Tag: Flexible Manufacturing

OEE in the Automotive Industry

The automotive industry appears to be rebounding at a faster rate than most (if not all) experts may have anticipated.  Many OEM’s and their suppliers are attempting to boost production to replenish inventories and support renewed demand for their products.  Reduced inventories throughout the supply chain are creating demand that is difficult to replenish at the rate required.  Short runs to bootstrap the “pipeline” are taking their toll on OEE rates but also provide the opportunity to identify new improvement initiatives.

General Motors and Toyota have both announced that increased demand for their product is anticipated for the next few months.  The increases are exciting for all involved, however, the ramp up to recovery may be more painful to achieve for some.  How is your company performing?  Those with fixed “cells” or processes may not be experiencing the same degree of frustration as those having flexible processes running multiple part numbers.

Overall Equipment Effectiveness (OEE) typically suffers during these times due to the frequent changeovers and short volume runs.  If there was a time when you can’t change over or setup and run fast enough, this may be it.  Hang on and enjoy the ride.

Until Next Time – STAY lean!

Advertisements

OEE: Take the Hit

The simplicity of measuring and calculating OEE is compounded by the factors that ultimately influence the end result.  Because the concept of OEE can be readily embraced by most employees, it is easy for many people to get involved in the process of making improvements.

Unfortunately the variables involved with OEE, like those of many other measurement systems, fall under scrutiny.  The goal of achieving yet even higher OEE numbers is met with yet another review of the factors and how they are treated.  Usually the scope of this often heated discussion is focused on Availability.

The greatest task of all occurs when attempting to classify what qualifies as planned versus unplanned downtime.  Availability is the primary factor where significant improvements can be realized and is most certainly the focus of every TPM program in existence.  However, another significant factor that can greatly impact Availability is setup time.

We still receive questions and comments from our readers regarding setup time and whether or not they should “take the hit” for it.  We have met up with different rationale and reasoning to exclude setup time from the availability factor such as:  “We have all kinds of capacity and do the setups in our free time.” Or, “We do the setups on the off shift so the equipment is always ready when the first shift comes in.”

Regardless of the rationale, our short answer to the question of inclusion for setup time remains a simple, “Yes, take the hit.”  Before we get to much further let’s define what it is.  Setup time is typically defined as the time required to change or setup the next process.  The duration of time is measured from the last good part produced to the first good part produced from the new process.

Improving setup times provides for shorter runs, reduced inventories, increased available capacity, increased responsiveness, improved maintenance, and in turn, improved quality.  Shorter runs also provide the opportunity to maintain tools more effectively between runs as they are not as subject to excessive wear caused by longer run times and higher production levels.

Setup and Quick Die Change / Quick Tool Change

An exhaustive amount of work has been completed in many manufacturing disciplines to reduce and improve setup times.  Certainly, by simply ignoring the setup time, there is no real way to determine whether the new methods are having an impact unless another measurement system for setup is introduced.  We already have a measurement system in place, so why invent another one?

Quick Die Change and other Quick Tool Change strategies are common place in industries such as automotive stamping plants.  The objectives for Quick Die Change are attributed to LEAN principles such as single part flow and reduced inventories.  The benefits of these efforts, of course, extend to OEE and availability.

Setup and Production Sequencing

To exemplify the effect of sequencing and setup, consider a single tool that makes 8 variations of a product.  For the sake of discussion, let’s assume the only difference is the number of holes punched into the part.  The time for each punch removed from, or added to, the tool is the same.

The objective for scheduling this tool is quite obvious.  We need to minimize the number of punch changes to minimize the downtime.  If the parts required range from 1 hole to 8 holes, and we need 100 parts of each variant, we would arrange the schedule in such a manner as to make sure we are only adding one punch to the tool as we move on to the next variant.

In this case, setup time and sequencing are clearly a cause for concern and consideration.  Secondly, it is much easier to calculate the time required to run all the parts and how much capacity is required.  Including setup in the OEE factor also simplifies the calculation of overall capacity utilization for the piece of equipment in general.

In Conclusion

As we have stated in previous posts, the objective of measuring OEE is to identify opportunities for improvement.  Achieving higher numbers through the process of debate and elimating elements for consideration is not making improvements.  Don’t masquerade the problem or the opportunities. 

Setup is certainly one area where improvements can be measured and quantified.  Availability and OEE results provide an opportunity to demonstrate the effectiveness of these improvements accordingly.

If the leadership of the company is setting policy then the explanations for performance in this regard should be understood.  The only numbers that really matter are on the bottom line and hopefully they are black.

We would also encourage you to visit two of our recent posts, Improving OEE – A hands on approach (posted 03-Jan-09) and OEE and Availability, (posted 31-Dec-2008).

Until next time, stay LEAN.

OEE and LEAN

Incorporating and tracking performance using Lean metrics doesn’t make a company Lean any more than tracking weight puts you on a diet.  Measurements are like decisions, nothing changes unless actions are taken.

How does this apply to OEE?  How does OEE apply to LEAN?  As we’ve mentioned in previous posts, many companies invest a significant amount of time, money, and effort to develop exorbitant OEE data collection systems.  Data collection and analysis methods are in place, improvement / action plans are developed and executed, and the measurement cycle continues.

To some, this process may appear to be correct.  More formally, a Plan-Do-Check-Act (PDCA) or Define-Measure-Analyze-Improve-Control (DMAIC) process improvement methodology may be used.  So what is wrong with this picture?

OEE Improvements are RELATIVE

OEE does not distinguish between poorly designed and well designed processes.  A poorly designed process may have significant flow constraints and excessive labour but still yield a high OEE index.  The reason for this is simple, the base line or process standards are based on the current known process.  Standard cycle times and quality expectations are based on the current “achievable” performance standards that the process can provide.

Changes to the current process, rates, and quality levels will be reflected in the OEE index.  However, LEAN is not necessarily concerned with effective asset utilization.  The focus of LEAN is to increase or optimize the value added to the product or service being provided while reducing the time required to achieve it.

Implementing OEE is not LEAN

Racing cars and regular street cars may each perform at 100% of their optimum performance levels but clearly they could not compete in a race against each other.  From a LEAN perspective, the racing car will certainly out-perform a regular street car in a head-t0-head speed contest.

Similarly, OEE can provide insight into the performance of the current process, however, it does not provide an indication of how LEAN the process actually is.  A process that is plagued with multiple stations and inherent Work In Progress inventory will never compete against a properly balanced single piece flow process.

The OEE index for any group of processes may be above 85% as defined by design, it doesn’t mean they are equally lean.  Lean should aspire us to achieve a 100% value added process, safely producing the highest quality product in the shortest amount of time.  Although this could never be achieved in the today’s manufacturing environment, VALUE STREAM mapping is the technique used to evaluate our current capabilities in this regard and to determine what a lean future state process could achieve.

So why measure OEE?

OEE measures how effectively an asset or group of assets is being utilized as defined or described by the current standards and process constraints.  Of course, we want to make sure that we are utilizing our assets effectively.  The message here is simple.  Don’t confuse effectiveness with efficiency – they are not the same.

Even efficiency can mean different things to different people.  As we’ve mentioned in previous posts, understand WHAT you are measuring and WHY.  Metrics don’t make a company LEAN although many can help you achieve increasing levels of LEAN.

OEE is an excellent tool to help manage and improve our processes and even more so when the process is optimized using LEAN principles.

The next time someone says they are going LEAN, listen closely.  Usually the statement is met with the typical, “We did 5S and we’re working to improve our OEE.”  The real LEAN practitioner may just share the plan to reduce the cash to cash time and increase or improve the percentage of Value Added activity.

Until Next Time – Stay LEAN

Upcoming OEE Topics – February 2009

The following topics will be featured in an upcoming post, we’ll try to squeeze them in before February 2009 rolls off the calendar.  If you have a topic that you would like to see featured on our site, send an e-mail to LeanExecution@gmail.com.

Capacity Planning with OEE:  By definition, it only makes sense to use OEE as an integral part of your capacity planning process.  We will cover the details to do this effectively.  Effective capacity planning naturally extends to improved resource management and effective production planning.

OEE, Value Streams, and COST:  Although some managers may rise to the challenge and volunteer, many are either assigned or designated to be project champions.  In many cases, unfortunately, the scope of the project is extremely limited or restricted and project managers simply become “metric managers”.  Who is in charge of OEE?  The answer is quite simple:  EVERYONE.  OEE is a multi-discipline metric and, like other sound lean strategies, requires seamless interaction among managers and departments.

OEE cannot and should not be managed as an independent metric.  Having said that, don’t get caught in the trap of “stand alone” OEE reviews.  While there may be a number of strategies for improving OEE, such as constrained capacity, we will present a model that explicitly ties operational costs to your processes.  When OEE data is sensitised by cost data, a completely different strategy for improvement will emerge.  If the ultimate goal is to improve your bottom line, then our Cost sensitisation model will bring the concept of OEE and your bottom line to a whole new level.

OEE and Lean Agility:  Can OEE be a leading indicator of your ability to respond to change?  Well we think so and happen to have a few ideas that will show you how and why.

Send us your questions or comments or simply suggest a topic for a future post or article.

Stay tuned for more!  We appreciate your feedback.

OEE for Multiple Parts – Single Machine (Multipart Processes)

How to Calculate OEE for Single Machine and Multiple Parts.

Flexible manufacturing provides the advantage of producing many different parts on the same piece of equipment.  The same is true for processes such as stamping presses, molding machines, or machining operations.

The first question most often asked is, “How do we calculate OEE for a piece of equipment that is capable of manufacturing multiple parts?”  The overall OEE for a stamping press, molding machine, machining process, or other “multipart” process is easily calculated using the same formulas presented in our previous posts “How to Calculate OEE” and “Practical OEE“.

We presented three machines running at various rates and producing unique products.  We demonstrated how to calculate the OEE for each part individually and for all parts collectively.  The machines A, B, and C could very easily be parts A, B, and C running on one machine.  The application of the OEE formulas presented for these three machines is the same for multiple parts running on the same machine.

We have prepared two Excel spreadsheets that demonstrate how to calculate OEE for a single machine that produces multiple parts.  We have also created a separate Excel spreadsheet that will show you how to calculate OEE for Multiple Departments and Multiple Machines running Multiple Parts.

Calculating OEE for any period of time, department, or group of equipment is a simple task.  With the understanding that OEE measures how effectively Net Available Time is used to produce good parts at the ideal rate, the formula for any OEE calculation follows:

OEE (Any Category) = Total SUM of IDEAL Time / Total SUM of NET Available Time

Once this basic premise for OEE calculations is clearly understood, any combination of OEE summaries can be prepared including OEE summaries by Shift, Operator, Manager, Division, Process, and Process Type.

FREE Downloads 

We are currently offering our Excel OEE Spreadsheet Templates and example files at no charge.  You can download our files from the ORANGE BOX on the sidebar titled “FREE DOWNLOADS” or click on the FREE Downloads Page.  These files can be used as is and can be easily modified to suit many different manufacturing processes.  There are no hidden files, formulas, or macros and no obligations for the services provided here.

Multipart OEE – Confronting the Challenges

Most manufacturing environments are challenged with the task of minimizing inventories requiring more frequent change-overs or setups.  By far, the greatest challenge of multipart equipment is managing the change-over process and is usually reflected in the OEE Availability factor.

We recommend including setup or change-over time as part of the unplanned downtime calculation.  Then, by definition, one method to improve Availability is to reduce change-over or setup time.  Reductions in change-over time will also be reflected by improved Availability.  The Availability factor is now a useful metric for tracking improvements.

According to our definition, change-over time or setup time is measured from the end of the current production run (“the last good part made”) to the start of the next production run (“first good part produced”).  We have worked with some manufacturers that decided to do change-overs on the off shift so that they could avoid the down time penalty.  They clearly didn’t get the point – deferring the time when the change-over is performed doesn’t change the time required to perform it.

Several programs such as SMED (single minute exchange of dies) are available and, when coupled with best practices for quick die change (QDC) or quick tool change techniques, can greatly reduce the time lost during your tool change events.

We will consider posting best practices for SMED or QDC and would welcome any reader comments in this area.

We always welcome your feedback and comments.  Feel free to send us your questions or comments to leanexecution@gmail.com

Until Next Time – STAY Lean!

"Click"