that improvement. What you should look for in OEE is losses and bottlenecks that can be eliminated for minimal cost. In most cases that is possible. OEE data is only meaningful in the context of your situation and your efforts to improve it. 4) How do you determine the "Theoretical Capacity" of a machine? The simple answer is the "name plate capacity" - the stated capacity given by the manufacturer of the machine. But like the speedometer in your car, this number may only be an approximation and may vary considerably with machine age and other circumstances. Ideally you should experiment, take measurements and come up with your own number. 5) For the purpose of measuring productivity, how do you define whether a machine is "producing" or not? If the machine is producing anything at all, then the production clock is running. An Introduction to OEE Page 8

11 6) How do you minimize number crunching, spreadsheets and reports and make OEE truly simple? Data isn't very useful if you don't get to see it until tomorrow. The printout in the engineering office isn't nearly as helpful as a display you can see from fifty feet away, right on the shop floor. We recommend use of OEE oriented visual displays, which can be plugged into a parts counting sensor and quickly configured to show relevant, realtime OEE data, already digested into a form that is useful to you and your operators. 7) What period of time do you use for an OEE test? You can choose any period you want. Most commonly it's based on the working cycle of the factory, i.e. one shift (8 hours or 480 minutes). 8) Is it possible to have processes that exceed 100%? No. If you obtain readings greater than 100%, then at some point you are not defining something correctly. It means that you were underestimating the capacity of a process when you input your parameters. 9) If you have a series of machines or stages in a cell with different capacities, which stage do you base your Theoretical Capacity on? The fastest stage (not the slowest). This forces you to recognize all other bottlenecks and strive to improve them - to do Kaizen, the Japanese philosophy of continuous improvement. 10) Do OEE benchmarks, i.e. Theoretical Capacity, ever change? Yes, but only if the fastest process or machine is improved. 11) Can OEE become a political football? Yes, to the extent that it is misinterpreted interpretation and to the extent that it is used for political purposes rather than genuine Kaizen. Of course that's true of all numbers and measurements. The important thing is to keep the core objective in mind: To produce more quality product with less waste and fewer headaches. Therefore you should be very clear about exactly what you want and make sure you are measuring it. Then you can create incentives for operators to deliver that result. 12) If there are several interpretations for the cause of a problem, where do you start? Always look for the simplest and most direct explanation. Obviously there are exceptions, but here's what's important: Rather than ponder and discuss 50 different causes, start with the most straightforward hypothesis and test it. Use a process of elimination until you are certain. An Introduction to OEE Page 9

12 13) Should preventative maintenance downtime be allowed to penalize an OEE performance calculation? If the preventative maintenance happens during production (rather than during scheduled downtime) then it is interfering with production and should be counted. This does not mean that you should not do preventative maintenance at that time; it only means that over a period of time, OEE will tell you whether this maintenance results in less overall downtime, because of fewer "surprises," or more downtime, because of the lost productivity while maintenance is done. In this way, OEE gives you solid answers to complex questions by attaching them to simple measurements. 14) Should re-worked parts be counted as good or bad in the OEE calculation? In OEE, any part that doesn't come out right the first time is a bad part. It's an equipment issue. Your strategy for improving original part quality vs. reworking old parts is a separate management and financial issue. 15) If a process can run during scheduled breaks, then is that break time factored into equipment availability? A personnel break is not necessarily the same as a machine break. If the machine is running (i.e. producing anything at all) then regardless of whoever is or isn't eating lunch, OEE considers the machine to be on - the clock is running. 16) How does OEE relate to the management function of helping machine operators? The true value of OEE is in helping you and your operators make systematic improvements. Therefore everything you do with OEE, including the visual display of OEE data, should be designed with operators in mind and stated in whatever terms they most easily understand. An Introduction to OEE Page 10

13 7. OEE Glossary of Terms Term Definition Implication Adjustment Time Availability Best Practice Breakdowns Productive time lost while tweaking equipment Possible production time after all shut downs, planned and unplanned, are subtracted. The ratio of Operating Time to Planned Production Time Methods that are considered state of the art by the most respected in an industry Lost time due to equipment failure, a Downtime Loss Can be a significant loss factor Theoretical maximum benchmark that OEE is measured against Successful companies use different methods than unsuccessful companies Cost of maintenance must be weighted against production losses & optimized Changeover Time Downtime Loss Event Lost time due to swapping of equipment, connections or materials Production time lost to unplanned shutdowns In OEE, a production loss which must be categorized A prime candidate for improvement for most people Major focus area for improvement OEE s purpose is to clarify the nature and effect of Events Fully Productive Time Actual productive time after ALL losses are subtracted The true bottom line of your facility's use of time Ideal Cycle Time Ideal Run Rate Theoretical minimum time between parts Theoretical maximum production rate A crucial calculation for setting OEE values The inverse of Ideal Cycle Time An Introduction to OEE Page 11

14 Term Definition Implication Kaizen Continuous improvement Japanese concept so important, it's now part of the English language Lean Manufacturing Minimum Cycle Time Net Operating Time Quality philosophy that minimizes consumption of resources that add no value to the finished product The rate at which the fastest stage in production can produce products True productive time before product quality losses are subtracted, Operating time minus Speed Loss Focus is eliminating waste: unnecessary motion, overproduction and Work In Progress OEE measures against the fastest stage. What is measured varies with product/process Equipment time losses normally are much larger than defect losses OEE (Overall Equipment Effectiveness) Operating time Performance Framework for measuring the Six Big Losses for continuous equipment improvement Productive time available after unplanned shutdowns are subtracted The rate at which equipment converts available time into product OEE helps you see and measure a problem so you can fix it Does not include Downtime Loss, does include Speed Loss Calculation excludes availability and quality losses Planned Production Time Total time that equipment is expected to produce Only excludes planned downtime, i.e. lunches & breaks Planned Shut Down Deliberate unproductive time Excluded from all OEE calculations Plant Operating Time The time the factory is open and capable of equipment operation Theoretical maximum benchmark that OEE is measured against Production Rejects Reduced Speed Parts which do not meet quality standards See Speed Loss OEE views defects in terms of lost time An Introduction to OEE Page 12

15 Term Definition Implication Quality % of parts which meet spec OEE recognizes quality as only one aspect of equipment utilization Quality Loss % of parts which do not meet spec OEE views defects in terms of lost time Setup/Adjustments Time lost configuring equipment Typically a major target for improvement Major Losses The major categories of equipment production loss: Breakdowns, Setup/Adjustments, Small Stops/Idling, Speed Loss, Startup Rejects, Production Rejects One of the reasons OEE is so practical is that it clearly isolates these six different issues so they can be addressed individually Six Sigma Small Stops/Idling Systematic quality program that strives for 6 standard deviations between the mean and the nearest specification limit Brief pauses not normally thought of as downtime, a Speed Loss In extremely high quality processes, rejects will be the smallest of the Six Big Losses Idling is an "insidious" as opposed to "obvious" loss of time, but still costs you money Speed Loss Standby Startup Rejects Theoretical Cycle Time Lost productivity due to equipment running below maximum speed Time spent during setup, adjustment & breakdowns Rejects produced while equipment is adjusted for production, a Quality Loss See "Minimum Cycle Time" see "minimum cycle time" Not to be confused with "idle time" OEE views this as a major loss to be reduced An Introduction to OEE Page 13

16 Term Definition Implication Total Productive Maintenance (TPM) Maintenance system covering life of all equipment: planning, manufacturing, and maintenance and improving performance via elimination of the six major types of waste OEE is the formula for defining equipment effectiveness in a TPM program World Class OEE 95% Availability, 95% performance & 99.9% quality, with total of 85% effectiveness A composite OEE number means very little without the total context TABLE 5 OEE-Related Terms An Introduction to OEE Page 14

17 ABOUT PARSEC Parsec Automation Corp. (Parsec) is the developer of TrakSYS, the leading realtime performance management (RPM) and decision support software. Manufacturing companies worldwide rely on Parsec for flexible and configurable tools to quickly track, record, analyze, and report the events critical to productivity enhancement. Without production disruption TrakSYS helps manufacturers to significantly improve asset utilization and efficiency, increase capacity with no new capital equipment, reduce production costs, and improve profitability. With measureable ROI TrakSYS fuels Lean, Six Sigma, TPM, and Operational Excellence efforts. For more information about Parsec please visit the corporate web site at Parsec Automation Corp. All rights reserved. TrakSYS, LOGICTrak, MODELTrak, INTELLITrak, GLOBALTrak, EVENTTrak, ALERTTrak, SENSORTrak, LEANTrak, PRODUCTTrak, WEBTrak, HISTORITrak, AUDITTrak, IMPROVETrak, SPCTrak, and any other Parsec products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Parsec Automation Corp. All other products and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. An Introduction to OEE Page 15

18 TERMS AND CONDITIONS OF USE Upon receipt of this electronic publication, it is understood that the user will and must fully comply with the terms and conditions of use as stipulated herein. This publication is protected by United States copyright laws and international treaties. Unless otherwise noted, the entire contents of this publication are copyrighted by Parsec Automation Corp., and may not be reproduced, stored in another retrieval system, posted on any Website, or transmitted in any form or by any means without prior written consent of Parsec Automation Corp. Unauthorized reproduction or distribution of this publication, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent necessary to protect the rights of Parsec Automation Corp. The trademarks and registered trademarks of the corporations mentioned in this publication are the property of their respective holders. All information contained in this report is current as of publication date. Information contained in this publication has been obtained from sources Parsec Automation Corp. believes to be reliable, but is not warranted by the publisher. Opinions in this publication reflect judgment at the time of publication and are subject to change without notice. THIS DOCUMENT IS FOR ELECTRONIC DELIVERY ONLY The following are prohibited: 1. Transmittal via the Internet 2. Reproduction for Sale 3. Posting on any Website An Introduction to OEE Page 16