Introduction
OEE is a simple & practical approach for measuring manufacturing productivity. It incorporates Process Availability, Performance & Quality in single metric. This metric considers most common and important causes of production losses, so that the scope of improvement is in three major categories. OEE is many a times used as one of the key guege in TPM (Total Productive Maintenance) and LEAN Manufacturing programmes.
Measuring OEE is a manufacturing best practice. By measuring OEE and the underlying losses, one will gain important insights on how to systematically improve one’s manufacturing process. OEE is the single best metric for identifying losses, benchmarking progress, and improving the productivity of manufacturing equipment (i.e., eliminating waste).
Formula
OEE = A * P * Q
Where,
A stands for Availability
P stands for Performance
Q stands for Quality
A = Operating Time / Planned Production Time
P = Actual Cycle Time / Ideal Cycle Time
Q = Acceptable O/p / Total O/p
Parameters
Availability - This takes into account unplanned & planned stoppages. This is the actual time for producing a product or to deliver a service divided by planned production / delivery time. Planned time excludes all scheduled maintenance, lunch time, all breaks, holidays, non-working factory days and so on. The remaining portion of planned time is actual production time and down time.
Performance - This compares ideal cycle time with actual cycle time. In which it takes into account reduced speed against rated speed, small stoppage due to unavailability of material etc.
Quality - This compares Acceptable produced products with Total output of the line.
Example of OEE
Assume a spices manufacturing unit both single & blended spices in multiple SKUs with wide product range.
This unit runs one shift of 9 hrs (540 min). In this there are two tea breaks of 30 min each. There is one meal break of 30 min.
On a specific day, the calculated downtime on is 55 min. The ideal production rate is 100 pouches per minute on process line. Total pouches produced on that day are 25,328 pouches. Out of which rejected pouches are 635 pouches. Calculate the OEE.
Step I –
Planned Production time = Shift Time – All Breaks Time = 540 mins – 60 mins
= 480 mins
Operating Time = Planned Production time – Down time
= 480 mins – 55 mins
= 425 mins
Accepted O/P = Total O/p – Rejected O/p
= 25328 pouches – 635 pouches
= 24693
Step II –
A = Operating Time / Planned production time
= 425 mins / 480 mins
= 0.8854
= 88.54 %
P = (Total O/p / Operating Time) / Ideal run rate
= (25328 pouches / 425 mins) / 100 pouches
= 0.5959
= 59.59 %
Q = Accepted O/P / Total O/P
= 24693 pouches / 25328 pouches
= 0.9749
= 97.49 %
OEE = A * P * Q
= 0.8854 * 0.5959 * 0.9749
= 0.5143
= 51.43 %
Improving OEE
In a team of manufacturing process everyone can contribute to improve OEE. Majorly operators, machine attendants, supervisors, technicians, shop floor managers, online QC and so on can play a vital role in improving OEE.
OEE is most commonly applied to discrete manufacturing processes (i.e., processes that make individual parts). However, OEE can also be applied to continuous processes (e.g. refineries). The key thing to remember is that OEE identifies the ratio of Fully Productive Time (actual output) to Planned Production Time (theoretically possible output). The difference between the two is waste – lost time that could be used for manufacturing.
OEE can also be applied to manual processes, but you may want to consider a variant known as OLE (Overall Labor Effectiveness). OEE is designed to measure equipment effectiveness. OLE is designed to measure labour (workforce) effectiveness. Another option is to simply measure labour productivity (parts per person hour).
But how to improve OEE. Is there a methodology or metric available for this? The answer is yes! You can work on six big losses to improve the OEE. Let’s see what are the six big losses:
Six Big Losses
1. Breakdowns –
OEE factor – Availability
Examples –
n Machine stopped because of failures (part damaged/ non-functioning of hardware, mechanical misalignment etc.)
n Faulty Automation
2. Set Up & Adjustments –
OEE factor – Availability
Examples –
- Product changeover or SKU changeover
- Periodic tests to verify the process quality or capability
- Various machine settings
- Mechanical adjustments
3. Small Stops –
OEE factor – Performance
Examples –
- Unavailability of material on line or from previous process
- Operators pause to tweak equipment
4. Reduced Speed –
OEE factor – Performance
Examples –
- Actual running speed is lesser than rated/desired speed
5. Startup Rejects –
OEE factor – Quality
Examples –
- This occurs because of machine ramp up time
- Tools need to be warmed up or need some adjustment
- Eye liner setting needs to be adjusted
- Maintaining parameters like weight, colour etc. needs to be adjusted till settled
6. Production Rejects –
OEE factor – Quality
Examples –
Process defects
- Online parameters mismatch
- Misalignment of machine
- Manual errors etc.
To summarise, OEE is the gold standard for measuring manufacturing productivity. Simply put – it identifies the percentage of manufacturing time that is truly productive. An OEE score of 100% means you are manufacturing only Good Parts, as fast as possible, with no Stop Time. In the language of OEE that means 100% Quality (only Good Parts), 100% Performance (as fast as possible), and 100% Availability (no Stop Time).
The three most popular manufacturing improvement methodologies are Lean Manufacturing, Six Sigma, and Theory of Constraints. OEE was developed as part of Lean Manufacturing – specifically as part of the powerful and holistic improvement process known as TPM (Total Productive Maintenance).
All of these methodologies have a great deal to offer for manufacturing improvement. None of these methodologies are easy. As a result, we are often asked – is there a way to get started while we put a comprehensive programme in place? The answer is yes.
(Thorat is a consultant at IBC, Navi Mumbai, and Indani is head of food safety at SafeFoodz Solutions, Navi Mumbai. They can be contacted at safefoodz@gmail.com)