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This document provides an overview of Overall Equipment Effectiveness (OEE). OEE is a metric used to measure manufacturing system performance by calculating availability, performance, and quality rates. It identifies the gap between actual and maximum potential output. The document discusses the "six big losses" that reduce OEE - breakdowns, setups, minor stoppages, speed losses, defects, and start-up waste. Tracking OEE can help companies increase productivity 10-50% and profits 20-300% by prioritizing issues and driving continuous improvement.

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John R. Rattray Memex Automation Inc. jrattray@memex.ca (905) 635-0590 Mobile: (416) 460-7637
OEE OVERVIEW 2
OEE OVERVIEW $$$$ $ What if you had a „Tool‟ that could help increase manufacturing efficiency 10 - 50% Profitability would increase 20 – 300% 3
OEE OVERVIEW OEE Defined Overall Equipment Effectiveness (OEE) is a quantitative way of measuring how well a standalone or a flow-line production system operates in making good product relative to what the system could make if it operated perfectly, 100% of the scheduled time based on specific products and processes. OEE is a Key Benchmarking metric used to define the Throughput Gap between Current State and „World Class‟ for your system. “World Class” is considered to be 85%. Good companies run in the 95+% range. Many manufacturers run in the 30-60% range. 4
OEE OVERVIEW Initial Foundation “OVERALL EQUIPMENT EFFECTIVENESS: A Powerful Production/Maintenance Tool for Increased Profits” Robert C. Hansen, PE., CMRP Industrial Press, New York, NY 2001 Owner: RC Hansen Consulting, LLCProfits by over 90 % of my Clients have increased $1 Million Dollars in the first year post 970-490-1720 cell: 970-481-3145 engagement. 5
OEE OVERVIEW Initial Foundation Correctly identifying improvement targets often leverages “Hidden Factory” Financial Benefit Opportunities of > 10 : 1 over the next alternative. “What IF?” a Work Center improved OEE by 3 points (approx. a 5% ↑ in OEE) and we sold everything? WC A ↑ IFO by $625,000 WC B ↑ IFO by $48,000 6
OEE OVERVIEW Initial Foundation Providing everyone in the organization the range of OEE improvement tools is valuable. Identifying exactly where and when to focus your Key people (and avoid activity traps): Priceless!!! 7
OEE OVERVIEW Initial Foundation All methodologies require data to support decision making Lean 6S, OEE, TEEP, TPM, Takt Time, TQM, Kaizen, Continuous Improvement Collect actual automated machine data to prove the case       8
OEE OVERVIEW Initial Foundation The OEE Industry Standard gives a guideline in order to find ALL potential losses in effectiveness. An average machine in an average factory runs about 35 to 45% OEE. So it is losing 55 to 65% capacity! While - not running - running at reduced speed - or producing parts out of spec. How come then, that the average reported numbers are way over 80%? www.oeefoundation.org It is a matter of definition, What you are not looking for you will not find. To really reveal the hidden machines in your factory, ALL Losses need to be defined and visualized 9
OEE OVERVIEW Productivity Increases of 1050% Reduce Unplanned Downtime Reduce Setup and Changeover Times Better Management of Resource Allocation, Planning and Scheduling Operator Productivity Increases Efficiency with Automated Data Collection Better Root Cause Analysis Improve Quality, Minimize Rejects Identify Bottlenecks and Constraints Improve On-Time Delivery Manage Operations Pre-emptively & Proactively Measurably Improve Profitability 10
OEE OVERVIEW  OEE is integral to Successful LEAN manufacturing  Used adroitly, Strategic OEE means Millions of $$ of Profits  „Financial OEE‟ becomes a Navigational tool for Success  OEE = Quality, Reliability and Manufacturing Best Practices  World Class OEE = “Least Price Provider” of products 11
OEE OVERVIEW Why use OEE? OEE  Constantly improving their „Best Ever‟ performance OEE TPM is integrated to successful LEAN Manufacturing OEE Characteristics of Top Quartile Manufacturing Organizations OEE is the visual metric of Total Productive Manufacturing  Synergizing every player‟s contribution  Effectively Communicating new ideas or conditions 12
OEE OVERVIEW Why is OEE so important?  If you were told that your department was running flat out you might reasonably assume that the equipment was running efficiently and effectively.  What if the equipment only ran for 65% of the time?  What if when it ran it ran at 80% of its speed ?  What if only 90% of the parts it made are good?  Individually these performance measures seem to indicate an OK piece of equipment, but is it a true picture?  What is having an impact on these performance figures? 13
Root Cause Analysis OEE OVERVIEW How deep are you Problems The causal or willing or able to dig? contributing factors Are defined in terms of their... that, if corrected, would prevent Effects recurrence of the identified problem. But this is only what we see on the surface our habits and work procedures The “true” reason that contributed to the creation of a problem, defect or nonconformance. Causes What is happening under the surface? what is causing our habits and work procedures Root Cause A root cause is a blind spot beyond our reach they are hidden deep down, they feed into or create many of the causes that we see under the surface 14
OEE OVERVIEW What is the Business Case? OEE and the effect to the Bottom Line Business Case Revenue: Current state OEE: 60% Income from Operations (IFO): $ 10,000,000.00 $ 1,000,000.00 (estimated) (assumed) (assumed) A 10% improvement in OEE (capacity utilization) will increase IFO 22% (Bob Hansen, Overall Equipment Effectiveness, pp 47 – 66). A 22% improvement to an IFO of $ 1,000,000.00 is $ 220,000.00 Monthly that equates to $ 18,333.33 left "on the table" The assumed figures may be quite conservative, however they do prove a point. The ROI for our solution is three to six months depending on the number of machines monitored. After the ROI period there is at least $ 18,333.33 every month added to the bottom line. Without implementing a solution such as MERLIN, you are losing $ 220,000.00 in additional IFO every year. 15
How do we use OEE? OEE OVERVIEW  OEE is only a measure, its benefits will be lost if the shortfalls it identifies are not acted upon.  OEE is a total measure of performance but the data used to produce it must be used to prioritise improvement tasks.  The purpose of measurement is to identify losses, remove waste and drive improvement.  OEE should be used to support the Total Productive Maintenance (TPM) approach and the tools it supplies. 16
OEE OVERVIEW How do we use OEE? Keith Mobley, UPTIME Magazine  “Too many corporations are run based on the instincts of its executives rather than on data that define a true picture of the market and operating performance of the plant.”  “One absolute that I have learned is that sustainable change must be lead from the top of the organization. ……….. Simply stated, change must be led from the top and implemented from the bottom.”  “The first hurdle that must be overcome is simply convincing the workforce that there is a need for change. ……… „profit hides inefficiency and ineffectiveness‟”  “No one in a profitable company, even when profits are marginal, ever asks how much profit we are leaving on the table?” 17
What are the benefits of OEE? OEE OVERVIEW FOCUS  Highlight priorities for change. SIMPLICITY  Even complex processes can be measured. FEEDBACK  Before and after change. BENCHMARKING  Objective comparisons. TARGET SETTING  Setting achievable goals. 18
OEE OVERVIEW How do I measure OEE? OEE = AVAILABILITY x PERFORMANCE x QUALITY 19
OEE OVERVIEW How do I measure OEE? OEE % = Availability x Performance x Quality Shows group or plant output as a percentage of maximum capacity World Class = 85% (= 95% x 95% x 95%) It is not uncommon to > 90%! Availability % Percentage of scheduled time that the operation is actually operating. Availability % = Run Time / Scheduled Time Performance % Speed at which the Work Center runs as a percentage of its designed speed or ideal cycle time or most often considered the “Standard”. Performance % = (Parts Made x Standard) / Run Time Quality % 20
OEE OVERVIEW How do I measure OEE? REQUIRED: GOOD SHOP FLOOR DATA FOR QUALITY ANALYSIS Data Calculations  Availability = C/B  OEE = D/B  Utilization = C/A  TEEP= D/A 21
OEE OVERVIEW OEE is a Key Performance Indicator (KPI) that can measure the impact of change on a process caused by eliminating process, or equipment losses OEE is used to measure the performance of equipment and the process - not the operator. 22
OEE OVERVIEW Organizations that train and strategically use the OEE Tools and methods presented in the modules have a clear roadmap to quickly achieve “Top Quartile” competitive advantage in their line of business. „Top Quartile‟ Winning Teams have common best practices;  Detailed Measurement of their performance  Constantly improving their „Best Ever‟ performance  Synergizing every player‟s contribution  Effectively Communicating new ideas or conditions  Being the Provider of Choice re: Price and Delivery 23
OEE OVERVIEW Make visible specific machine status for everyone 24
OEE OVERVIEW T&T Oct. YTD Vol and Maint. Labor $ Proj. Vol Sept-Oct TSNS Maint. Labor YTD Oct 16 15 14 13 12 11 10 9 8 7 6 5 4 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 3 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2 Total YTD Vol Vol YTD Oct WC Number 25
Pareto Analysis OEE OVERVIEW What Is It? Pareto Analysis is a data graphing analysis based on the Pareto principle which focuses on identifying the 20% of sources that result in 80% of the problems Who Should Use It?  This analysis can be conducted by anyone on the team When Do I Use It?  A Pareto Analysis can be applied to projects of all sizes where quantifiable data exists on the process. It is often one of the first means of testing a hypothesis  It is particularly useful for large scale projects where analysis must be focused on those areas most likely to be causing problems  A Pareto analysis should be used in the Measure and/or Analyze phases How Do I Use It?  Data should be gathered regarding the problem to be solved and the various factors that may be affecting it  This data can the be placed in Microsoft Excel, sorted, and placed into a histogram for easy analysis and viewing 26
OEE OVERVIEW 27
OEE OVERVIEW OEE and the Six Big Losses Equipme nt Total Available time Six Big Losses Planned Downtime Breakdowns 1 Available time 2 Setup / adjustment Available operating time 3 Actual operating time Effective operating time Idling / minor stoppages 4 5 Speed Defects in process and rework 6 Start up losses 28
OEE OVERVIEW Availability “The percentage of time equipment is actually running when we need it” AVAILABILITY= AVAILABLE TIME – UNPLANNED DOWNTIME x 100% AVAILABLE TIME Where:Available Time = Total Available Time – Planned Downtime* *Note :- Planned Downtime could be PM, no scheduled work, breaks, etc. 1 Breakdowns Available time 2 Setup / adjustment Available operating time 29
Planned vs. Unplanned Downtime Planned OEE OVERVIEW     Excess capacity. Planned breaks. Planned Maintenance. Communications briefs / team meetings. Unplanned (Losses)     Breakdowns. Set Ups and Adjustments. Late deliveries (material). Operator availability. Note : Planned time such as breaks, meetings and maintenance can be considered as losses (useful for encouraging ideas on how to minimise their disruption) as long as a consistent approach is taken. 30
Productivity OEE OVERVIEW “The difference between the potential output and actual output, when the equipment was available” PRODUCTIVITY = IDEAL CYCLE TIME x ACTUAL OUTPUT* x 100% AVAILABLE OPERATING TIME *Note :- Actual Output is the Quantity of good & bad parts Available operating time Actual operating time 3 Idling / minor stoppages 4 Speed 31
Operating Speed vs. Productivity OEE OVERVIEW Operating Speed Rate  The % of actual cycle time against ideal cycle time. Productivity  The Operating Speed Rate factored with interruptions to constant processing, i.e. idling and minor stoppages. 32
Quality OEE OVERVIEW “The total good parts produced expressed as a % of the total parts produced” QUALITY= Actual operating time Effective operating time PARTS MADE – DEFECT QUANTITY x 100% PARTS MADE 5 6 Defects in process and rework Start up losses 33
Processed vs. Defect Quantity OEE OVERVIEW Parts Made  The total quantity of parts produced in the available time Defect Quantity  The quantity of parts that did not meet the required standard (including rework) in the available time 34
OEE and the Six Big Losses OEE OVERVIEW Equipme nt Six Big Losses 1 Available time Breakdowns 2 Available operating time 3 Actual operating time Effective operating time Idling / minor stoppages 4 5 Setup / adjustment Speed Defects in process and rework 6 Start up losses 35
Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost due to key equipment breaking down or deterioration which causes the production to be stopped for more than 10 min. Start up losses 36
Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 2 Breakdowns Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through “product change over and adjustment ” to the point where the production of the new product is completely satisfactory. Start up losses 37
Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through key equipment being stopped for less than 10 min. Start up losses Time lost during the standard cycle when the equipment is not adding value. 38
Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through key equipment not producing parts at its optimum rate. Start up losses 39
Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 The time lost through key equipment not producing parts that meet the specified quality standard. Speed 5 Defects in process and rework 6 The time lost through key equipment being utilised to rework sub-standard parts. Start up losses 40
Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through key equipment not producing parts to the specified quality standard, following start up and before the equipment achieves controllable production conditions. Start up losses 41
Quality Check OEE OVERVIEW Relief Req’d IFO Tooling Help Engineering 42
“Support the Internal Customer” Tools required OEE OVERVIEW 43
“Support the Internal Customer” Tools required OEE OVERVIEW 44
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics OEE BASICS 45
OEE Overview OEE OVERVIEW OEE combines manufacturing aspects of:  Availability – Actual uptime vs. scheduled time  Performance – Speed factor, actual rate vs. ideal rate  Quality – Good units vs. total units OEE = Availability × Performance × Quality TEEP = Utilization × Performance × Quality OEE and TEEP directly correlate to the amount of good product produced (transferred) versus total possible product. 46
OEE Overview OEE OVERVIEW OEE (Overall Equipment Effectiveness) is the measure of the amount of good product produced compared to the amount of product that could have been produced if the manufacturing system operated perfectly for its entire scheduled time. Total Effective Equipment Performance (TEEP) is the measure of the amount of good product produced compared to the amount of product that could have been produced if the manufacturing system operated perfectly for the total time (calendar time) over the time period under consideration. 47
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools OEE BASICS TOOLS 48
OEE Overview OEE OVERVIEW TPM (OEE) Toyota Prod. System Breakdowns Setup & Adjustment Idling and minor Stoppage Reduced Speed Quality Defects Reduced Yield From Startup Implementing Flow Process Eliminating Defects Stockless Production Reduced Lot Size Quick Setup Standard Cycle Times Standard Production Sequence Standard Idle Time Visual Control and on Line Stop Alarm Improved Machine Operability Improved Maintainability 49
How to collect data for OEE OEE OVERVIEW Key Points: 50
How to collect data for OEE OEE OVERVIEW Example: Three Hourly Data Sheet 51
How to collect data for OEE OEE OVERVIEW AVAILABILITY A B C=A-B Gross Time (in minutes) Planned Down Time (in minutes) Net Available Time (in minutes) Non planned stoppages (in minutes) Operating Time (in minutes) D E=C-D F = E/C (mins/ unit) G H I= (HxG)/E AVAILABILITY PRODUCTIVITY Output Standard Cycle time PRODUCTIVITY QUALITY Defect Quantity QUALITY J K = (G-J)/G 52
Connected Manufacturing OEE OVERVIEW “Following the computer and the Internet, every machine tool will become a node on the network creating greater efficiency.” Connected Manufacturing Model Internet networked personal computing cooperative computing universal computer connectivity distributed computing batch computing time sharing Universal Machine Connectivity open systems & client servers micros / PC’s The technology is here today, the tools are readily available and cost effective minis mainframes 1960 1970 53 1980 1990 2000 2010 53
Automated Data Collection OEE OVERVIEW 54
ISA-95 Standards Profit Level 4 Level 3 Level 2 Level 1 MS Dynamics AX Mfg. Execution System Dist. Control System Connection Hardware Abstraction Layer Ax9150 UMI Machine Level 0 From AX: production plan, work orders To AX: production performance results 55
OEE OVERVIEW ADC + OEE = Profits COLLATERAL BENEFITS OF MES Statistical evaluation of variability (Goal Setting) Best Ever Performance by Product/Process/Team Modeling and Analysis of the “Hidden Factory” Maintenance and Quality information Timeline charting of key events Learning Curve Information /ADC = Automatic Data Collection Setting Planning Values MES = Manufacturing Execution System 56
How to eliminate Losses? OEE OVERVIEW 57
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE OEE BASICS FINANCIAL OEE TOOLS 58
OEE Overview OEE OVERVIEW 59
OEE Overview OEE OVERVIEW Financial OEE 60
OEE OVERVIEW OEE Overview The Power of Financial OEE to expose the “Hidden Factory” Practice Example Factory Scenario: Current State Annual Volume = 223,650 units IFO was $4,592,000.  „Financial OEE‟ Analysis: All Workstations at 85% OEE, and 99.8% Quality Factor  Volume increased by 33,787 units a 15 % increase  IFO increased by $4,544,000 a 99 % increase 61
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE BASICS FINANCIAL OEE TOOLS ANALYSIS 62
OEE Overview OEE OVERVIEW OEE Data Analysis Determine Variability, Capability Develop „SMART‟ Goals Analysis of Target Alternatives 63
OEE Overview OEE OVERVIEW OEE Data Analysis 1. OEE: The Seen and Unseen 2. Real-time Performance Measurements - databases 3. Exposing Variability; Determining Capability 4. Developing OEE Performance Curves 5. Setting „SMART‟ Goals for Improvement 6. Data Analysis for Target Selection 7. Consensus Building using Cross-functional Teams 8. Combining Subjective-Objective data into a Decision Table 64
OEE Overview OEE OVERVIEW Learning to „see‟ OEE  As a Strategic Tool and a Monitoring Tool  As a Reliability metric and a Business metric  As a leading metric and a lagging metric  Using OEE as a „fair‟ benchmarking metric  Quantify the value of each OEE factor 65
Lean Thinking OEE OVERVIEW Lean Thinking Management System Model Management System Model reflects graphically, the The Lean integration of Hoshin Kanri (Strategic Deployment), Deming’s PDCA Wheel (plan–do–check–act) four-step model for carrying out change with the Toyota Way 2001 principles (Continuous Improvement and Respect for people), and how the lean management system is driven by customer requirements and level of satisfaction. The Lean Thinking Management System is used to implement the 5 Elements of Lean Thinking. 66
The Deming Cycle OEE OVERVIEW ...Data based problem solving Typical PDCA: Plan quickly High Velocity Organization PDCA: Plan deeply • Discuss actual situation and target with • Address Symptoms everyone affected Do immediately • Really understand/model the problem and its root cause • Jump to conclusions Check roughly Act pretty much the way you did before Do many quick experiments • Validate your thinking Check implications carefully Act systematically • Update and deploy standards and checklist disciplines 67
Lean Six Sigma OEE OVERVIEW Balance and Complexity and Increase Lean and Six Sigma are natural allies in pursuit of Reliability • Simplicity (Lean) business performance improvement • Simple, low reliability Complex, low reliability Lean reduces process and business complexity Simple, high reliability Complex, high reliability • Six Sigma increases process reliability and enterprise effectiveness • Lean and Six Sigma amplify each other and accelerate strategic benefits • Reliability (Six Sigma) Together, Lean and Six Sigma offer a significantly higher probability of success 68
Current Condition OEE OVERVIEW …Ask what we already know Specific, detailed, quantitative, concise  Tables, graphs, histograms, value-stream maps, diagrams  Highlight exactly where problem occurs  Baseline to compare to metrics after countermeasures are applied Engage everyone affected by or causing symptoms Build Consensus on what is  Symptoms / Undesirable Effects everyone can see  Foundation of authority to experiment with countermeasures Update as understanding improves 69
Goal – Next Target Condition OEE OVERVIEW …Model what we expect What baseline change is wanted?  What does perfect look like?  What does the organization need?  Realistically attainable target condition? Mentor ensures that the owner has both Plausible Hypothesis  Based on best available model/understanding of how the system works/could work Consensus among stakeholders  Target is attainable and desirable. Update as root cause and countermeasures developed 70
Root Cause OEE OVERVIEW …Model Cause & Effect Identify underlying problem(s) causing symptoms  Root cause is typically faulty thinking or assumptions Addressing the root cause(s) improves all levels of symptoms/undesirable effects/visible damage. Build consensus among stakeholders  Broad agreement on Cause & Effect network  Reflect best current knowledge about how things work Some techniques: (explained of following slides)  Fishbone Diagram  5 Whys  Histograms  Pareto Analysis  Root Cause Analysis 71
Root Cause Analysis OEE OVERVIEW What Is It? A tool used to identify contain and analyze a problem, defining the root cause, defining and implementing actions to minimize or eliminate the root cause and verification that corrective action prevented recurrence of then problem. When Do I Use It? How Do I Use It? When a problem is not easy to Involve a team to define without considerable collect and analyze analysis data using other problem solving tools While a root cause analysis can such as Pareto, 5 whys be used in any phase of a , brainstorming etc. continuous improvement project, it is most commonly deployed in the Define and Improve phases Who Should Use It? A root cause analysis can be completed by anyone on the project team It is recommended that project leaders be involved in its creation to ensure coordination of the analysis 72
Root Cause Analysis OEE OVERVIEW How deep are you Problems The causal or willing or able to dig? contributing factors Are defined in terms of their... that, if corrected, would prevent Effects recurrence of the identified problem. But this is only what we see on the surface our habits and work procedures The “true” reason that contributed to the creation of a problem, defect or nonconformance. Causes What is happening under the surface? what is causing our habits and work procedures Root Cause A root cause is a blind spot beyond our reach they are hidden deep down, they feed into or create many of the causes that we see under the surface 73
Root Cause Analysis OEE OVERVIEW Implement and Assess Gather Data Define Problem It is not a straight forward journey. You may end up in a dead end. It requires patience and persistence. Create a Solution Get to the Root Cause There are tools you can use to stay on track and ensure you arrive at a right destination. 74
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE 5. OEE for Leadership BASICS FINANCIAL OEE TOOLS ANALYSIS VISION 75
OEE Overview OEE OVERVIEW OEE for Leadership Where? When? What? Why? 76
OEE Overview OEE OVERVIEW OEE for Leadership Where? When? What? Why? 77
OEE Overview OEE OVERVIEW OEE for Leadership 78
OEE Overview OEE OVERVIEW OEE for Leadership OEE Value Stream Analysis as a Strategic Tool Where? When? What? Why? 79
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE 5. OEE for Leadership 6. OEE Value Stream Mapping BASICS FINANCIAL OEE TOOLS ANALYSIS VISION 80
OEE Overview OEE OVERVIEW OEE Value Stream Mapping 81
OEE Overview OEE OVERVIEW OEE Value Stream Mapping Maximizing IFO though strategic analysis Strategically Focused Targets, Aligned and Engaged from top to bottom, Solves the Success Riddle 82
Value Stream OEE OVERVIEW The entire set of activities across all parts of your organization involved in delivering your product or service. • • • “CUSTOMER” 83
OEE Overview OEE OVERVIEW OEE Value Stream Mapping Drill And Buff Rough Cut & Shape Sand and Paint Drill and Buff Assemble & Palletize Product A Product B Product C 84
OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE 5. OEE for Leadership 6. OEE Value Stream Mapping 7. OEE Value Stream Analysis BASICS FINANCIAL OEE TOOLS NEW TOOLS ANALYSIS VISION SHIFT GOALS BUSINESS GOALS $$$$ $$$$$$ 85
OEE Overview OEE OVERVIEW OEE Value Stream Mapping 86
OEE Overview OEE OVERVIEW OEE Value Stream Mapping Product A Product B Product C Product D 87
OEE Overview OEE OVERVIEW IFO BENEFITS TABLE WC’S A +3 Pts, Same Vol. Vol. = 223,650 +3 Pts, and Refill the Factory Vol. = 233,615 (+9,965 units) #’S IN 1,000’S B BASE CASE IFO = $4,592 C D E $42 $48 $12 $13 $28 $625 $48 $12 $13 $28 Improving WC A has the possibility of 13 times more value than any other WC for the condition of +3 OEE Pts. higher Availability/Reliability From 68.0 % to 71.0 % 88
OEE Training OEE OVERVIEW Understanding the Power of OEE  14 Modules will cover the 7 study areas  Each Module will bring game changing tools for application  In total, the Best Business Strategy is revealed 89
OEE Training OEE OVERVIEW OEE-College.com Training Modules The Overview module demonstrates the Delivery Format Each Area of Study is contained in an individual CD Each module on the CD is a narrated PPT Presentation Modules are provided both With and Without the „Refocus Game‟ Modules are ≈40 min. leaving 10-15 min. for group discussion The „Practice Factory‟ Base Case excel workbook example templates and 14 “What IF?” investigations are provided on the final CD. The workbooks can be adapted to model your specific Product Flow lines and generate your „Financial OEE‟ 90
OEE Training OEE OVERVIEW OEE-College.com Training Modules Recommended use of the training modules would be: Designate Productivity Improvement Leaders for High Value Line of Business (LOB) flow lines on your plant site. These individuals should become familiar with the Practice Factory example workbooks and be able to generate new Base Case workbooks and Benefits Tables specific to their LOB flow line. All of the Plant Leadership should review all of the modules to gain knowledge and understanding of the critical steps for Financial OEE so everyone is one the same page. Shop floor people should review at least the first 5 areas of study and practice applying all of the „Tools‟ at their workstations. 91
OEE Training OEE OVERVIEW OEE-College.com Training Modules The OEE-College.com set of Training Modules cover 7 key areas of Study that span from OEE Basics to Financial OEE. Financial OEE is a New Tool for Plant Leadership Teams to expose exactly where to apply resources for the highest Return On Investment (ROI) relative to a stipulated Product Mix. Financial OEE Overview By Robert C. Hansen, PE., CMRP, Author Owner RC Hansen Consulting, LLC 970-490-1720 cell 970-481-3145 Robert.Hansen@OEE-College.com 92
OEE OVERVIEW $$$$ $ Increase manufacturing efficiency 10 - 50% Critical metric of TPM World Class Best Practices Visibility Culture of Productivity Competitive Edge Profitability increase 20 – 300% 93
OEE OVERVIEW 94
Introduction to OEE The Power of OEE Generate more Profits $$$$ $ OEE OVERVIEW Memex Automation Inc. 905-635-0590 cell 416-460-7637 JRattray@memex.ca 95

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6 OEE overview

  • 1. John R. Rattray Memex Automation Inc. jrattray@memex.ca (905) 635-0590 Mobile: (416) 460-7637
  • 3. OEE OVERVIEW $$$$ $ What if you had a „Tool‟ that could help increase manufacturing efficiency 10 - 50% Profitability would increase 20 – 300% 3
  • 4. OEE OVERVIEW OEE Defined Overall Equipment Effectiveness (OEE) is a quantitative way of measuring how well a standalone or a flow-line production system operates in making good product relative to what the system could make if it operated perfectly, 100% of the scheduled time based on specific products and processes. OEE is a Key Benchmarking metric used to define the Throughput Gap between Current State and „World Class‟ for your system. “World Class” is considered to be 85%. Good companies run in the 95+% range. Many manufacturers run in the 30-60% range. 4
  • 5. OEE OVERVIEW Initial Foundation “OVERALL EQUIPMENT EFFECTIVENESS: A Powerful Production/Maintenance Tool for Increased Profits” Robert C. Hansen, PE., CMRP Industrial Press, New York, NY 2001 Owner: RC Hansen Consulting, LLCProfits by over 90 % of my Clients have increased $1 Million Dollars in the first year post 970-490-1720 cell: 970-481-3145 engagement. 5
  • 6. OEE OVERVIEW Initial Foundation Correctly identifying improvement targets often leverages “Hidden Factory” Financial Benefit Opportunities of > 10 : 1 over the next alternative. “What IF?” a Work Center improved OEE by 3 points (approx. a 5% ↑ in OEE) and we sold everything? WC A ↑ IFO by $625,000 WC B ↑ IFO by $48,000 6
  • 7. OEE OVERVIEW Initial Foundation Providing everyone in the organization the range of OEE improvement tools is valuable. Identifying exactly where and when to focus your Key people (and avoid activity traps): Priceless!!! 7
  • 8. OEE OVERVIEW Initial Foundation All methodologies require data to support decision making Lean 6S, OEE, TEEP, TPM, Takt Time, TQM, Kaizen, Continuous Improvement Collect actual automated machine data to prove the case       8
  • 9. OEE OVERVIEW Initial Foundation The OEE Industry Standard gives a guideline in order to find ALL potential losses in effectiveness. An average machine in an average factory runs about 35 to 45% OEE. So it is losing 55 to 65% capacity! While - not running - running at reduced speed - or producing parts out of spec. How come then, that the average reported numbers are way over 80%? www.oeefoundation.org It is a matter of definition, What you are not looking for you will not find. To really reveal the hidden machines in your factory, ALL Losses need to be defined and visualized 9
  • 10. OEE OVERVIEW Productivity Increases of 1050% Reduce Unplanned Downtime Reduce Setup and Changeover Times Better Management of Resource Allocation, Planning and Scheduling Operator Productivity Increases Efficiency with Automated Data Collection Better Root Cause Analysis Improve Quality, Minimize Rejects Identify Bottlenecks and Constraints Improve On-Time Delivery Manage Operations Pre-emptively & Proactively Measurably Improve Profitability 10
  • 11. OEE OVERVIEW  OEE is integral to Successful LEAN manufacturing  Used adroitly, Strategic OEE means Millions of $$ of Profits  „Financial OEE‟ becomes a Navigational tool for Success  OEE = Quality, Reliability and Manufacturing Best Practices  World Class OEE = “Least Price Provider” of products 11
  • 12. OEE OVERVIEW Why use OEE? OEE  Constantly improving their „Best Ever‟ performance OEE TPM is integrated to successful LEAN Manufacturing OEE Characteristics of Top Quartile Manufacturing Organizations OEE is the visual metric of Total Productive Manufacturing  Synergizing every player‟s contribution  Effectively Communicating new ideas or conditions 12
  • 13. OEE OVERVIEW Why is OEE so important?  If you were told that your department was running flat out you might reasonably assume that the equipment was running efficiently and effectively.  What if the equipment only ran for 65% of the time?  What if when it ran it ran at 80% of its speed ?  What if only 90% of the parts it made are good?  Individually these performance measures seem to indicate an OK piece of equipment, but is it a true picture?  What is having an impact on these performance figures? 13
  • 14. Root Cause Analysis OEE OVERVIEW How deep are you Problems The causal or willing or able to dig? contributing factors Are defined in terms of their... that, if corrected, would prevent Effects recurrence of the identified problem. But this is only what we see on the surface our habits and work procedures The “true” reason that contributed to the creation of a problem, defect or nonconformance. Causes What is happening under the surface? what is causing our habits and work procedures Root Cause A root cause is a blind spot beyond our reach they are hidden deep down, they feed into or create many of the causes that we see under the surface 14
  • 15. OEE OVERVIEW What is the Business Case? OEE and the effect to the Bottom Line Business Case Revenue: Current state OEE: 60% Income from Operations (IFO): $ 10,000,000.00 $ 1,000,000.00 (estimated) (assumed) (assumed) A 10% improvement in OEE (capacity utilization) will increase IFO 22% (Bob Hansen, Overall Equipment Effectiveness, pp 47 – 66). A 22% improvement to an IFO of $ 1,000,000.00 is $ 220,000.00 Monthly that equates to $ 18,333.33 left "on the table" The assumed figures may be quite conservative, however they do prove a point. The ROI for our solution is three to six months depending on the number of machines monitored. After the ROI period there is at least $ 18,333.33 every month added to the bottom line. Without implementing a solution such as MERLIN, you are losing $ 220,000.00 in additional IFO every year. 15
  • 16. How do we use OEE? OEE OVERVIEW  OEE is only a measure, its benefits will be lost if the shortfalls it identifies are not acted upon.  OEE is a total measure of performance but the data used to produce it must be used to prioritise improvement tasks.  The purpose of measurement is to identify losses, remove waste and drive improvement.  OEE should be used to support the Total Productive Maintenance (TPM) approach and the tools it supplies. 16
  • 17. OEE OVERVIEW How do we use OEE? Keith Mobley, UPTIME Magazine  “Too many corporations are run based on the instincts of its executives rather than on data that define a true picture of the market and operating performance of the plant.”  “One absolute that I have learned is that sustainable change must be lead from the top of the organization. ……….. Simply stated, change must be led from the top and implemented from the bottom.”  “The first hurdle that must be overcome is simply convincing the workforce that there is a need for change. ……… „profit hides inefficiency and ineffectiveness‟”  “No one in a profitable company, even when profits are marginal, ever asks how much profit we are leaving on the table?” 17
  • 18. What are the benefits of OEE? OEE OVERVIEW FOCUS  Highlight priorities for change. SIMPLICITY  Even complex processes can be measured. FEEDBACK  Before and after change. BENCHMARKING  Objective comparisons. TARGET SETTING  Setting achievable goals. 18
  • 19. OEE OVERVIEW How do I measure OEE? OEE = AVAILABILITY x PERFORMANCE x QUALITY 19
  • 20. OEE OVERVIEW How do I measure OEE? OEE % = Availability x Performance x Quality Shows group or plant output as a percentage of maximum capacity World Class = 85% (= 95% x 95% x 95%) It is not uncommon to > 90%! Availability % Percentage of scheduled time that the operation is actually operating. Availability % = Run Time / Scheduled Time Performance % Speed at which the Work Center runs as a percentage of its designed speed or ideal cycle time or most often considered the “Standard”. Performance % = (Parts Made x Standard) / Run Time Quality % 20
  • 21. OEE OVERVIEW How do I measure OEE? REQUIRED: GOOD SHOP FLOOR DATA FOR QUALITY ANALYSIS Data Calculations  Availability = C/B  OEE = D/B  Utilization = C/A  TEEP= D/A 21
  • 22. OEE OVERVIEW OEE is a Key Performance Indicator (KPI) that can measure the impact of change on a process caused by eliminating process, or equipment losses OEE is used to measure the performance of equipment and the process - not the operator. 22
  • 23. OEE OVERVIEW Organizations that train and strategically use the OEE Tools and methods presented in the modules have a clear roadmap to quickly achieve “Top Quartile” competitive advantage in their line of business. „Top Quartile‟ Winning Teams have common best practices;  Detailed Measurement of their performance  Constantly improving their „Best Ever‟ performance  Synergizing every player‟s contribution  Effectively Communicating new ideas or conditions  Being the Provider of Choice re: Price and Delivery 23
  • 24. OEE OVERVIEW Make visible specific machine status for everyone 24
  • 25. OEE OVERVIEW T&T Oct. YTD Vol and Maint. Labor $ Proj. Vol Sept-Oct TSNS Maint. Labor YTD Oct 16 15 14 13 12 11 10 9 8 7 6 5 4 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 3 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2 Total YTD Vol Vol YTD Oct WC Number 25
  • 26. Pareto Analysis OEE OVERVIEW What Is It? Pareto Analysis is a data graphing analysis based on the Pareto principle which focuses on identifying the 20% of sources that result in 80% of the problems Who Should Use It?  This analysis can be conducted by anyone on the team When Do I Use It?  A Pareto Analysis can be applied to projects of all sizes where quantifiable data exists on the process. It is often one of the first means of testing a hypothesis  It is particularly useful for large scale projects where analysis must be focused on those areas most likely to be causing problems  A Pareto analysis should be used in the Measure and/or Analyze phases How Do I Use It?  Data should be gathered regarding the problem to be solved and the various factors that may be affecting it  This data can the be placed in Microsoft Excel, sorted, and placed into a histogram for easy analysis and viewing 26
  • 28. OEE OVERVIEW OEE and the Six Big Losses Equipme nt Total Available time Six Big Losses Planned Downtime Breakdowns 1 Available time 2 Setup / adjustment Available operating time 3 Actual operating time Effective operating time Idling / minor stoppages 4 5 Speed Defects in process and rework 6 Start up losses 28
  • 29. OEE OVERVIEW Availability “The percentage of time equipment is actually running when we need it” AVAILABILITY= AVAILABLE TIME – UNPLANNED DOWNTIME x 100% AVAILABLE TIME Where:Available Time = Total Available Time – Planned Downtime* *Note :- Planned Downtime could be PM, no scheduled work, breaks, etc. 1 Breakdowns Available time 2 Setup / adjustment Available operating time 29
  • 30. Planned vs. Unplanned Downtime Planned OEE OVERVIEW     Excess capacity. Planned breaks. Planned Maintenance. Communications briefs / team meetings. Unplanned (Losses)     Breakdowns. Set Ups and Adjustments. Late deliveries (material). Operator availability. Note : Planned time such as breaks, meetings and maintenance can be considered as losses (useful for encouraging ideas on how to minimise their disruption) as long as a consistent approach is taken. 30
  • 31. Productivity OEE OVERVIEW “The difference between the potential output and actual output, when the equipment was available” PRODUCTIVITY = IDEAL CYCLE TIME x ACTUAL OUTPUT* x 100% AVAILABLE OPERATING TIME *Note :- Actual Output is the Quantity of good & bad parts Available operating time Actual operating time 3 Idling / minor stoppages 4 Speed 31
  • 32. Operating Speed vs. Productivity OEE OVERVIEW Operating Speed Rate  The % of actual cycle time against ideal cycle time. Productivity  The Operating Speed Rate factored with interruptions to constant processing, i.e. idling and minor stoppages. 32
  • 33. Quality OEE OVERVIEW “The total good parts produced expressed as a % of the total parts produced” QUALITY= Actual operating time Effective operating time PARTS MADE – DEFECT QUANTITY x 100% PARTS MADE 5 6 Defects in process and rework Start up losses 33
  • 34. Processed vs. Defect Quantity OEE OVERVIEW Parts Made  The total quantity of parts produced in the available time Defect Quantity  The quantity of parts that did not meet the required standard (including rework) in the available time 34
  • 35. OEE and the Six Big Losses OEE OVERVIEW Equipme nt Six Big Losses 1 Available time Breakdowns 2 Available operating time 3 Actual operating time Effective operating time Idling / minor stoppages 4 5 Setup / adjustment Speed Defects in process and rework 6 Start up losses 35
  • 36. Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost due to key equipment breaking down or deterioration which causes the production to be stopped for more than 10 min. Start up losses 36
  • 37. Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 2 Breakdowns Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through “product change over and adjustment ” to the point where the production of the new product is completely satisfactory. Start up losses 37
  • 38. Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through key equipment being stopped for less than 10 min. Start up losses Time lost during the standard cycle when the equipment is not adding value. 38
  • 39. Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through key equipment not producing parts at its optimum rate. Start up losses 39
  • 40. Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 The time lost through key equipment not producing parts that meet the specified quality standard. Speed 5 Defects in process and rework 6 The time lost through key equipment being utilised to rework sub-standard parts. Start up losses 40
  • 41. Six Big Losses – What Are They? Losses Six Big OEE OVERVIEW 1 Breakdowns 2 Setup / adjustment 3 Idling / minor stoppages 4 Speed 5 Defects in process and rework 6 The time lost through key equipment not producing parts to the specified quality standard, following start up and before the equipment achieves controllable production conditions. Start up losses 41
  • 42. Quality Check OEE OVERVIEW Relief Req’d IFO Tooling Help Engineering 42
  • 43. “Support the Internal Customer” Tools required OEE OVERVIEW 43
  • 44. “Support the Internal Customer” Tools required OEE OVERVIEW 44
  • 45. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics OEE BASICS 45
  • 46. OEE Overview OEE OVERVIEW OEE combines manufacturing aspects of:  Availability – Actual uptime vs. scheduled time  Performance – Speed factor, actual rate vs. ideal rate  Quality – Good units vs. total units OEE = Availability × Performance × Quality TEEP = Utilization × Performance × Quality OEE and TEEP directly correlate to the amount of good product produced (transferred) versus total possible product. 46
  • 47. OEE Overview OEE OVERVIEW OEE (Overall Equipment Effectiveness) is the measure of the amount of good product produced compared to the amount of product that could have been produced if the manufacturing system operated perfectly for its entire scheduled time. Total Effective Equipment Performance (TEEP) is the measure of the amount of good product produced compared to the amount of product that could have been produced if the manufacturing system operated perfectly for the total time (calendar time) over the time period under consideration. 47
  • 48. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools OEE BASICS TOOLS 48
  • 49. OEE Overview OEE OVERVIEW TPM (OEE) Toyota Prod. System Breakdowns Setup & Adjustment Idling and minor Stoppage Reduced Speed Quality Defects Reduced Yield From Startup Implementing Flow Process Eliminating Defects Stockless Production Reduced Lot Size Quick Setup Standard Cycle Times Standard Production Sequence Standard Idle Time Visual Control and on Line Stop Alarm Improved Machine Operability Improved Maintainability 49
  • 50. How to collect data for OEE OEE OVERVIEW Key Points: 50
  • 51. How to collect data for OEE OEE OVERVIEW Example: Three Hourly Data Sheet 51
  • 52. How to collect data for OEE OEE OVERVIEW AVAILABILITY A B C=A-B Gross Time (in minutes) Planned Down Time (in minutes) Net Available Time (in minutes) Non planned stoppages (in minutes) Operating Time (in minutes) D E=C-D F = E/C (mins/ unit) G H I= (HxG)/E AVAILABILITY PRODUCTIVITY Output Standard Cycle time PRODUCTIVITY QUALITY Defect Quantity QUALITY J K = (G-J)/G 52
  • 53. Connected Manufacturing OEE OVERVIEW “Following the computer and the Internet, every machine tool will become a node on the network creating greater efficiency.” Connected Manufacturing Model Internet networked personal computing cooperative computing universal computer connectivity distributed computing batch computing time sharing Universal Machine Connectivity open systems & client servers micros / PC’s The technology is here today, the tools are readily available and cost effective minis mainframes 1960 1970 53 1980 1990 2000 2010 53
  • 55. ISA-95 Standards Profit Level 4 Level 3 Level 2 Level 1 MS Dynamics AX Mfg. Execution System Dist. Control System Connection Hardware Abstraction Layer Ax9150 UMI Machine Level 0 From AX: production plan, work orders To AX: production performance results 55
  • 56. OEE OVERVIEW ADC + OEE = Profits COLLATERAL BENEFITS OF MES Statistical evaluation of variability (Goal Setting) Best Ever Performance by Product/Process/Team Modeling and Analysis of the “Hidden Factory” Maintenance and Quality information Timeline charting of key events Learning Curve Information /ADC = Automatic Data Collection Setting Planning Values MES = Manufacturing Execution System 56
  • 57. How to eliminate Losses? OEE OVERVIEW 57
  • 58. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE OEE BASICS FINANCIAL OEE TOOLS 58
  • 61. OEE OVERVIEW OEE Overview The Power of Financial OEE to expose the “Hidden Factory” Practice Example Factory Scenario: Current State Annual Volume = 223,650 units IFO was $4,592,000.  „Financial OEE‟ Analysis: All Workstations at 85% OEE, and 99.8% Quality Factor  Volume increased by 33,787 units a 15 % increase  IFO increased by $4,544,000 a 99 % increase 61
  • 62. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE BASICS FINANCIAL OEE TOOLS ANALYSIS 62
  • 63. OEE Overview OEE OVERVIEW OEE Data Analysis Determine Variability, Capability Develop „SMART‟ Goals Analysis of Target Alternatives 63
  • 64. OEE Overview OEE OVERVIEW OEE Data Analysis 1. OEE: The Seen and Unseen 2. Real-time Performance Measurements - databases 3. Exposing Variability; Determining Capability 4. Developing OEE Performance Curves 5. Setting „SMART‟ Goals for Improvement 6. Data Analysis for Target Selection 7. Consensus Building using Cross-functional Teams 8. Combining Subjective-Objective data into a Decision Table 64
  • 65. OEE Overview OEE OVERVIEW Learning to „see‟ OEE  As a Strategic Tool and a Monitoring Tool  As a Reliability metric and a Business metric  As a leading metric and a lagging metric  Using OEE as a „fair‟ benchmarking metric  Quantify the value of each OEE factor 65
  • 66. Lean Thinking OEE OVERVIEW Lean Thinking Management System Model Management System Model reflects graphically, the The Lean integration of Hoshin Kanri (Strategic Deployment), Deming’s PDCA Wheel (plan–do–check–act) four-step model for carrying out change with the Toyota Way 2001 principles (Continuous Improvement and Respect for people), and how the lean management system is driven by customer requirements and level of satisfaction. The Lean Thinking Management System is used to implement the 5 Elements of Lean Thinking. 66
  • 67. The Deming Cycle OEE OVERVIEW ...Data based problem solving Typical PDCA: Plan quickly High Velocity Organization PDCA: Plan deeply • Discuss actual situation and target with • Address Symptoms everyone affected Do immediately • Really understand/model the problem and its root cause • Jump to conclusions Check roughly Act pretty much the way you did before Do many quick experiments • Validate your thinking Check implications carefully Act systematically • Update and deploy standards and checklist disciplines 67
  • 68. Lean Six Sigma OEE OVERVIEW Balance and Complexity and Increase Lean and Six Sigma are natural allies in pursuit of Reliability • Simplicity (Lean) business performance improvement • Simple, low reliability Complex, low reliability Lean reduces process and business complexity Simple, high reliability Complex, high reliability • Six Sigma increases process reliability and enterprise effectiveness • Lean and Six Sigma amplify each other and accelerate strategic benefits • Reliability (Six Sigma) Together, Lean and Six Sigma offer a significantly higher probability of success 68
  • 69. Current Condition OEE OVERVIEW …Ask what we already know Specific, detailed, quantitative, concise  Tables, graphs, histograms, value-stream maps, diagrams  Highlight exactly where problem occurs  Baseline to compare to metrics after countermeasures are applied Engage everyone affected by or causing symptoms Build Consensus on what is  Symptoms / Undesirable Effects everyone can see  Foundation of authority to experiment with countermeasures Update as understanding improves 69
  • 70. Goal – Next Target Condition OEE OVERVIEW …Model what we expect What baseline change is wanted?  What does perfect look like?  What does the organization need?  Realistically attainable target condition? Mentor ensures that the owner has both Plausible Hypothesis  Based on best available model/understanding of how the system works/could work Consensus among stakeholders  Target is attainable and desirable. Update as root cause and countermeasures developed 70
  • 71. Root Cause OEE OVERVIEW …Model Cause & Effect Identify underlying problem(s) causing symptoms  Root cause is typically faulty thinking or assumptions Addressing the root cause(s) improves all levels of symptoms/undesirable effects/visible damage. Build consensus among stakeholders  Broad agreement on Cause & Effect network  Reflect best current knowledge about how things work Some techniques: (explained of following slides)  Fishbone Diagram  5 Whys  Histograms  Pareto Analysis  Root Cause Analysis 71
  • 72. Root Cause Analysis OEE OVERVIEW What Is It? A tool used to identify contain and analyze a problem, defining the root cause, defining and implementing actions to minimize or eliminate the root cause and verification that corrective action prevented recurrence of then problem. When Do I Use It? How Do I Use It? When a problem is not easy to Involve a team to define without considerable collect and analyze analysis data using other problem solving tools While a root cause analysis can such as Pareto, 5 whys be used in any phase of a , brainstorming etc. continuous improvement project, it is most commonly deployed in the Define and Improve phases Who Should Use It? A root cause analysis can be completed by anyone on the project team It is recommended that project leaders be involved in its creation to ensure coordination of the analysis 72
  • 73. Root Cause Analysis OEE OVERVIEW How deep are you Problems The causal or willing or able to dig? contributing factors Are defined in terms of their... that, if corrected, would prevent Effects recurrence of the identified problem. But this is only what we see on the surface our habits and work procedures The “true” reason that contributed to the creation of a problem, defect or nonconformance. Causes What is happening under the surface? what is causing our habits and work procedures Root Cause A root cause is a blind spot beyond our reach they are hidden deep down, they feed into or create many of the causes that we see under the surface 73
  • 74. Root Cause Analysis OEE OVERVIEW Implement and Assess Gather Data Define Problem It is not a straight forward journey. You may end up in a dead end. It requires patience and persistence. Create a Solution Get to the Root Cause There are tools you can use to stay on track and ensure you arrive at a right destination. 74
  • 75. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE 5. OEE for Leadership BASICS FINANCIAL OEE TOOLS ANALYSIS VISION 75
  • 76. OEE Overview OEE OVERVIEW OEE for Leadership Where? When? What? Why? 76
  • 77. OEE Overview OEE OVERVIEW OEE for Leadership Where? When? What? Why? 77
  • 78. OEE Overview OEE OVERVIEW OEE for Leadership 78
  • 79. OEE Overview OEE OVERVIEW OEE for Leadership OEE Value Stream Analysis as a Strategic Tool Where? When? What? Why? 79
  • 80. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE 5. OEE for Leadership 6. OEE Value Stream Mapping BASICS FINANCIAL OEE TOOLS ANALYSIS VISION 80
  • 81. OEE Overview OEE OVERVIEW OEE Value Stream Mapping 81
  • 82. OEE Overview OEE OVERVIEW OEE Value Stream Mapping Maximizing IFO though strategic analysis Strategically Focused Targets, Aligned and Engaged from top to bottom, Solves the Success Riddle 82
  • 83. Value Stream OEE OVERVIEW The entire set of activities across all parts of your organization involved in delivering your product or service. • • • “CUSTOMER” 83
  • 84. OEE Overview OEE OVERVIEW OEE Value Stream Mapping Drill And Buff Rough Cut & Shape Sand and Paint Drill and Buff Assemble & Palletize Product A Product B Product C 84
  • 85. OEE Overview OEE OVERVIEW Understanding the Power of OEE 1. Learning the Basics of OEE Metrics 2. Maintenance/Production OEE Tools 3. Financial OEE 4. OEE Data Analysis OEE 5. OEE for Leadership 6. OEE Value Stream Mapping 7. OEE Value Stream Analysis BASICS FINANCIAL OEE TOOLS NEW TOOLS ANALYSIS VISION SHIFT GOALS BUSINESS GOALS $$$$ $$$$$$ 85
  • 86. OEE Overview OEE OVERVIEW OEE Value Stream Mapping 86
  • 87. OEE Overview OEE OVERVIEW OEE Value Stream Mapping Product A Product B Product C Product D 87
  • 88. OEE Overview OEE OVERVIEW IFO BENEFITS TABLE WC’S A +3 Pts, Same Vol. Vol. = 223,650 +3 Pts, and Refill the Factory Vol. = 233,615 (+9,965 units) #’S IN 1,000’S B BASE CASE IFO = $4,592 C D E $42 $48 $12 $13 $28 $625 $48 $12 $13 $28 Improving WC A has the possibility of 13 times more value than any other WC for the condition of +3 OEE Pts. higher Availability/Reliability From 68.0 % to 71.0 % 88
  • 89. OEE Training OEE OVERVIEW Understanding the Power of OEE  14 Modules will cover the 7 study areas  Each Module will bring game changing tools for application  In total, the Best Business Strategy is revealed 89
  • 90. OEE Training OEE OVERVIEW OEE-College.com Training Modules The Overview module demonstrates the Delivery Format Each Area of Study is contained in an individual CD Each module on the CD is a narrated PPT Presentation Modules are provided both With and Without the „Refocus Game‟ Modules are ≈40 min. leaving 10-15 min. for group discussion The „Practice Factory‟ Base Case excel workbook example templates and 14 “What IF?” investigations are provided on the final CD. The workbooks can be adapted to model your specific Product Flow lines and generate your „Financial OEE‟ 90
  • 91. OEE Training OEE OVERVIEW OEE-College.com Training Modules Recommended use of the training modules would be: Designate Productivity Improvement Leaders for High Value Line of Business (LOB) flow lines on your plant site. These individuals should become familiar with the Practice Factory example workbooks and be able to generate new Base Case workbooks and Benefits Tables specific to their LOB flow line. All of the Plant Leadership should review all of the modules to gain knowledge and understanding of the critical steps for Financial OEE so everyone is one the same page. Shop floor people should review at least the first 5 areas of study and practice applying all of the „Tools‟ at their workstations. 91
  • 92. OEE Training OEE OVERVIEW OEE-College.com Training Modules The OEE-College.com set of Training Modules cover 7 key areas of Study that span from OEE Basics to Financial OEE. Financial OEE is a New Tool for Plant Leadership Teams to expose exactly where to apply resources for the highest Return On Investment (ROI) relative to a stipulated Product Mix. Financial OEE Overview By Robert C. Hansen, PE., CMRP, Author Owner RC Hansen Consulting, LLC 970-490-1720 cell 970-481-3145 Robert.Hansen@OEE-College.com 92
  • 93. OEE OVERVIEW $$$$ $ Increase manufacturing efficiency 10 - 50% Critical metric of TPM World Class Best Practices Visibility Culture of Productivity Competitive Edge Profitability increase 20 – 300% 93
  • 95. Introduction to OEE The Power of OEE Generate more Profits $$$$ $ OEE OVERVIEW Memex Automation Inc. 905-635-0590 cell 416-460-7637 JRattray@memex.ca 95