We have explored Overall Equipment Efficiency (OEE) from several perspectives and how it can be used as an effective performance metric. The purpose of measuring and monitoring OEE, at a minimum, should be three fold:
- To ensure the current performance levels are sustained,
- To identify new opportunities for improvement,
- To assess the effectiveness of current improvement initiatives.
The Culture of Continuous Improvement and Innovation
A continuous improvement “mindset” must be part of the organizational culture to achieve maximum results. Too many companies charge the engineering department or some other “arm” of the organization to generate the ideas that can be implemented to improve availability, performance, and / or quality. We strongly urge you to include everyone in the improvement process, especially the very people who perform the tasks on a daily basis. Why? The simple answer is, “They are the eyes and ears of the process”.
Despite some of the old school thinking that may persist in industry, most people take pride in their work and want to do a good job. OEE is as much a performance metric for the individuals on the shop floor as it is for the management and leadership of the company. Even the most educated doctor will ask the patient what the symptoms are as part of the assessment process.
While it may be difficult to assess what level of improvement can be achieved, it has been suggested that world class OEE is 85%. We suggest that you establish a reasonable baseline and determine relative improvements accordingly. The baseline you use should be comprised of two key components:
- Historical data for OEE and each factor (Availability, Performance, and Quality)
- A detailed Standard Operating Procedure for each process under consideration
Getting Started – Collect and Communicate Data
Almost every continuous improvement (CI) activity or project is accompanied by a list of actions that must be implemented. Where does this list come from?
There are at least two very basic approaches to getting the improvement process underway:
- Collect and analyze data from the current process
- Set up a FLIP Chart at the line or machine
Step 1 should be fairly straightforward. The premise here is that OEE data is already being collected and analyzed on a regular basis. Step 2 may not be as familiar to you.
This is probably one of the most fundamental and basic data collection tools available on the market. This approach may seem overly simplistic but the objective is to keep it simple and effective.
- Data collection in “real time”
- Anyone can add to the List
- Anyone can update the List
- Readily Available to ALL
- Writing Skills ONLY
- Instant Feedback
- Highly Visible
What do we record on the FLIP chart? We have experienced the best success with the following simple format. At the top of the FLIP chart write down Today’s Date and Shift, then setup the following headings:
Time Problem/Concern Assigned To Task Completed By (Initials)
Any time an event occurs or an opportunity arises for improvement, simply enter the appropriate data under the headings shown. The flip chart can also be used to track progress – INSTANTLY. Whenever a task is completed, the person responsible for the “fix” simply enters the time / date and their initials.
FLIP Chart – Built in Accountability
Using the flip chart as a living “action item list” introduces accountability from all levels to the process on the shop floor. As tasks or actions are completed, everyone will see that the concerns are being addressed causing the improvement cycle to continue and reinforcing the value of everyone’s input to the process.
Our experience has shown the FLIP chart to be one of the most engaging improvement processes on a continuing basis. Improvement history is readily available on the shop floor. No complex searches, computer programs, or advanced skill set is required to see what is going on and what is being done about it. As much as we don’t like to put problems on display, you may be surprised how impressed your customers are with this type of interactive CI process.
The FLIP chart is a very primitive but effective tool for collecting data and communicating results.
Since OEE is comprised of three elements, it stands to reason that at least three major improvement initiatives exist: Availability, Performance, and Quality. How do we go about improving these elements?
Availability: Start with a downtime assessment:
- Categorize Events (Planned vs. Unplanned)
- Frequency / Occurrence Rate
- Type: Planned, Preventable, Predictable, Unplanned, Unknown
From our previous discussions on Availability, the known “Planned” events may include such change events as materials, tooling, and personnel (shift changes and / or breaks). Improving availability requires the elimination of UNPLANNED events and reducing the duration of PLANNED events. Successful improvements can only be developed and achieved if there is integrity in the baseline information and data.
Implementing SMED (single minute exchange of dies) is one strategy to reduce the duration of die changes. A detailed die change process is used to determine the activities that can be performed while the machine is still running (External Events) and those that can only be performed while the machine is down (Internal Events). Further assessments are conducted to determine what improvements are possible to reduce the duration of the internal events. Such improvements may include hydraulic clamping, quarter turn screws, standardized shut heights, standardized locating pins, standardized pass heights to name a few.
Scheduling sequences may also be an important factor in the change over process. If a common material (type or color) is used for two different parts, it may be more effective to run them back to back through the same machine. Tooling may be shared among different part numbers and would require less change over time if they were considered as a product family for scheduling purposes.
Policy changes and capital investments are easily justified when you are able to demonstrate the improvements using a “plan vs actual” strategy that is complimented by data and a standard operating procedure.
Performance: Improving performance is not to be confused with reducing the process time (making it faster). They are two different activities entirely. If the original cycle time or process rate was calculated correctly, then 100% performance should be achievable right? Once again, the answer to this question depends on company policy and the method that was used to establish the standard.
Our purpose is not to introduce more confusion, but rather, to make sure that whatever policy is in place is clearly defined and understood. Remember, the only real industry standard for OEE is the formula used to calculate the result: A x P x Q. A standard definition or criteria for determining the individual factors does not exist.
The cycle time for an automated process can easily be determined by measuring the output without disruption over a known period of time. Is this consistent with company policy? Is the standard cycle time based on the stated nameplate capacity (rate) or is it based on the actual achieved (optimum) cycle time?
A “button to button” cycle time may be established for a manual operation in a similar manner. Although it may be perceived as a flaw, the button to button analysis may not necessarily consider container changes or restocking of components that may be required from time to time. If these “other” tasks are not factored into the cycle time, then it would be impossible to achieve 100% performance unless someone other than the operator was made responsible for those activities.
Start with a Performance Assessment
- Confirm company policy and methods for calculating the cycle time.
- Confirm the Cycle Time or Production Rate (Time Study)
- Compare the Actual versus Standard Operating Procedure
- Review the process performance history and data records.
- Equipment Condition Assessment – Preventive Maintenance
- Process Type: Automation, Semi-Automation, Manual (Human Effort)
- Confirm Reporting Integrity
Only after you have reviewed the data and discussed the opportunities with the team will you be able to develop a performance improvement plan.
Using the “button to button” manual process described above, we already indicated that a person other than the operator could be responsible for restocking components and changing containers to allow the operator to run the machine without interruption. There may be other activities as well that could be performed someone other than the operator. A detailed Standard Operating Procedure complete with clearly defined steps (step tasks) and timing for each is the best tool available to improve performance.
Is it possible to change the method or sequence of events that the operator is following to reduce the time taken to perform a step task. Is the operation “handed”, in other words, does it favor right versus left handed people? Is the material arranged in such a way as to optimize (minimize) the operator’s movements during the cycle? Are all operator’s performing the step tasks per the standard operating procedure? Is the machine itself performing at the optimized cycle or is it running at a slower speed due to electrical, mechanical, or fluid faults?
Some of the activities identified may result in speed increases that will lead to performance improvements relative to the current standard. Again, company policy should dictate when and how standards are to be updated. If the standard is updated everytime the cycle time is reduced, how will you recognize the improvement? We would recommend resetting the standards annually in conjunction with the new fiscal year. The new performance levels should also be reflected in the business plan.
Quality: This is perhaps one of the easiest to factors to define and may be one of the more difficult factors to improve. Again this will depend on the definition or criteria used to calculate the Quality factor. The typical definition adopted by most manufacturers states that any parts failing to meet First Time Through quality criteria include those designated as scrap, test, rework, sort, and / or hold. In other words, First Time Through quality applies only to those parts that are considered acceptable at the point and time of production.
When do you start counting? Should set up parts be included in the Quality definition? We would argue against including set up parts in the quality calculation, however, that doesn’t mean they shouldn’t be accounted for because the material loss is a real cost to the company. We would define set up time as starting from the last good part produced to the first good part produced for the next job in.
The objective of any Quality improvement strategy is obviously zero defects. The task is getting it done.
Quality: Start with a Quality Assessment:
- Review Process Failure Modes Effects and Analysis (PFMEA)
- Review Current Quality Control Plans (Inspection Requirements)
- Review and Analyze Quality Performance Data
- Review scrap and rework analysis
- Identify Top Opportunities (Pareto Analysis)
- Initiate Problem Solving Activities (DMAIC, PDCA, PDSA, IDEA Loops)
- Execute problem solving strategy
- Update Lessons Learned and Best Practices
The ultimate goal for any quality program is to achieve a level of zero defects. A second, closely related goal is to eliminate, reduce, and control variation in our processes. Variation and defects are directly correlated and are typically quantified by statistical modeling tools such as the normal distribution or bell curve. Many tools are available to study and analyze the various attributes of a process to effectively determine the root cause for a given defect.
Some of the many problem solving methods and tools include 8-Discipline Analysis, 5 Why, Fault Tree Analysis, Cause and Effect Diagrams, Pareto Analysis, Design of Experiments (DOE), Analysis of Variance (ANOVA) tools among others.
We have identified the various methods to generate improvement activities. The key to success is developing the action plans and executing them in a timely manner. This is the critical part of the improvement process.
A word of caution: Don’t confuse activity with action. Too many times, the data collection and study processes consume all the resources and more time is spent on data presentation than real analysis. The goal is to improve the process, solve the problems, and eliminate the defects.
No Input Change = No Output Change
Lessons Learned and Best Practices
It is possible that the wrong process was selected for the product being manufactured. This may range from the actual tooling to the very equipment that is used to run it. It is also possible that the capability of the machine was overstated or over-rated prior to purchase.
Maintaining a lessons learned database is one way to make sure that we don’t make the same mistake twice. It can also serve as a future reference when developing standards for future products or processes.
Perhaps a product or process requires a technology that simply doesn’t exist. Could this be the stepping stone for a future research and development project? How do we take things to the next level – the break through?
Until next time – STAY lean!
Please feel free to forward your questions or comments to us by e-mail at LeanExecution@gmail.com
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