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How Overall Equipment Effectiveness fits into manufacturing

No matter what type of process or manufacturing operation you are involved in, and regardless of company size, you are likely to be under constant pressure to improve performance, improve quality, and increase equipment availability. OEE Overall Equipment Effectiveness provides a solution.

Overall Equipment Effectiveness (OEE) is a series of metrics that is used to measure performance initiatives. Most often Overall Equipment Effectiveness is used in conjunction with Total Productive Maintenance. OEE is a powerful lean manufacturing tool, especially when combined with other tools using an integrated approach. This type of metric allows managers to determine the success of their Total Productive Maintenance processes.

Overall Equipment Effectiveness is a simple, but clever calculation, which focuses on the individual items of process or manufacturing equipment, at a finite level, and allows their "effectiveness" to be measured individually or in groups (i.e. with other equipment items). The OEE calculation is always based on the ratio of the three key production parameters. These parameters are:availability, performance, and quality with time (e.g. planned shift times) being used as the baseline measurement. These factors are known as the availability rate, the performance rate, and the quality rate. Here is a brief overview of each-

  1. Availability Rate-The availability rate is defined as the time the equipment is really running, versus the time it could have been running. A reduced availability rate is an indication of equipment failures, and issues, around setup and adjustments. It stands to reason that if equipment is down to long, then productivity suffers and profitability cannot be maximized.

  2. Performance Rate-The performance rate is defined as the quantity of material that is produced, during the running time, versus the quantity of material that could have been produced, when taking into account the manufacturers documented speed of the equipment. A low performance rate can be seen as a result of idling, minor stoppages and reduced speed operation. If the machine(s), can be kept from having to be lowered in speed then production can continue at a maximized capability.

  3. Quality Rate-The quality rate is defined as the amount of acceptable material, versus the total amount of material that is manufactured. A low quality rate is often an indication of startup losses, and the amount of scrap material. Manufacturers often implement a quality control program, such as Six Sigma to help regulate and boost quality. The metric of Overall Equipment Effectiveness is then used to determine how successful the program is overall.

The bottom lines is that if these areas can be addressed simultaneously then significant improvements, can be made throughout the production process, output can be increased, product variation can be expanded, and production cost reductions can be achieved using OEE.

The largest opportunities for curtailing waste should be improved first, working down the list until all opportunities are improved. Studies show that the improvement opportunities are always in one of the following areas:

  • Breakdown

  • Setup

  • Downtime

  • Speed loss

  • Small stops

  • Quality

It is believed that OEE is an excellent way of communicating the improvement opportunities to everyone, including:operators, maintenance technicians, sales representatives, engineers and managers. Employees take ownership in helping to improve the Overall Equipment Effectiveness rate, when they are properly trained.

When a business first uses Overall Equipment Effectiveness metrics they can see the real efficiency of their equipment. They will then have the information, from which they can set improvement goals, for their operation. In turn, by improving the availability, performance, and quality rates, a manufacturer can then reduce their expenditure, on maintenance, and raw materials, as well as improve their manufacturing capability, and customer delivery times. This helps improve customer satisfaction and improve profitability.

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