Top OEE & Lean Manufacturing Terms Explained

Top OEE & Lean
Manufacturing Terms
Explained
Understanding downtime and related terms can be your first step towards effectively
reducing unplanned breakdowns eating up production in your shop floor. This guide will
help you in understanding various technical terms related to downtime and OEE which
will make it easier for you understand even the complex terms.

5 Why Analysis
 It is a very simple yet effective concept of asking questions till the root cause
of the problem is clearly identified. 5 Why Analysis concept originated in
Toyota Motors and was conceptualized by Sakichi Toyoda for finding the root
cause of the problems that effected production. It is used for exploring cause
and effect relationship. The principle says that just by eliminating the
superficial cause of the problem wouldn’t put an end to it as the main cause
may still be present and hence it can cause the same problem again bringing
repeated downtime and hence when the problem occurs one should get to the
root cause of the problem so that comprehensive solution can be provided.
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5S Principle
 5S is one of the best Workplace Organization methodologies. It is a concept which originated
in Japan and it is a technique which enabled ‘Just in Time’ manufacturing. 5S consists of 5
working principles starting from S in Japanese.
 Seiri meaning Sort: Remove all the items which are not needed immediately at the workplace
and keep the workplace uncluttered.
 Seiton meaning Set in Order: Keep all the things at the work place in the order of their
requirements so that minimum time is wasted in finding them as and when they are required.
 Seiso meaning Shine: Keep everything at the workplace spic and span so that even the minor
defects are visible easily and inspect the work place on regular basis for checking any problem.
 Seiketsu meaning Standardize: Make the procedures and methodologies standard so that any
lag in the system can be identified easily.
 Shitsuke meaning Sustain: Maintain the same standard so that the problems do not arise in
future.
 It is a methodology which reduces unnecessary problems in the workplace and makes
response time faster as the required things can be located faster and defects can be
identified easily.

TPM (Total Productive Maintenance)
 Total Productive Maintenance (TPM) is a concept which focuses on increasing the
overall productivity of the plant, equipment and manpower with reduced
breakdowns. TPM is a comprehensive approach which aims at reducing the
unplanned breakdowns, defective productions, slow running of the processes and
provide a safer working environment with no accidents. It is a process which
focuses on preventive maintenance so that unplanned stoppages which not only
cause loss of production from one assembly line but also affect other processes are
eliminated. It not only focuses on OEE principles but also makes everyone
associated with the process accountable and hence operators too become a part of
the process.
 Three main objective of TPM are:
 Increasing up time of the various equipment in the process
 Reducing the cycle time considerably
 Elimination of the defects in the process

Overall Equipment Efficiency (OEE)
 Overall Equipment Efficiency is a very important metric when it comes to tracking
the productiveness of any plant or machinery. It is a metric which is used to
analyze how effectively the manufacturing capacity is being utilized. It calculates
the fully productive time by getting the product of the availability of the
equipment, their performance ratio and the quality of the finished goods which
gives a good insight on how effectively the process is running.
 Availability can be calculated by: Run Time/ Total Planned Production Time
 Performance can be calculated by: (Ideal Cycle Time X Total Produce)/Run Time
 Quality can be calculated by: Good Count/ Total Count
 OEE= Availability X Performance X Quality

Autonomous Maintenance
 Autonomous Maintenance is an important part of TPM which focusing on
preventive maintenance of machines carried out by the operator to avoid any
undue breakdown. It empowers the machine operators to carry out regular
checks of the machines to ensure that they do not develop any technical
issues due to negligence. This includes performing simple maintenance tasks
like cleaning, lubrication, bolt tightening, inspection and monitoring of the
machine.

Planned Maintenance
 Planned maintenance is a proactive preventive approach where scheduled
maintenance is carried out to maintain the functioning of the machines. This
term should not be considered as downtime of the machines as it is a
scheduled activity to ensure that the unplanned breakdowns can be
minimized and the uptime and productivity of the machines can be improved.

Quality Maintenance
 Quality maintenance is an important part of TPM and it tries to achieve ideal
zero defect condition from the manufacturing process. This is undertaken by
understanding and controlling the whole process and its interaction with all
the other components like manpower, material, machines, delivery, etc. It
aims at eliminating defects originating at any part of the process and make
the whole process more productive.

Availability Loss
 Availability Loss is an important parameter for calculating OEE. It is the time
the machines were not working during the planned production time. The
Availability loss can occur due to various reasons like equipment failure,
material shortage, or any other such issue. The time taken for the shift
changes and other changeovers is also considered as Availability loss and
during that period too the production gets affected. Availability loss needs to
be minimized to get the highest productivity.

Equipment Loss
 Equipment Loss is one of the six big losses of OEE. This is the loss of
productivity due to breakdown of machinery. It is a loss occurring at a time
when the plant is scheduled to run but is not fully functional due to any
equipment failure.

Performance Loss
 Performance loss is one the major losses in the functioning of a plant.
Performance loss takes into account the loss occurring due to idling and minor
stoppages, reduced speed or other factors responsible for the loss of
production speed. Performance score of 100% is desired to get a good OEE
score as it means that all the components of the production are running at
ideal speed and aren’t encountering any unnecessary lag.

Quality Loss
 Quality loss is one of the three major losses of OEE and it is determined by
the process defects and reduced yield of the plant. Quality loss means a loss
of not only the material but also the time consumed in producing it,
manpower and the equipment utilization during that period. A quality score of
100% means that a plant is producing only quality good during whole time of
its production.

Down Time Loss
 Down Time loss is a big OEE loss as it is the loss of production due to
unavailability of equipment due to unplanned downtime. This hampers
production and leads to idling of the manpower and production shortage.

Error Proofing
 Error proofing is the process of detecting errors in the process and equipment
so that OEE losses can be prevented. Error proofing is a very important work
as it ensures that the process defects and reduced yield is minimized and the
plant produces quality products and runs to its optimum capacity.

Focused Improvement
 Focused Improvement is an effective technique of Lean Manufacturing which
aims and reducing unplanned downtime considerably so that the production
efficiency can increase. It aims at root cause analysis of the factors causing
unplanned downtime by 5 why analysis. In this process the team goes to the
root cause of the problems so that the issues can be eliminated from the
system completely.

Fully Productive Time
 It is the actual productive time of any plant where all the components of the
production were running on their full capacity. It is an important factor in
calculating OEE for any plant and it means that during this period no
availability loss, quality loss or performance loss was observed.

Ideal Cycle Time
 It is the theoretical minimum time to produce any good. Ideal cycle time is
used to calculate the efficiency rate of the machines, manpower and the
process.

Lean Manufacturing
 Lean Manufacturing is the system to eliminate any kind of waste from the
production system. It is a process which aims at delivering the maximum
value to the customer with zero waste. It strives to optimize the entire
process so that process defects, wastage and various system losses are
minimized and value added goods are delivered to the customer.

Net Run Time
 Net Run Time is the actual time the plant was working at its full capacity. It is
the time the plant was functioning subtracting the scheduled loss, availability
loss and performance loss from the All Time available for production.

Process Defects
 Process Defects are the defective parts produced during the production time.
It is one of the big losses of OEE during steady state production. Process
defects lead to production of defective items which lead to loss of actual
productivity, material, manpower to produce it and actual countable
production.

Production Counts
 It is the number of parts produced during steady state production in a
manufacturing process.

Production Rejects
 Rejected parts produced during steady state production. It is one of the six
big losses of OEE. It is also known as process defects.

Reason Code
 It is the identification number or classification for event subcategory. It is
used to identify the problems of any particular nature in the manufacturing
process. Reason codes makes it easier identify the problems and resolve them
specifically. It is used to minimize downtime losses by proactively identifying
the problem areas.

Reduced Yield
 Reduced yield is the reduction is production immediately after an equipment
failure or setup or adjustment of any equipment. It is one of the six big losses
of OEE.

Root Cause Analysis
 Root Cause Analysis is the process of getting to the root cause of the problem
in the equipment causing unplanned downtime. It is the process of
understanding the main reason behind the problem by 5 Why analysis where
not only the superficial reasons are resolved but the actual cause of the
problem is understood so that the problem can be resolved completely and
any unplanned downtime can be avoided.

Six Sigma
 Six Sigma is a systematic quality program which strives to avoid any deviation
in the process. It aims at reducing the quality losses by standardizing the
whole process of manufacturing. It is a quality improvement program where
the system is molded to function in a standardized manner so that maximum
quality products can be achieved.

SMED
 Single Minute Exchange of Dies (SMED) is a program to reduce setup time.
SMED is an important part of OEE as it increases the availability of the
machines and operators and aims at achieving shorter changeover time.

TEEP
 Total Effective Equipment Performance (TEEP) is the metrics used for
measuring performance and true capacity of any manufacturing process. It is
calculated by taking into account equipment losses and scheduled losses. It is
measured by multiplying OEE percentage and Utilization percentage.

Six Big Losses
 Six Big Losses are the six categories which cause availability loss, performance
loss and quality loss leading to reduced Overall Equipment Efficiency. The six
big losses are equipment failure, time taken for setup and adjustment, time
wasted during idling and minor stoppages, reduced speed, process defects,
reduced yield. These six big losses need to be curbed if any process intends to
achieved good OEE score and increase its production efficiency.

Bottleneck
 Bottleneck is a point in the production cycle where the demand from the
resource is equal to or more than its actual production capacity. Bottlenecks
are used to identify machines in the manufacturing process which are critical
to the whole production cycle.

Band-Aid
 It is the temporary fix applied to any machinery during the production cycle.
Band-aids are superficial treatment of a problem so that the process can
continue to run till the machine can be properly repaired during the
scheduled downtime. A band-aid might be applied many times as it does not
provide a permanent solution to the problem.

Competitive Benchmarking
 Competitive benchmarking is the process of comparing a plant’s performance
to a best in class competitor for understanding the areas of improvement.
Competitive benchmarking gives industries a clear idea on the things to
improve and the methods to be standardized so that higher performance can
be achieved.

Just in Time
 Just in Time production methodology aims at reducing inventory waste by
producing only the goods which are required by the customers and as they are
required. It is system devised to reduce the waste associated with
overproduction.

Key Performance Indicators (KPIs)
 Key performance indicators (KPIs) are the measurable parameters which
indicate the performance of any business or process. KPIs are used to measure
the quality standards followed and the results attained. These are the factors
used to evaluate the success of any process and may differ from process to
process.

Planned downtime
 It is the amount of time scheduled in the production for maintenance of plant
and equipment. It is a time utilized for repair or upgrade of the machinery so
that higher efficiency can be achieved. This time helps in increasing the
reliability and performance of the machines so that unplanned downtime can
be minimized and the process runs smoothly in the productive hours.

Predictive Maintenance
 This is a maintenance technique used for understand the condition of in-use
machinery so that they can be serviced before any unplanned downtime takes
place. Predictive maintenance analyzes the condition of the machines based
on their performance and predicts which machines need to be serviced on
priority.

Preventive Maintenance
 Preventive maintenance is carried out on machines still in use so that they do
not fail and cause unplanned disruption of work. It is a task undertaken by
machine operators to ensure that the machines keep working in the desired
condition.

Reactive maintenance
 Reactive maintenance is the process of attending a machine which has broken
down during the working hours. It focuses on restoring the machine to its
working condition so that the production process can be maintained.

True Downtime Cost
 True downtime cost is the calculation of the actual cost associated with the
downtime of a machinery in any plat or manufacturing unit. It takes into
consideration all the factors associated with the downtime and the processes
affected by it and denotes a monetary value to it. Like when a machine
breaks down not only the cost of the machine breakdown is associated with it
but also the labour which has gone idle, the loss of production caused due to
it and the other processes which are affected due to unavailability of the
products from that machine are taken into account. It considers all the
tangible and non-tangible costs of the process.

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Top OEE & Lean Manufacturing Terms Explained

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