Understanding, Measuring, and Improving Overall Equipment Effectiveness How to Use OEE to Drive Significant Process Improvement http://taylorandfrancis.com Understanding, Measuring, and Improving Overall Equipment Effectiveness How to Use OEE to Drive Significant Process Improvement Ross Kenneth Kennedy CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2018 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed on acid-free paper International Standard Book Number-13: 978-1-138-05420-2 (Paperback) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the con- sequences of their use. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com Contents 1 Understanding OEE ...........................................................................1 Responsibility and Accountability for OEE .......................................................2 Calculating OEE .................................................................................................4 Using Equations .............................................................................................4 Using the Time Loss or the Unit Loss Model ................................................5 What Is Best Practice OEE? ................................................................................5 The Need to Understand and Monitor the Elements of OEE ...........................6 Why Is OEE Often Measured Incorrectly? .........................................................7 What Should Be the Purpose of OEE? ..............................................................8 OEE as a “Driver” for Improvement ..................................................................9 If You Shouldn’t Benchmark OEE, What Should It Be Used for? ....................9 The Challenge of Productivity and OEE ..........................................................11 Key Learnings from Chapter 1.........................................................................12 2 Measuring OEE ................................................................................13 The Need for Standard Definitions .................................................................13 The Need to Determine the Operational Situation .........................................14 Equipment Performance Definitions ................................................................15 Line Utilization (LU) ......................................................................................15 Overall Equipment Effectiveness (OEE) .......................................................16 Production Efficiency (PE) ............................................................................16 Example Definitions Related to Equipment Losses ......................................16 Key Learnings from Chapter 2.........................................................................18 3 Calculating OEE ............................................................................... 19 Using the Loss Information .............................................................................21 Key Learnings from Chapter 3.........................................................................25 4 Improving OEE ................................................................................27 What Affects the OEE Losses? .........................................................................27 Capturing OEE Loss Analysis Data .................................................................28 Conducting an OEE Loss Analysis ..................................................................29 Getting Started .............................................................................................29 Preparation before Kicking-Off Teams .........................................................31 v vi ◾ Contents Preparation Analysis for a Macro Focused Equipment & Process Improvement Team ......................................................................................33 Example Raw Materials/Inputs Sheet ..........................................................35 OEE Loss Analysis Spreadsheet .......................................................................39 Develop Your Planned Downtime Model for the Production Area or Line ..........................................................................................................39 Establish Your OEE Baseline ...........................................................................39 Provide OEE Training for Team Members ......................................................40 Team Kick-Off Workshop ................................................................................40 Key Learnings from Chapter 4.........................................................................41 5 Using the OEE Loss Analysis Spreadsheet .......................................43 Sheet 1: Second-Level OEE Loss Analysis Sheet .............................................43 Capture the Continuous Recording Data ....................................................44 Conduct Observations ..................................................................................48 Populate the Second-Level OEE Loss Analysis Sheet ..................................51 Sheet 2: Second-Level OEE Loss Summary Sheet ...........................................52 Sheet 3: First-Level OEE Loss Analysis Sheet ..................................................55 Sheet 4: Second-Level OEE Improvement Visions Sheet ................................55 Sheet 5: Second-Level OEE Improvement Gap High-Level Opportunity Analysis Sheet ..................................................................................................60 Sheet 6: Second-Level OEE Improvement Targets Sheet ................................63 Sheet 7: Production Area or Line Cost–Benefit Sheet .....................................66 Sheet 8: First-Level OEE Improvement Summary Sheet ..................................67 Key Learnings from Chapter 5..........................................................................67 6 Automating OEE Data Capture ........................................................ 71 When Should We Automate? ...........................................................................71 What Should Be Considered When Selecting the Software? ..........................72 1. Accessibility ..............................................................................................72 2. Information Design ..................................................................................73 3. Reporting Capability ................................................................................75 4. Integration ................................................................................................75 5. All-in-One versus Best-of-Breed ..............................................................76 How Do We Ensure We Are Capturing the Right Information? ....................76 How Do We Want the Information Displayed/Accessed? ..............................77 Defining the Purpose of the Loss Data Capture System ................................77 Key Learnings from Chapter 6.........................................................................78 Appendix: OEE Improvement Rating .....................................................79 Index ...................................................................................................... 81 About the Author ....................................................................................85 Chapter 1 Understanding OEE The concept of Overall Equipment Effectiveness (OEE) was first written about in 1989 from a book called TPM Development Program: Implementing Total Productive Maintenance edited by Seiichi Nakajima from the Japan Institute of Plant Maintenance. This was translated from the Japanese book TPM tenkai pub- lished in 1982. Before OEE, people monitored equipment performance through Availability or Downtime. This was fine until it was realized that you could have the same downtime for the same piece of equipment over different timeframes yet get a different output. For example, if a line’s performance is measured over 100 hours and dur- ing this time it has one breakdown for 10 hours, Availability will be 90% and Downtime will be 10%. If the same line over another 100 hours had 10 break- downs of 1 hour duration (total of 10 hours), then Availability would still be 90% and Downtime would be 10% (Figure 1.1). However, when comparing output, in the majority of cases, the first situation of only one breakdown will produce significantly more output than the situation of 10 breakdowns. The logic is quite simple. Every time your plant stops unex- pectedly, there is a high probability you will have some form of quality loss such as scrap or rework. Also, when you start back up again, there is a high probabil- ity that there will be a speed loss as you ramp the plant back up to full speed. Hence, there was a need to create a measure that would reflect all losses that can affect the capacity to produce perfect, or within-specification, output first up. Ideally, the measure could also be used for prioritizing improvement activities while bringing everyone together to improve, as everyone would benefit from its improvement. This is why OEE was developed. It was the first time you could measure how effective your equipment was at producing good output, recognizing that equip- ment is only effective if it is available when required, running at the ideal speed, and producing perfect or within-specification output. 1 2 ◾ Understanding, Measuring, and Improving Overall Equipment Effectiveness Situation 1: 10 hours brea kdown every 90 hours 100 hours Runs 90 hours Stops Runs 10 hours Situation 2: 1 hour breakdown every 9 hours  100 hours Runs Runs Runs Runs Runs Runs Runs Runs Runs Runs 9 h ours 9 hours 9 h ours 9 h ours 9 hours 9 hours 9 h ours 9 h ours 9 hours  9 h ours Runs Situation 1   Situation 2   Availability: 90% Availability: 90% Downtime: 10% Downtime: 10% Figure 1.1 Limitations of downtime as a measure. Nakajima wrote: Effectiveness can be measured using the following formula: OOvveerraallll EEqquuiippmmeenntt EEffffeeccttiivveenneessss = AAvvaaiillaabbiilliittyy × PPeerrrrffoorrmmaannccee rraattee×QQuuaalliittyy rraattee with the 6 Big Losses affecting OEE listed as follows: Availability Performance Rate Quality Rate • Breakdown losses • Idling and minor stoppage • Quality defect and • Setup and adjustment losses rework losses losses • Reduced speed losses • Start-up (yield) losses In more recent literature, the OEE loss model has been expanded to include a further loss, Planned Downtime under Availability, creating 7 Losses (Figure 1.2). The aim of the 7 Losses is to capture all possible losses that could be improved operationally including such Planned Downtime as meal breaks, regular maintenance periods, start of shift, toolbox meetings, and so on. Responsibility and Accountability for OEE To understand who should be responsible and accountable for OEE, we have found it helpful to first identify some of the activities that may need to be addressed to eliminate or minimize the losses. For example: ◾ Detect and Predict Deterioration ◾ Establish Repair Methods Understanding OEE ◾ 3 ◾ Restore Deterioration ◾ Maintain Operating Standards ◾ Maintain Basic Equipment Conditions ◾ Prevent Incorrect Operation ◾ Prevent Repair Errors ◾ Improve Design Weaknesses Then, ask the question: who should be involved in carrying out these activities? The answer becomes obvious in that OEE Improvement involves all depart- ments including the following: Production, Maintenance, Engineering, Quality, HR/Training, Procurement, and Planning and Scheduling. However, one department needs to take full responsibility for the cost- effective performance of their plant and equipment and be accountable for the OEE. If we think about our car, it is the way we drive it, the environment we keep it in, the frequency we get it serviced, and, most importantly, the timeliness we respond to any little problems we may encounter that has the biggest impact on the overall running cost and resale value of our car. Production Plant and Equipment is no different. The way we operate it, the condi- tion we keep it in, the frequency we allow maintenance to do their servicing, and the way we identify and respond to small problems before they become big prob- lems all contribute significantly to the plant performance and the maintenance costs. That is why the Production department must take full responsibility and accountability for OEE, recognizing they can’t achieve best practice without every other department’s support. 7 Losses Target Planned Minimize Downtime Setup or Changeover Availability Downtime Minimize A Unplanned Recorded Downtime Zero Minor Unrecorded Overall Stoppages Zero Equipment R Performance Effectiveness Rate Reduced Speed Minimize Rejects and Rework Zero Q Quality Start-upand Yield Minimize Figure 1.2 OEE Model.