1_3. overall equipment effectiveness

8/7/2019 1_3. Overall Equipment Effectiveness

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Pukyong National Univ. IntelligentMechanics Lab.

Prof. Bo-Suk Yang

Intelligent Mechanics Lab.

Pukyong National University

- Overview -

Overall EquipmentEffectiveness()

Maintenance Optimization

Machines have souls.

If you take special care about them, they will return it.


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Pukyong National University IntelligentMechanics Lab.

Pressured by current economic conditions and global competition,manufacturers are becoming increasingly sensitive about operational

costs.

In this environment, it pays to consider both creative and proven

methods that you can use to bring your product to market at minimum

cost and can be guaranteed by an effective maintenance system.

OEE is a method that meets this objective.

OEE is a performance metric compiled from machine-availability data.

OEE also captures the reasons for downtime (e.g. machine conditions,

material status, production personnel, or quality issues) and can

deal with the individual machine level, a line level or the entire plant.

At the plant level, OEE metrics can be correlated with other plant

metrics to provide key performance indicators.

ASurvival Tool for Manufacturing

Reference: Jack Wilkins, Sensors, Nov 16, 2007


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The overall performance of a single piece of equipment or even an

entire factory, will always be governed by the cumulative impact of

the 3 OEE factors:Availability, Performance Rate & Quality Rate

Definition of OEE

OverallEquipmentEfficiency

Availability Performance Quality= v v

Outages of

machines

Retooling &

adjustment

Reduced

operating

speed

Idle time& short

standstills

In process

quality errors

Startup difficulties


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OEE is a percentage derived by multiplication of the three ratios forthe factors mentioned above.

OEE is a measure comparing how well manufacturing equipment is

running compared to the ideal plant.

The resulting measurement is expressed as the ratio of the actualoutput of the equipment divided by the maximum possible output of

the equipment under ideal conditions.

In other words, OEE takes an holistic view ofall losses that impact on

equipment performance: not being available when needed; not running

at the ideal rate and not producing first quality output.

Definition of OEE


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Managers can monitor OEE plant metrics and drill down to find the

root causes of problems, getting minute-by-minute updates to enable

real-time process improvement.

Downtime reductions can be readily achieved by using OEE to gain

visibility into machine status and to analyze problems.

Facility operators and supervisors spend an enormous amount of timerecording, analyzing, & reporting on downtime, then further explaining

these reports to management.

OEE system captures & reports downtime and efficiency automatically.

This eliminates the time wasted in non-value-added reporting and

allows personnel to focus on more valuable tasks.

With OEE, everyone from the plant floor to the boardroom is more

informed, more often, more easily.


Reference: Jack Wilkins, Sensors, Nov 16, 2007


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OEE also enables predictive maintenance, which can dramaticallyreduce repair costs.

As the information on factors contributing to downtime grows in the

historical database, the maintenance department can classify trends

and predict impending failures.

Also, by interfacing OEE system with a Computerized Maintenance

Management System (CMMS), the maintenance department can

take proactive steps to do predictive maintenance.

For example, maintenance can order the necessary part in advance

and get better rates.

It can allocate repair personnel from an existing pool of resources

instead of hiring someone on an emergency basis.



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All this can result in huge savings compared with repairing a machineafter the breakdown has happened.

The net effect ofreduced machine downtime, higher productivity of

operators, and reduced defects is the ability to achieve higher

production levels with the same amount of resources.



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Generally, operations of most manufacturing plants are running at only

60% efficiency during uptime. The other40% of the total equipment timeare lost due to various downtime.

Among which, 15% of plant utilization are lost to scheduled downtime.

Scheduled downtime can be preventive maintenance, setup, change of

consumables/materials, production test and so on.

Unscheduled downtime accounts for10%, which is usually difficult to quantifybut preventable if proper preventive measures are taken.

The remaining significant 15% of the total utilization is lost as hidden downtime.

Hidden downtime can be due to shift

interruptions, minor maintenance issues,

operator not available and so on, which

are difficult to quantify and remain

unnoticed without a monitoring system.

Plant Utilization Statistics

Uptime

Scheduled

Downtime

Unscheduled

Downtime

Hidden

Downtime


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Technology Roadmap, the Semiconductor Industry Association (SIA) identified

the need to improve Overall Equipment Effectiveness, which is an industry

standard measure of equipment productivity.

Surveyed the industry and found that an average piece of wafer processing

equipment has an OEE of45%.

Need to increase OEE from 45% to 65% by 2002, and to 80% by 2011.

The number oftest wafers used is a significant factorin OEE. Today, 33% ofwafers processed are used to test processing equipment, to make sure the

equipment is operating correctly.

Plant Utilization Statistics


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When a failure incident occurs there is a consequential loss of profitsand accumulating of costs.

Cost of failure includes lost profit, the cost of the repair, the fixed and

variable operating costs wasted during the downtime and a myriad of

consequential costs that reverberate and surge through the business.

The costs of failure cannot be escaped and are counted in millions ofdollars of lost profit per year.

Total defect and failure true costs are not normally recognized by

managers, yet they can send businesses bankrupt.

In the instance of a failure all its costs and losses are automatically

incurred on the business.

These costs can only be prevented by precluding the failure in the first

place.

Defect and Failure Cost?


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Cost of Failure to a Business

Normal business in operation

= +

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A failure incident occurs at time t1 that stops the operation. Future profits are lost because no product can be made

(though inventory can still be sold until it is gone).

Fixed costs continue accumulating but are now wasted because

no product is being produced.


Effects on costs and profit of a failure incident


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Some of the variable costs will fall because they are not used,whereas some, like maintenance, will suddenly rise in response

to the incident.

Other variable costs are retained in the expectation that the equipment

will get back into operation quickly.

These are also wasted because they are no longer involved in makingsaleable product.


Effects on costs and profitof a failure incident


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Losses and wastes continue until the plant is back in operationat time t2.

The cost for repair from a severe outage can be many times

the profit made in the same time period (dotted outline).


Effects on costs and profit of a failure incident


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When a failure happens many people suddenly get involved insolving it.

Meetings are held, overtime is worked, subcontractors are brought-in,

engineers investigate, parts and spares are purchased to get back in

operation.

Instead of the variable costs being a proportion of production, asintended, they instead rise and take on a life of their own in response

to the failure.

The losses grow proportionally bigger the longer the repair takes or

the greater the consequences of the failure.



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Shaded areas in figure that when a failure happens the cost tothe business is lost future profits, plus immediately wasted fixed costs,

plus immediately wasted variable costs, plus the added variable costs

needed to get the operation back in production.

There are many other consequential costs too.



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The losses and wasted costs accumulate in production, the cost ofmaintenance climbs, the knock-on costs() and

wasted

time across the business rise and profits in the business fall.


Effects on profitability ofrepeated failure incidents

http://www.lifetime-reliability.com


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Each organization is different and each defect, error and failure itsuffers has different consequences.

The total cost to the organization of an incident will be shared

amongst the departments and people involved.

The proportion of the cost each department ends up carrying

depends on the extent of its involvement.

The total and true costs incurred by a business from a failure event

reverberate and surge throughout the organization.

The 60 consequential costs listed below reflect a good number of

them, though there are others specific to each organization and

you will need to identify and record them.

Total and True Failure Cost and Defect Cost



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Labour : both direct and indirect operators

repairers

supervisory

management

engineering

overtime/penalty rates

Product waste

scrap

replacement production

clean-up

reprocessing

lost production lost spot sales

off-site storage



Services emergency hire

sub-contractors

travelling

consultants

utility repairs

temporary accommodation

Materials

replacement parts

fabricated parts

materials

welding consumables

workshop hire shipping

storage

space

handling

disposal


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Equipment OEM

energy waste

shutdown

handover

start-up

inefficiencies

emergency hire

damaged items

Additional capital

replacement equipment

new insurance spares

buildings and storage



Consequential penalty payments

lost future sales

legal fees

loss of future contracts

environmental clean-up

death and injury

safety rectification

Administration

documents and reports

purchase orders

meetings

meeting rooms stationary

planning, schedule changes

investigations and audits

invoicing and matching


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Looking at machine operation, we distinguish six types of wastewe refer to as losses, because they reflect lost effectiveness of

the equipment

These six big losses are grouped in three major categories:

downtime, speed losses, and defect losses

Loss Categories The Six Big Losses

Downtime

(lost availability)

Equipment failures ()

Setup and adjustments ()

Speed losses(lost performance)

Idling and minor stoppages () Reduced speed operation ()

Defect losses

(lost quality)

Scrap and rework ()

Startup losses ()

Six Big Losses


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Merely considering on the optimization of the maintenance strategyis inadequate to cease or to minimize these losses

A unitary approach is needed which considers the factors influencing

the OEE and enables complex solutions.

This approach is delivered by the maintained production concept.

The realization of the maintained production is based on the constantoptimization of the condition of machines and equipments.

Six Big Losses


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Maintenance Improvement Process

OEE

Goals for a capacity improvementandmaintenance optimization process


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Typical goals for a capacity improvement and maintenanceoptimization process would be:

Improve overall system availability by __ %

Improve customer satisfaction index by __ %

Decrease maintenance expenditures by __ %

Decrease unplanned downtimes by __ % Decrease annual equipment replacements by __ %

Improve craft skill and cross-training knowledge by __ %

Decrease personnel overtime by __ %

Improve the documentation of equipment problems by __ %

Implement automated work order processing for _ services centers by {date} Reduce the number of safety related incidences by __ %

Typical Goals


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Maintenance optimization is about how work is done. We often think ofdesign as applying only to products.

Yet, maintenance optimization is based on the premise that the design

of processes - how work is done - is of essential importance.

Starting point for organizational success is well-designed processes.

Equipment reliability is improved, equipment life is extended, product

quality is improved, and capacity goes up.

The net effect is an improvement in the OEE, achieved by increasing

the combination of factors associated with availability, capacity and

quality.

The key issue in order to achieve improved OEE is therefore

"What is the best process by which to maintain and

operate the critical and important equipment?"

Maintenance Improvement Process


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Downtime refers to time when the machine should be running,

but it stands still.

Downtime includes two main types of loss: equipment failures,

and setup and adjustments.

Equipment Failures Loss ()

Sudden and unexpected equipment failures, orbreakdowns, arean obvious cause of loss, since an equipment failure means that

the machine is not producing any output.

Downtime Losses (LostAvailability)

The economical consequences from an unexpected one-day stoppagein industry may become as high as up to 100,000 ~ 200,000 euros :

Nuclear power plant: 300,000 Pulp and paper plant: 200,000 Steel works and continuous casting: 150,000 Chemical factory, coal power station and mining plant: 100,000 Oil refinery: 50,000 (Holmberg et al., 2004)


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Setup & Adjustments Loss ()

Most machine changeovers require some period of shutdown so

that internal tools can be exchanged.

Time between the end of production of the last good part and

the end of production of the next good part is downtime.

This downtime loss often includes substantial time spent making

adjustments until the machine gives acceptable quality on new part.

Downtime Losses (LostAvailability)

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A speed loss means that the equipment is running, but it is not

running at its maximum designed speed.

Speed losses include two main types of loss: idling and minor

stoppages, and reduced speed operation.

Idling and Minor Stoppages ()

When a machine is not running smoothly and at a stable speed,

it will lose speed and obstruct a smooth flow.

The idling and stoppages in this case are caused not by technical

failures, but by small problems such as parts that block sensors or

get caught in chutes.

Although the operator can easily correct such problems when they

occur, the frequent halts can dramatically reduce the effectiveness

of the equipment.

Speed Losses (Lost Performance)


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Reduced Speed Operation (,) Reduced speed operation refers to the difference between the actual

operating speed and the equipments designed speed (also referred

to as nameplate capacity).

There is often a gap between what people believe is the maximum

speed and the actual designed maximum speed. The goal is to eliminate the gap between the actual speed and the

designed speed.

Significant losses from reduced speed operation are often neglected

or underestimated.



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A defect loss means that the equipment is producing products thatdo not fully meet the specified quality characteristics.

Defect losses include two major types of loss: scrap and rework,

and startup losses.

Defect Losses (Lost Quality)


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Scrap and Rework ()

Loss occurs when products do not meet quality specifications,even if they can be reworked to correct the problem.

The goal should be zero defects - to make the product right the first

time and every time.


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Startup Losses (,)

Startup losses are yield losses that occurwhen production is notimmediately stable at equipment startup, so the first products do

not meet specifications.

This is a latent loss, often accepted as inevitable, and it can be

surprisingly large.


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Most industries have some kind of gauge system on their equipmentthat measures quantities such as uptime, units produced, and

sometimes even the production speed.

These are appropriate things to look at if the focus is on whats

coming out of the machine.

Besides whats coming out of the machine, we also want to knowwhat could have come out, and where we are losing effectiveness.

OEE offers a simple but powerful measurement tool to get inside

information on what is actually happening.

OEE calculation is a metric that gives us daily information about

How effectively the machine is running andWhich of the six big losses we need to improve.

OEE is not the only indicatorto assess a production system,

but it is certainly very important if our goal is improvement.

OEE Metric


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OEE is a performance measurement comprised ofasset availability,production rate and quality levels.

Elements of OEE


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The three main categories ofequipment-related losses

Downtime

Speed loss

Defect or quality loss

Are also the main ingredients for determining the OEE.

OEE is calculated by combining three factors that reflect these

losses:

Availability rate

Performance rate Quality rate

Elements of OEE


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Availability rate is the time the equipment is reallyrunning, versus the time it could have been running.

A low availability rate reflects downtime losses:

Equipment failures

Setup and adjustments

Performance rate is the quantity produced during

the running time, versus the potential quantity, giventhe designed speed of the equipment.

A low performance rate reflects speed losses:

Idling and minor stoppages

Reduced speed operation

Quality rate is the amount of good products versus

the total amount of products produced.A low quality rate reflects defect losses:

Scrap and rework

Startup losses

Elements of OEE

Availability rate = Operating Time /

Planned Production Time

Performance rate = Ideal Cycle Time /

(Operating Time / Total Pieces)

= (Total Pieces / Operating Time) /

Ideal Run Rate

Quality rate = Good Pieces /

Total Pieces


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To calculate OEE, we multiply the three factors together:

OEE = Availability Rate xPerformance Rate xQuality Rate

Calculation of OEE

The diagram shows graphically

how the losses in availability,

performance, and quality work

together to reduce OEE of a machine.

The top bar, total operating time, shows

the total time a machine is available to

make a product.This is usually considered to be 480

minutes per 8-hour shift.


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Bars A and B show Availability

Bar A represents the net operating time, which is the time available

for production after subtracting planned downtime (no scheduled

production) such as a holiday, no orders, or no personnel.

Bar B shows the actual running time after subtracting downtime

losses such as equipment failures and setup and adjustments.

Bars C and D show Performance

Bar C represents the Target Output of the machine during the

running time, calculated at the designed speed of the machine.

Below it, a shorter fourth bar, D, represents the actual output,

reflecting speed losses such as minor stoppages and reduced

operating speed.

Calculation of OEE


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Bars E and F show Quality

As you can see, the actual output (E) is reduced by defect losses

such as scrap and startup losses, shown as the shaded portion of

bar F.

As this diagram shows, the bottom-line good output is only a

fraction of what it could be if losses in availability, performance,

and quality were reduced.

The diagram also suggests that to maximize effectiveness- to grow

the good output on the bottom line- you must reduce not only

quality losses, but also availability and performance losses.

The three factors work together, and the lowest percentage isusually the constraint that most needs addressing.

Calculation of OEE


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The table below contains hypothetical shift data, to be used for a

complete OEE calculation, starting with the calculation of the OEEfactors ofAvailability, Performance, and Quality.

Note that the same units of measurement (in this case minutes and

pieces) are consistently used throughout the calculations.

Example of OEE Calculation

Item Data

Shift Length 8 hours = 480 min.

Short Breaks 2 v 15 min. = 30 min.

Meal Break 1 v 30 min. = 30 min.

Down Time 47 minutes

Ideal Run Rate 60 pieces per minute

Total Pieces 19,271 pieces

Reject Pieces 423 pieces

Planned Production Time= [Shift Length - Breaks]

= [480 - 60] = 420 minutes

Operating Time

= [Planned Production Time - Down

Time]

= [420 - 47] = 373 minutes

Good Pieces

= [Total Pieces - Reject Pieces]

= [19,271 - 423] = 18,848 pieces


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Example of OEE Calculation

Availability = Operating Time / Planned Production Time

= 373 minutes / 420 minutes

= 0.8881 (88.81%)

Performance = (Total Pieces / Operating Time) / Ideal Run Rate

= (19,271 pieces / 373 minutes) / 60 pieces per minute= 0.8611 (86.11%)

Quality = Good Pieces / Total Pieces

= 18,848 / 19,271 pieces

= 0.9780 (97.80%)

OEE =Availability v Performance v Quality

= 0.8881 x 0.8611 x 0.9780

= 0.7479 (74.79%)


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World-Class Goal of OEE

In practice, generally accepted world-class goals for each factorare quite different from each other, as is shown in the table below.

Of course, every manufacturing plant is different.

Worldwide studies indicate that average OEE rate in manufacturing

plants is 60%.

As you can see from the table, a World Class OEE is considered tobe 85% or better.

There is room for improvement in most manufacturing plants

OEE Factor World Class

Availability 90.0%

Performance 95.0%

Quality 99.9%

Overall OEE 85.0%

www.oee.comCan you download the fast guide to OEE


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Goal of measuring OEE is to improve the effectiveness of yourequipment.

Since equipment effectiveness affects shop-floor employees more

than any other group, it is appropriate for them to be involved in

tracking OEE and in planning and implementing equipment

improvements to reduce lost effectiveness. Recommend that the operatorcollect the daily data about

the equipment for use in the OEE calculation.

Collecting this data will

Teach the operator about the equipment

Focus the operators attention on the losses

Grow a feeling of ownership of the equipment

Goal & Benefits of OEE Measurement


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The shift leaderorline manageris often the one who will

Receive the daily operating data from the operatorand

Process it to develop information about the OEE.

Working hands on with the data will;

Give the leader/managerbasic facts and figures on the equipment

Help the leader/managergive appropriate feedback to the operators

and others involved in equipment improvement

Allow the leaderto keep management informed about equipment

status and improvement results

Goal & Benefits of OEE Measurement


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Pukyong National University IntelligentMechanics Lab

www.oee.com www.lighthousesystems.com

www.idhammarsystems.com/product www.downtimecentral.com

www.oeeimpact.com

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