Tag: OEE Examples

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Weighted OEE: How To Calculate Total Plant OEE

In this post we will present a simple method to calculate a truly weighted OEE, including weighted factors Availability, Performance, and Quality.

The QUICK weighted OEE method:

Recalling our original definition of OEE, we are measuring how effectively our planned production time (net available time) is used to make a quality (saleable) product.  The weighted OEE then is the total time required to make a quality product divided by the total net available time.

From our examples in the “Calculating OEE” post, the following table summarizes the time required to produce quality products ONLY for machines A, B, and C:

  1. Machine A:  365 minutes
  2. Machine B:  318.75 minutes
  3. Machine C:  254.34 minutes

The total time to produce good quality (saleable) products is 938.09 minutes.

The total net available time for the three machines is 1365 minutes (3 * 455 minutes). 

The total weighted OEE for the 3 machines = 938.09 / 1365 = 68.72%

Calculating the Weighted Factors:

A similar process to the one described above can be applied to the individual factors.  It stands to reason that when the individual factors are multiplied together that we should get the same result.  We will use this to check our answer.

Weighted Availability:

Availability measures machine uptime efficiency.  The definition applied to an individual process also applies to the total of all the machines.  Availability is calculated using the formula:

Availability:  Net Operating Time / Net Available Time

From our examples in the “Calculating OEE” post, the following table summarizes the Net Operating Times for machines A, B, and C:

  1. Machine A:  423 minutes
  2. Machine B:  437 minutes
  3. Machine C:  433 minutes

The total Net Operating Time = 1293 minutes.

The total Net Available Time for the three machines is 1365 minutes (3 * 455 minutes). 

The weighted AVAILABILITY for the 3 machines = 1293 / 1365 = 94.73%

Weighted Performance:

Performance measures machine operating time efficiency when compared to the “ideal” cycle or operating time.  The definition applied to an individual process also applies to the total of all the machines.  Performance is calculated using the formula:

Performance:  Ideal Operating Time / Net Operating Time

From our examples in the “Calculating OEE” post, the following table summarizes the Ideal Operating Times for machines A, B, and C:

  1. Machine A:  373.33 minutes
  2. Machine B:  337.50 minutes
  3. Machine C:  267.17 minutes

The total Ideal Operating Time to produce ALL parts = 978 minutes.

The total Net Operating Time for the three machines is 1293 minutes (See Availability Calculations Above). 

The weighted PERFORMANCE for the 3 machines = 978 / 1293 = 75.64%

Weighted Quality:

Quality measures how efficiently the “ideal” operating time is used to produce quality (saleable) products.  Again, the definition applied to an individual process also applies to the total of all the machines.  Quality is calculated using the formula:

Quality:  Ideal Operating Time to Make Quality Parts / Ideal Operating Time

From our examples in the “Calculating OEE” post, the following table summarizes the Ideal Operating Time to produce Quality Parts ONLY for machines A, B, and C:

  1. Machine A:  365.00 minutes
  2. Machine B:  318.75 minutes
  3. Machine C:  254.34 minutes

The total Ideal Operating Time for Good Parts = 938.09 minutes.

The total Ideal Operating Time to produce ALL parts for the three machines is 978 minutes (See Performance Calculations Above). 

The weighted Quality for the 3 machines = 938.09 / 978.0 = 95.92%

Weighted OEE cross check:

Let’s compare the results.  From the calculations above, the results are summarized as follows:

  1. Weighted Availability:  94.73%
  2. Weighted Performance:  75.64%
  3. Weighted Quality:  95.92%

Now, we multiply the individual weighted OEE factors together:

OEE = 94.73% * 75.64% * 95.92% = 68.73%

You will see the result is the same as the Quick check introduced at the start of this post.

In our next post we will show you how to calculate the weighted factors for each individual process and introduce yet another way to confirm the weighted OEE calculation.

We have created a number of Excel spreadsheets that are immediately available for download from our FREE Downloads page or from the Free Downloads widget on the side bar.  These spreadsheets can be modified as required for your application.

If you have any questions, comments, concerns, or suggestions for a future topic, please forward them by e-mail to leanexecution@gmail.com  We look forward to hearing from you and trust this information will get you going.

Until Next Time, STAY Lean!

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How to Calculate OEE – The Real OEE Formula with Examples

Single-Minute Exchange of Die
Image via Wikipedia

A lot of time and effort can be wasted collecting data and analyzing the results.  Fortunately, Overall Equipment Effectiveness, or OEE, is one of those metrics that is easily calculated and can be applied to any process, department, or the entire organization.

We have created  a number of Excel spreadsheets that are immediately available from our FREE Downloads page or from the Free Downloads widget on the side bar.  These spreadsheets can be modified as required for your application.

OEE is comprised of three factors:  Availability, Performance, and Quality.  While calculating these factors is fairly straightforward, it is important to recognize that a standard industry definition for OEE does not exist.  It is important to understand the assumptions you are making to make sure that you understand the final OEE result.  This is increasingly more important when attempting to compare the results of one department or plant against the performance of another.

OEE measures how effectively TIME is used to produce a quality product.  We have established the following definitions of TIME to be used to calculate OEE:

  1. Scheduled Production Time or Planned Production Time
  2. Planned Down Time:  Scheduled down time events
  3. Unplanned Down Time:  Unscheduled down time events
  4. NAT = Net Available Time (Scheduled Production Time – Planned Down Time)
  5. NOT = Net Operating Time (Net Available Time – Unplanned Down Time)
  6. IOT = Ideal Operating Time (Time to Produce All Parts at Rate)
  7. LOT = Lost Operating Time Due to Production of Scrap or Non-Saleable Product.

Although we will provide examples of these calculations, the following formulas are used to calculate each of the OEE factors and overall OEE:

  1. Availability % = NOT / NAT * 100
  2. Performance % = IOT / NOT * 100
  3. Quality = (IOT – LOT) / IOT * 100
  4. OEE = Availability * Performance * Quality

You will notice that a quick way to check your OEE result is to calculate the time required to make good parts divided by the Net Available Time:

OEE = (IOT – LOT) / NAT

A word on Availability:

Availability is based on the actual “scheduled production time”.  Assuming a production process is scheduled to run over an 8 hour shift or 480 minutes (60 * 8), the following definitions are applied for planned and unplanned downtime.

Planned Downtime:

  1. Scheduled break times.
  2. Scheduled clean up at the end of the shift.
  3. Scheduled Preventive Maintenance.

Unplanned (Process/Equipment) Downtime:

  1. Setup / Tool Changes
  2. Material Changes
  3. Material Handling
  4. Quality Concerns
  5. Process Downtime
  6. Equipment Failures
  7. Personnel Relief

While it could be argued that setup or tool changes are planned events, they are considered part of the overall production process.  If tool change or set up events affect equipment or capacity utilization, then an effort to reduce these times will reflected by improved availability and an increase in available capacity.  It also makes capacity utilization much easier to calculate.  Again, knowing what is in the definition is important.  The purpose of establishing OEE is to drive improvement in your organization.  For example, Quick Die Change, or SMED, programs are specifically geared to improve the change over process.  If a separate program is used to manage the change over process, then you may so choose to leave this activity as a separate entity.

A word of caution! OEE is a metric, not a program.  Use existing systems and processes wherever possible to manage or support your OEE activities at launch.  New initiatives often fail because they are introduced in isolation and are often accompanied by “new ways” of doing business and tend to disrupt other existing work flows.  A true improvement or initiative that saves the company time and money will stand on its own merits.  This same initiative can be acted upon regardless of whether an “OEE Improvement Plan” exists.

I highly recommend reading Velocity: Combining Lean, Six Sigma and the Theory of Constraints to Achieve Breakthrough Performance – A Business Novel.  This engaging story exemplifies the challenges of integrating new initiatives into a company and how to overcome them.  This book ranks among the best with other books like The Goal.

Calculating OEE:  A real life example

An 8 hour shift is scheduled to produce three parts as shown in the schedule below.  The shift has two 10 minute breaks and a 5 minute clean up period.

Production Schedule:

  • M/C:  A   Part #:  A123, Cycle:  10 (seconds), Produced:  2240, SCRAP:  50, Unplanned Downtime:  32 minutes
  • M/C:  B   Part #:  B456, Cycle:  45 (seconds), Produced:  450, SCRAP:  25, Unplanned Downtime:  18 minutes
  • M/C:  C   Part #:  C789, Cycle:  70 (seconds), Produced:  229, SCRAP:  11, Unplanned Downtime:  22 minutes

Lets start by calculating our time factors for each machine:

Net Available Time:  Since each machine is scheduled to run for the full 8 hour shift, the Net Available Time for each machine is calculated as follows:

  1. Scheduled Time = 8 hours = 480 Minutes (8 * 60)
  2. Planned Down Time = 2 breaks * 10 minutes + clean up 5 minutes = 25 minutes
  3. Net Available Time (NAT) = 480 – 25 = 455 minutes

Machine A

  1. Unplanned Downtime = 32 minutes
  2. Net Operating Time (NOT) = Net Available Time – Unplanned Downtime
  3. NOT = 455 – 32 = 423 minutes
  4. Ideal Operating Time (IOT):  2240 total parts * 10 seconds = 22400 / 60 = 373.33 minutes
  5. Lost Operating Time (LOT):  50 scrap parts * 10 seconds = 500 / 60 = 8.33 minutes

Machine A:  OEE Factors are calculated as follows:

  1. Availability:  NOT / NAT = (423 / 455) * 100 = 92.97 %
  2. Performance:  IOT / NOT = (373.33 / 423 ) * 100 = 88.26%
  3. Quality:  (IOT – LOT) / IOT = (373.33 – 8.33) / 373.33 * 100 = 97.77%
  4. OEE = A * P * Q = 92.97% * 88.26% * 97.77% = 80.22%

We could also have calculated OEE using the Quick Check as shown below:

Time to produce good parts ONLY:  373.33 – 8.33 = 365

OEE = (IOT – LOT) / NAT = (373.33 – 8.33) / 455 * 100 = 80.22%

Using the same formulas as above the time factors for Machines B and C follow.

Machine B

  1. Unplanned Downtime = 18 minutes
  2. Net Operating Time (NOT) = Net Available Time – Unplanned Downtime
  3. NOT = 455 – 18 = 437 minutes
  4. Ideal Operating Time (IOT):  450 total parts * 45 seconds = 20250 / 60 = 337.5 minutes
  5. Lost Operating Time (LOT):  25 scrap parts * 45 seconds = 1125 / 60 = 18.75 minutes

Machine B:  OEE Factors are calculated as follows:

  1. Availability:  NOT / NAT = (437 / 455) * 100 = 96.04 %
  2. Performance:  IOT / NOT = (337.5 / 437 ) * 100 = 77.23%
  3. Quality:  (IOT – LOT) / IOT = (337.5 – 18.75) / 337.5 * 100 = 94.44%
  4. OEE = A * P * Q = 96.04% * 77.23% * 94.44% = 70.05%

We could also have calculated OEE using the Quick Check as shown below:

Time to produce good parts ONLY:  337.5 – 18.75 = 318.75

OEE = (IOT – LOT) / NAT = (337.5 – 18.75) / 455 * 100 = 70.05%

Machine C

  1. Unplanned Downtime = 22 minutes
  2. Net Operating Time (NOT) = Net Available Time – Unplanned Downtime
  3. NOT = 455 – 22 = 433 minutes
  4. Ideal Operating Time (IOT):  229 total parts * 70 seconds = 16030 / 60 = 267.17 minutes
  5. Lost Operating Time (LOT):  11 scrap parts * 70 seconds = 770 / 60 = 12.83 minutes

Machine C:  OEE Factors are calculated as follows:

  1. Availability:  NOT / NAT = (433 / 455) * 100 = 95.16 %
  2. Performance:  IOT / NOT = (267.17 / 433 ) * 100 = 61.70%
  3. Quality:  (IOT – LOT) / IOT = (267.17 – 12.83) / 267.17 * 100 = 95.20%
  4. OEE = A * P * Q = 95.16% * 61.70% * 95.20% = 55.90%

We could also have calculated OEE using the Quick Check as shown below:

Time to produce good parts ONLY = 267.17 – 12.83 = 254.34

OEE = (IOT – LOT) / NAT = (337.5 – 18.75) / 455 * 100 = 55.90%

Our next post will show you how to calculate a truly weighted OEE based on the examples given here.

Until Next Time – STAY Lean!

If you have any questions regarding this post or simply want more information, please feel free to send an email to leanexecution@gmail.com

Twitter: @Versalytics

OEE, Downtime, and TEEP

We have received several inquiries regarding equipment down time – periods of time when the machine is not scheduled to run.  We consider this to be scheduled down time or idle time and does not affect Overall Equipment Effectiveness (OEE), since no production was planned during this period.

OEE measures overall equipment effectiveness during planned production or SCHEDULED up time.  Do not confuse idle time with tooling or material change over as these activities should be part of the scheduled machine time – periods where the machine is not scheduled to run.  After hours or weekends are examples of idle time.

TEEP or Total Equipment Effectiveness Performance is another variable, similar to OEE, and measures the Total Equipment Effectiveness Performance based on calendar time – the total time the equipment is “present”.  If process “A” is in your plant for 24 hours a day, 7 days a week, then the total time required to make good parts is divided by the time the asset, process, or equipment is “present” and is therefore “technically available” for the time frame being considered.  Typically this is based on calendar time – 24 hours per day and 7 days per week.

Another way to view TEEP is to consider it as a measure of how effectively the total capacity of a process or machine is being utilized to make GOOD parts.  In short, TEEP could be defined as a measure of Equipment Capacity Utilization Effectiveness.

TEEP Calculation Example:

In the metal stamping business, raw coil steel is processed through a die that runs in a stamping press to manufacture the parts.  The ideal cycle time for may be 30 strokes (or parts) per minute.  While the press may be scheduled to run for 16 hours, it is technically “present” or available 24 hours.  If, in a given day, a total of 18,000 GOOD parts were produced over 16 hours of scheduled production time, the OEE is easily calculated.

We will first calculate the IDEAL hours required to produce 18,000 parts at 30 spm.  The IDEAL rate per hour is 1,800 parts (30 spm * 60 minutes  / hour).  Therefore the IDEAL time to produce 18,000 good parts is 10 hours (18,000 parts / 1,800 per hour).

If this is a two shift operation, the net available time is 16 hours (scheduled) and the OEE for the day is calculated as 10 / 16 = 62.5 %.

Since the press is always present, 24 hours per day – 7 days per week, the Daily Equipment Effectiveness Performance (DEEP) in this case is 10 / 24 = 41.7 %.  While this example only represents a single 24 hour day, the basis for calculation is the same.  If the time frame is one week, one month, one quarter, the Total Equipment Effectiveness Performance for that time frame is calculated using the following formula:

TEEP = Total IDEAL Time to Produce Good Parts / Total Gross Time Available

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.

Feel free to leave any comments or send your questions to LeanExecution@gmail.com

Until next time – STAY Lean!

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