Provideam Blog

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.
 

The current economic crisis has hit manufacturing industry extremely hard. Even companies which were performing well six months ago, now face an uncertain future. The global downturn has heightened the pressure on every one of us to reduce costs and increase productivity.

Most manufacturers are facing into a period where there is a reduction in demand and a knock on tightening of margins. The key to beating the recession is to eliminate unnecessary costs as soon as possible and to tune our production equipment so that we are up and running before our competitors when the inevitable economic up-turn arrives.

In the commercial world decisions regarding investment in manufacturing assets are made on the basis of productivity (i.e. how well are the asset under our disposal being employed).In manufacturing our productivity is closely related to how well, or effectively, we operate our production equipment. The pre-eminent benchmark used to measure this is OEE or Overall Equipment Effectivity (Effectiveness).

A company operating at 100% OEE would have 0 Defects, 0 Breakdowns and no Speed Losses. 100% OEE is practically impossible to achieve and even World Class Manufacturing Companies would struggle to exceed 85% OEE.

The point is not what our ultimate OEE Target might be but that we continuously strive to improve our current OEE levels.

There are two fundamentals required to improve our equipment effectivity,

1) accurate, up-to-date, impartial data on production performance and

2) trained staff with the capability to interpret and act on the data. Companies that possess this combination of data and trained staff are empowered to identify losses and to engineer out the causes of these losses.

PROVIDEAM KEY BENEFITS

There are many reasons why Provideam is the ideal choice for companies wishing to take on the challenge of reducing costs by tackling losses and ‘continuously improving’ the effectivity of production equipment.

Minimal Cost of Entry: Provideam is scaleable from 1 to 100’s of machines. For a minimal investment it can be hooked up to one machine – most machines can be integrated within a day. Once we see the benefits on a pilot machine you can roll the system out to other machines at will – thus eliminating the risk of purchasing a white-elephant.

Easy Configurability: Once data begins to flow, staff begin to understand how to interpret the data. This leads to suggestions from staff as to how to improve the data quality. The Provideam configuration is very straight forward to understand and modify to each company’s requirements. Thus staff can adapt the Provideam configuration, over time, to improve their ability to analyse the data. This configurability helps to foster a sense of ownership of the data and is an enabler of the Continuous Improvement management style.

Motivational: Real-time metrics displayed on a Live Display is an excellent motivational tool. The act of collecting and displaying these metrics identifies them as being important and acts to motivate staff to exceed targets for these metrics.
 

 
Provideam Live – Typical Motivation Screen
 

Easy Access to Operational Metrics: Provideam provides easy access to operational performance metrics through a range of views and reports. However, we’ve made it even simpler.

The majority of Provideam Users rarely logon to the application – they simply rely on scheduled emailed reports. These reports typically form the basis of a daily production meeting. Schedule Shift reports are emailed within minutes of the Shift ending. All staff are presented with the same data. The data is impartial and this facilitates an open discussion on the real reasons behind losses rather then an argument as to the validity of the data.

Trend Analysis: Several years of historical data can be stored in the Provideam database and this enables us to extract trends showing how performance has improved/disimproved over the period. It can also allow a ‘before and after’ analysis to highlight the effect of changes in the process, materials etc.

Parameter Comparison: Process Engineers use Provideam to highlight the operational performance variances between periods (e.g. Day Shift and Night Shift) or between Objects (e.g. Part A and Part B or Machine A and Machine B). This is an extremely useful way of assessing the worst and best performing machines and processes.

Innovation Support: By allowing us to identify and quantify the real causes of loss, Provideam gives us the tools to establish the business case for upgrading badly engineered equipment. For example Provideam can provide an accurate picture of time lost during change-overs which could be used to build a case for process improvements as with for example the introduction of SMED (Single Minute Exchange of Dies).

Increased Profits: Provideam gives us the tools to reduce costs and to operate equipment more effectively both in the short term and on in to the future.
 

CONCLUSION

In conclusion some points to remember;

1. The downturn won’t last forever.
2. Tackle costs immediately to survive reduced product demand and tightened margins.
3. Fine tune processes now to ensure that we are ready to take advantage of the inevitable upswing before our competitors.