OEE Calculation | Definition | Examples | Lean Tool

What is OEE (Overall Equipment Effectiveness)?

→ OEE (Overall Equipment Effectiveness) is an index to judge production run in terms of machine (equipment) availability, production rate & quality rate of the product.
→ For TPM (Total Productive Maintenance) and Lean Manufacturing programs, OEE is a key metric.
→ It is an important characteristic of capacity planning, material planning, and other resource planning.
→ OEE is also known as TEEP (Total effective equipment performance).
→ Overall Equipment Effectiveness is a Lean Manufacturing Tool.

Basics of OEE (Overall Equipment Effectiveness)

→ There are three parameters for OEE (Overall Equipment Effectiveness) monitoring
  1. Availability
  2. Performance
  3. Quality

[1] Availability:
→ Availability shows the machine available duration for manufacturing.
→ In other words, for how much time our machine is available for manufacturing.
→ Availability takes into account of Breakdown Losses.
→ Downtime losses include events or incidents that lead to a stoppage of planned production for a considerable duration.
→ After removing, downtime we can get the operating duration of the machine.
➨ Examples of Downtime:
     ⇢ Equipment failure,
     ⇢ Material shortage,
     ⇢ Excess change over timing, etc...

[2] Performance:
→ Performance shows the excess time taken for manufacturing as compared to standard operating timing.
→ The performance takes into account of Speed Losses.
→ The Speed Losses includes any factor that leads to operating production with more cycle time than maximum permissible.
➨ Examples of performance losses:
     ⇢ Low speed of job loading/unloading,
     ⇢ Fatigue of the operator,
     ⇢ Excess cycle time in manual work, etc...

[3] Quality:
→ Quality shows the Good Quality of Product.
→ It takes into account the quality losses (loss due to the manufacturing of a bad part).
→ Quality loss can only be present due to the manufacturing of a defective part or non-conforming part.

➨ OEE Calculation is mentioned in the below picture.

OEE Calculation

Times and Losses Calculation in OEE:

→ Planned Shutdown – Not part of Overall Equipment Effectiveness Calculation.
→ Break Down Loss - Operating timing to Planned Manufacturing timing ratio is called availability when a process runs without any stoppage there will be 100% availability.
→ Speed Loss – It is the ratio of net operating timing to total operating timing or it can be calculated by actual cycle time / ideal cycle time. When the process runs with maximum theoretical speed then performance will be 100%.
→ Quality Loss- it is the ratio of total good parts to a total part produced. When all produced parts are good then there will be 100% quality.

Times and Losses Calculation in OEE

Example of OEE Calculation:

→ Let’s assume below data to understand Overall Equipment Effectiveness calculation
→ Shift Duration = 8 Hours (480 Minutes)
→ Total Breaks = 55 Minutes
→ Break Down = 40 Minutes
→ Ideal Production Rate = 1 Part per Minute
→ Total Part Produced = 350
→ Rejected Parts = 4
➨ Planned Production duration = Total Available Time – Planned Breaks
                                                    = 480 Minutes – 55 Minutes
                                                    = 425 Minutes
➨ Actual Production duration = Planned Production duration – stops (breakdowns)
                                                  = 425 Minutes – 40 Minutes
                                                  = 385 Minutes
➨ Availability (A) = Actual Production Time/Planned Production Time
                               = 385/425 Minutes
                               = 0.905
➨ Actual Production Rate  = Total Count/Total Run Timing
                                             = 350/385
                                             = 0.909
 ➨ Performance (P) = Actual Production Rate/Ideal Production Rate
                                 = 0.909/1.0
                                 = 0.909
➨ Quality (Q) = Good Parts/Total Parts Produced
                        = (350-4)/350
                        = 0.988
➨ OEE = Availability (A) x Performance (P) x Quality (Q)
              = 0.905 x 0.909 x 0.988
              = 0.812 ~ 81.2 %

Six Big Losses in OEE

  1. Breakdowns
  2. Setup and Adjustment
  3. Small Stops
  4. Reduced Speed
  5. Start-up Rejects
  6. Manufacturing Rejects
Six Big Losses in OEE

[1] Breakdowns:

→ The breakdown comes under the Category - Downtime Loss.
→ Unplanned downtime elimination is critical.
→ Preventive maintenance is a key weapon to kill unnecessary breakdowns.
→ Root cause analysis can be done on severe breakdowns.
→ Timely validation of tools is also important in order to prevent unplanned downtime.
→ Prediction of an equipment failure is a key skill of engineering that helps a lot in the prevention of downtime.
➨ Examples of Breakdown Losses:
     ⇢ Tooling Failure,
     ⇢ Unplanned Maintenance,
     ⇢ Equipment Failure,
     ⇢ General Breakdowns, etc...

[2] Setup and Adjustment:

→ Setup and Adjustment come under the Category - Downtime Loss.
→ It is generally called duration between the last good part produced before setup change and the first good part produced after the changeover.
→ Tracking of adjustment timing is very important in reducing this loss.
→ We can use the concept of SMED (Single Minute Exchange of Dies) for reducing the Setup and Adjustment timing.
➨ Examples of Setup and Adjustment:
     ⇢ Excess setup/change over timing,
     ⇢ Material shortage,
     ⇢ Operator shortage,
     ⇢ warm-up timing, etc...

[3] Small Stops:

→ Small Stops comes under the Category - Speed Loss.
→ Recording of this type of loss is very difficult.
→ Cycle time analysis to be used to identify this type of loss.
→ Activity wise actual-time monitoring and micro-mapping of this data help in the identification of small stops and speed reduction.
➨Examples of Small Stops:
     ⇢ Component jam,
     ⇢ Sensor blocked,
     ⇢ Delivery blocked,
     ⇢ Cleaning and Checking, etc...

[4] Reduced Speed:

→ Reduced Speed comes under the Category - Speed Loss
→ Recording of Reduced Speed losses is very difficult.
→ It can be recorded by Cycle time analysis.
➨ Examples of Reduced Speed:
     ⇢ Poor planning,
     ⇢ Machine wear and tear,
     ⇢ Operator inefficiency,
     ⇢ Under design capacity, etc...

[5] Start-up Rejects:

→ Start-up Reject comes under the Category - Quality Loss.
→ “First Time Right” concept to be adopted during each startup of production.
→ Effective use of production start-up check sheet can eliminate start-up rejects.
→ The process parameter setting plays a vital role in the manufacturing of the good part at the first time.
➨ Examples of the Start-up Rejects:
     ⇢ Damage,
     ⇢ Scrap,
     ⇢ Rework,
     ⇢ Incorrect assembly, etc..

[6] Manufacturing Rejects:

→ Manufacturing Reject comes under the Category - Quality Loss
→ It is related to the rejection during the manufacturing
➨ Examples of the manufacturing Rejects
     ⇢ Damage,
     ⇢ Scrap,
     ⇢ Rework,
     ⇢ Incorrect assembly, etc...

Benefits of OEE:

→ It helps us to set goals for improvement, and track the progress.
→ Overall Equipment Effectiveness helps us to find inefficiencies in the operation process.
→ It Provides us a benchmark data for the new process setup.
→ Overall Equipment Effectiveness helps to track progress in eliminating waste from an operation process.

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