What is OEE (Overall Equipment Effectiveness)?

OEE is one of the lean manufacturing tools for measuring the performance effectiveness of different machines. OEE is one of the better & effective ways to measure performance as per world-class guidelines. Now a day in a competitive environment very important to measure the performance of machines. In many industries measure machine performance based on production basis but that is not an effective way & not give accurate results each time.

To implement lean manufacturing different tools, each & every tool co-relate with each other. If you improvise OEE parameters you are required to also work with 6 ‘S’, Kaizen, Poka-yoke, and SMED. very important to conduct the work-study of processes or machines required for improvement.

History of Overall Equipment Effectiveness(OEE)

OEE term invented year – 1960.

Invented By – Seiichi Nakajima.

OEE is developed based on Harrington Emerson’s thinking which affects work efficiency.

What is OEE (Overall Equipment Effectiveness)?

OEE is a basically performance improvement tool for different machines. OEE calculation includes three parameters availability, performance & quality. Availability means how much time a machine or equipment is available to perform the operation, that is a user-defined parameter. Performance measures work effectiveness towards work. Quality is producing no good products compared with total production.

OEE is one of the basic requirements of IATF standard 16949:2016 & a key performance improvement matrix to implement TPM.

After the basic understanding of OEE & its formula, let’s jump to understanding the individual pillar of OEE.

1. Availability

Availability is the first stage to calculating overall equipment effectiveness. Availability includes the involvement of management, the production team & maintenance team. To review the attached formula of availability calculation & now understand each term of availability in detail.

Planned available time – The management of any organization is authorized to set planned available time. Generally, in any organization calculating OEE shift-wise, we consider the total available time per shift to be 480 min. Management is planning to give 30 min lunch time & 10 min refreshment time per shift.

Planned available time = Total time per shift – planned break time.

Here, Planned available time = 480 – 30 – 10 = 440 min.

Actual available time = planned available time – planned downtime – unplanned downtime.

Actual available time – Actual available time means the machine is actually ready for production without any other disturbances like –

Consider changeover time and set-up and adjustment time for planned downtime.

Consider machine breakdown and machine idle due to machine parts unavailability in unplanned downtime.

2. Performance

After availability calculation, the second stage of OEE calculation is performed. The majority in the performance stage the key role is the production department & term is related to the performance of machines & manpower. Now, understand performance parameters.

Planned production time = Actual available time (means the machine is ready to produce products)

Actual production time = planned production time – time loss due to minor stoppages – time loss due to the machine working at a slow speed.

Actual production time – Actual production time means the machine is focused on only producing the product without loss of performance & machine-like – minor stoppages due to a machine error or manpower issues, the machine works with a slow cycle compared to its standard design.

3. Quality

Quality is a third pillar of OEE. Due to a machine error or manpower error chances to produce defective products. Identification & measure correct quality products is a very important task for customer satisfaction. The quality department is monitoring the quality of products but defective products are generated through the production department.

In OEE calculation quality includes only two parameters that are easily measurable. First, is the good quantity produced & second is the total quantity produced – shift-wise.

Quality = no of good quantity produced / no of total quantity produced

Six big losses of OEE (Overall Equipment Effectiveness)

Review the attached photographs for a basic understanding of the six big losses and what are the key important activity consider improving overall equipment effectiveness parameters.

Why are OEE Parameters to be monitored?

• Identify & reduce unplanned stoppages during the production process.
• Monitor & reduce set-up as well as changeover time.
• Monitor & improve operator productivity.
• Identify bottlenecks & constraints from processes.
• To improve on-time delivery.
• To monitor & improve quality effectiveness.

Example

One of the automobile component manufacturing companies measuring the performance of different machines with overall equipment effectiveness parameters. Starting in Jan month one operator operated CNC Machine, this machine is semi-automatic & operator’s work is item loading as well as item unloading. Machine working on 6 days per week & 3 Shift Per Day (8 hours per shift), Planned break time per shift is (Lunch break – 40 min, 15 Min – Refreshment time), Management wants to OEE calculation for one shift & go through detail attached simultaneously. Production in-charge plan planned maintenance of the machine for 30 Min, & 20 min emergency breakdown running, three times per shift tool changeover (Each 9 Min), operator late came & early going shift start (12 Min Each), during shift running operator spend 10 min to searching time of needed items. As Per Quality Point of View out of 2340 Pcs 26 Pcs Rework & 6 Pcs Rejections. Also calculate the percentage of availability, performance & quality.

Solution

Given data in terms of OEE parameters

Available time per shift = 8 hours = 480 min.

Planned break time per shift = 40 (lunchtime) + 15 (refreshment time) = 55 min.

Planned downtime = 30 min (planned maintenance)

Unplanned downtime = 20 min. (emergency breakdown)

Tool changeover = 3 * 9 = 27 min (three times tool change)

Operator irregularity = 12 * 2 = 24 min (shift starting & shift ending)

Searching time = 10 min.

The number of good products produced = 2340 (total product produced) – 26 (rework) – 6 (rejection) = 2308 Nos.

No of defective product produced = 26 (rework) + 6 (rejection) = 32 Nos.

Availability calculation

Availability = Actual available time / Planned available time

Planned available time = 480 (shift time) – 55 (planned break time) = 425 min.

Actual available time = 425 (planned available time) – 30 (planned downtime) – 20 (unplanned downtime) = 375 min.

Availability = 375 (actual available time) / 425 (planned available time) = 0.88235 = 88.24%

Performance calculation

Performance = actual production time / planned production time

Planned production time = actual available time = 375 min.

Actual production time = 375 (planned production time) – 27 (tool changeover time) – 24 (operator irregularity) – 10 (searching time) = 314 min.

Performance = 314 (actual production time) / 375 (planned production time) = 0.8373 = 83.73%

Quality calculation

Quality = no of good quantity produced / no of total quantity produced

Quality = 2308 / 2340 = 0.9863 = 98.63 %

OEE calculation

OEE = Availability * Performance * Quality

OEE = 0.8823 * 0.8373 * 0.9863 = 0.7286 = 72.87%

Review below attached world-class standard of OEE & review the internal organizational process for improvement scope identification.

OEE Improvement Plan

Review the attached listed 10 important key points to monitor on regular basis for the OEE improvement plan. The very important basic key point is to analyze loss during production activity. I covered each majority activity in an informative image. You are required to focus the majority on system improvement, machine reliability & manpower effectiveness.

Use lean manufacturing tools such as kaizen for small improvements, SMED for reducing changeover, TPM for better machine reliability, Poka Yoke for reducing defect errors, 6 ‘S’ Methodology for workplace arrangement & 8 waste to for process optimization.