Our previous post ‘Modern Producton Metrics – OEE‘ explains that OEE is a measure of how effectively we are using our equipment (ie how much of our time is spent producing good products compared with how much time we planned to operate).

Very simply we can say that

 OEE = (Fully Productive Time) / (Planned Operating Time)

Where Fully Productive Time is equivalent to (No. of Good Parts) x (Standard Time to produce 1 Part)
and Planned Operating Time is equivalent to (Total Time) – (All Planned Downtime)

Expressed as a percentage this simple calculation gives us our headline OEE value.

Simple Example:
Over a 12hour shift, our Filling machine fills 11,000 bottles. The manufacturer has specified that the Standard Time for this Filler to fill one bottle is .05mins/bottle.

Therefore our Fully Productive Time = (11,000) x (0.05) = 550mins

Over the course of the shift there are some Planned Downtimes: 2 x 15minute tea breaks and 1 x 30minute lunch break.

Thus the Planned Operating Time = (12hrs) – (2 x 15mins + 1 x 30mins) = 660mins

Giving us an OEE = (550) / (660) = 0.833 = 83.3%

Note we have lost out on 110minutes of possible productive time.

Now we know how effective we were but we have no idea where we lost time. Typically at this point various stake holders might suggest that the losses are due to one thing or another. These suggested losses are generally not based on any objective data. Before investing in improvement activity we need more definition on the causes of our 110minute loss.

The beauty of the OEE system is that it is much more than a simple measure of overall equipment effectivity. It also provides a framework for measuring and categorising losses in a manner which simplifies the analysis of the losses. This categorised framework helps greatly to identify the major losses and sets us on the path to finding and eliminating the root causes.

3 basic categories of losses

The OEE system considers that there are 3 basic categories of losses (OEE Level 1 Losses);

 Availability Losses: time lost due to Breakdowns and Changeovers
 Performance Losses: time lost due to Short Stops and Speed Loss (Slow Running)
 Quality Losses: time lost producing defect parts

In our previous post (Modern Production Metrics – OEE) we have explained that this categorisation of losses leads to 3 further KPIs

•  Availability: a measure of Uptime versus Planned Operating Time
    = ((Planned Operating Time) – (All Availability Losses)) / (Planned Operating Time)
    = (Actual Operating Time) / (Planned Operating Time)
   
•  Performance: a measure of the actual machine Cycle Time versus the Standard(ideal) Time
    = ((Actual Operating Time) – (All Performance Losses)) / (Actual Operating Time)
    = (Net Operating Time) / (Actual Operating Time)
   
•  Quality: a measure of the time spent producing Good Parts versus the time making all parts, Good and Defect.
    = ((Net Operating Time) – (All Quality Loss)) / (Net Operating Time)
    = (Fully Productive Time) / (Net Operating Time)

Note: We use the term OEE Time interchangeably with Fully Productive Time.

Multiplying these three KPIs together, by cancelling above and below the line, results in the following fraction;

 Availability x Performance x Quality = (Fully Productive Time) / (Planned Operating Time)

Which we already stated at the top of this post is OEE.

So these three KPIs when multiplied together produce the OEE value. We have seen at the top of this post how to calculate OEE from the Good Parts count and the Planned Operating Time. Now we see that we can also calculate OEE if we know the Availability Losses, Performance Losses and Quality Losses.

In our next post we will describe how to calculate OEE from these losses.
 

OEE and Lean Manufacturing