Oee Presentation - System A Tics

OVERALL EQUIPMENT EFFECTIVENESS - OEE A Tool to Drive Manufacturing Competitiveness

OEE - A Tool to Drive Manufacturing Competitiveness

Meet Jim . . . Jim is Operations Director for a fictitious, soft drinks bottling plant. From two bottling lines, the plant ships over 3M Jim’s challenge (opportunity ?) : units per annum.

Jim

Sales are up, margins are tight, and the capital budget is very limited !

To propose a production solution to meet a demand of an additional 750,000 units per annum. (an output increase of approx 25%). 2 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Jim has just come out of a somewhat unproductive meeting with his management team :

Jim

Planning - “Batch sizes continue to decrease as customers accept less inventory” Engineering - “Changeover times are being maintained with an extra Fitter on each of the lines” Operations - “Lines are running flat out - we need more capital equipment and we need to order it soon !” 3 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

After a restless night’s sleep, Jim comes in to work with the problem of the extra 750,000 units still on his mind. Jim

As he crosses the Production floor he again notices something he has seen on a number of other occasions. This morning he decides to get to the bottom of it ! Why does one of the lines run slower than the other ? 4 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Why does one of the lines run slower than the other ?

Jim

While the Production Manager isn’t sure why the line-speeds are different, eventually Engineering explain : “Line Two produced too many rejects at full speed so we turned the speed down by about 10% to improve the quality.” “It seems to have done the trick - reject levels are much lower on Line Two now !” 5 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

And talking of rejects . . . . Our quality performance is very good - better than 98% at the end of the line ! Jim

How come these ‘Line Two rejects’ don’t show up ? “Well they’re not really ‘rejects’ - they fall off the filling line for various quality problems, but can be put back on the line and re-run successfully.” “Makes more sense than scrapping them !” But this means that it takes two operating cycles to produce each ‘reject’, with a consequent capacity loss each time ! 6 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Thinking about the original business justification for the lines, Jim remembers that the speed quoted by the equipment supplier was significantly higher than the speed they are running at now ? Jim

The original design specification showed both lines capable of running more than 10% faster than Line One runs currently ! Why are these lines not running at the design speed ? It’s soon clarified for Jim : “That speed was an estimate for the financial justification - we never really expected to be able to run the lines at that speed for any sustained period.”

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OEE - A Tool to Drive Manufacturing Competitiveness

Jim wondered about what other losses were occurring on the lines.

Jim

Breakdowns and changeovers also caused the lines to loose output. Records for the past three months show that breakdowns account for a 30% loss, while breaks, shift-handovers, product change-over, cleaning, quality checks, material run outs and meetings mean that the lines are only running for 50% of the total time that they are available to run ! 8 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Jim doesn’t know it, but he is learning the hard way about OEE - Overall Equipment Effectiveness.

Jim

OEE is used by many of the world’s best companies to assess equipment performance and to drive operational performance improvements. OEE is the crucial link between the financial and operational performance of production assets. Jim is beginning to understand that his bottling lines are running at less than 40% OEE ! Perhaps investing in a new line is not the only option ! 9 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness What is OEE and why is it used ? The overall performance of a single piece of equipment, or even an entire factory is governed by the cumulative impact of three factors : Availability Performance Rate Quality Rate OEE is a very simple, but profoundly important, performance measure that makes this information visible and combines these three key parameters into a single measure of performance.

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OEE - A Tool to Drive Manufacturing Competitiveness What is OEE and why is it used ?

OEE can be defined as : The quantity of good product produced as a percentage of what would have been produced in the time the equipment was scheduled to run, running at the machine design rate, and without producing defects.

OEE =

Good Units Completed Scheduled Time

x

Design Rate 11 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness What is OEE and why is it used ? Total Time Unscheduled Unscheduled Time Time

Scheduled ScheduledTime Time

Planned PlannedProduction ProductionTime Time Unplanned Unplanned Downtime Downtime

Uptime Uptime

Net NetOperating OperatingTime Time Equivalent Equivalent Operating Operating Time Time

Yield Yield Loss Loss

Planned Planned Downtime Downtime

Speed Speed Loss Loss

Changeovers Changeovers PM’s PM’s

Breakdowns Breakdowns Waiting Waiting Reduced ReducedSpeed Speed Idling Idling Defects Defects Rework Rework

Availability Availability AA Performance Performance PP Quality Quality QQ

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OEE - A Tool to Drive Manufacturing Competitiveness What is OEE and why is it used ?  OEE focuses on Availability, Performance and Quality.  It is an all-inclusive measurement of equipment productivity.  It can help identify and quantify specific opportunities for improvements in operational performance.  It can be used to save companies from making inappropriate purchases, and help them to focus on improving the performance of machinery and plant they already own.  And, when investment in a new machine is necessary, the OEE measure can be used to make sure that the performance of the equipment satisfies the original business case.  In addition, it can also be used to ensure that equipment suppliers deliver what they promised ! 13 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

In OEE terms, Jim’s plant looks like this :

OEE = A * P * Q Jim Availability (A)

=

50% OEE

Performance (P)

=

85%

= 38.35%

Quality (Q)

=

90% 14 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Back to the real world . . . Jim’s story is not untypical. Decisions to purchase equipment, production lines and whole factories are frequently made with lack of meaningful performance information. Some companies (like Jim’s) do not measure any of the key parameters of machine or plant performance . . . . . . and of those that do, most fail to consider the compound effect of speed, quality and availability. 15 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness Systematics have developed an application PERFORM OEE which reports OEE performance for production lines, identifying and quantifying the root causes of OEE losses MAIN PLANT

MANUFACTURING FILLING PACKAGING

OEE ANALYSIS

OEE ANALYSIS

OEE

Unaccounted

Yield Loss

FILLING-1 PACKAGING – LINE 1 PACKAGING – LINE 2

Planned Downtime

Unplanned Downtime

Speed Loss

DOWNTIME ANALYSIS 48%

95%

93%

42%

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OEE - A Tool to Drive Manufacturing Competitiveness

Let’s get back to Jim . . . - because this story has a happy ending . . .

Jim

Using OEE methodology, Jim has identified the major causes of lost capacity on the lines and has initiated a capacity improvement program using OEE to drive improvement actions. Jim and his team have improved the plant OEE performance from 38% to 50%. (and have a plan to get to 55% within the next six months !) 17 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Since learning about OEE, Jim has heard similar success stories from other manufacturing operations :

Jim

A medium sized engineering company - avoided a €250,000 expenditure on a new cutting machine by improving the performance of an existing one. A pharmaceutical manufacturing company - improved the OEE of existing packaging lines from 30% to 50%, thereby avoiding the purchase of an additional line. An automotive components supplier - improved the output from production cells to enable the demand to be fulfilled over two shifts instead of three. A frozen-foods producer - revitalised a flagging continuous program, by introducing the OEE measure along with ‘operator-driven’ improvements on the shopfloor.

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OEE - A Tool to Drive Manufacturing Competitiveness

OEE up from 38% to 50% ! - that’s an output increase of over 1M units per annum . . . No capital expenditure ! Jim

No extra shifts or overtime ! No extra headcount ! Significantly reduced operating costs !

A much happier man than when we started the presentation !! In fact, rumour has it that Jim is in line for the next VP job ! 19 of 2 0 ‫شرکت خدمات مهندسی ره آوردگستره شرق‬

OEE - A Tool to Drive Manufacturing Competitiveness

Thank You

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