Tag: OEE

Happy Anniversary

Happy Anniversary

It’s hard to believe that today marks our 7th anniversary.  I still remember writing that first post and wondering who would be interested in what we had to offer.

After more than 293,000 views, thousands of free downloads, and visitors from more than 120 countries, we can say that we’ve successfully helped more than a few people and companies get started with their OEE training and implementation.

We would like to thank all of our subscribers and visitors for your feedback, support, and many “thank you” notes over the years.

Your feedback matters

If you have any comments, questions, or topics you would like us to address, please feel free to leave your comment in the space below or email us at feedback@leanexecution.ca or feedback@versalytics.com.  We look forward to hearing from you and thank you for visiting.

Until Next Time – STAY lean

Versalytics >> Analytics
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OEE – Reporting Live Part 1

How do you report Overall Equipment Effectiveness?

The next greatest challenge after learning how to calculate Overall Equipment Effectiveness (OEE) is reporting it.  This is often a topic of great debate and likely a reason why so many avoid discussing it at all.

Note that we have prepared several Excel spreadsheets to help you get started and they are available free of charge from our downloads page.

The question is, “What do we report?”  Some will argue that you can’t compare OEE between plants, departments, shifts, or processes. While we tend to agree with them in some respects, there is relevance to understanding the differences in the results.  In a comparative context, we would also add that we never intended to use OEE as competing metric, rather …

Our objective is to continually improve OEE over time.

Our objective is to provide a report that calculates OEE for multiple parts and processes such that a “summary OEE” can be determined from any combination of factors included in our production report.

Our report can be further extended to include other factors derived from the reporting system itself.

How to Report OEE

While technologies exist that offer instantaneous OEE reporting on the shop floor, they do little to help you in the boardroom.  Over the next few posts, we will create a relatively simple reporting structure using Excel as our development platform.

Before we get started with our spreadsheet, lets first understand what data we need to collect.  We can then decide what elements to add to our spreadsheet accordingly.

Data Collection

We need a method for collecting the minimum amount of data that will satisfy our requirement to establish a robust OEE reporting system.  For now we will consider collecting the following data using a very simple production shift report::

  • Date
  • Shift
  • Employee (Name / Number)
  • Start Time
  • Finish Time
  • Part Number
  • Work Order (Job Number)
  • Sequence (Step Number)
  • Work Center (Machine)
  • Quantity Good
  • Quantity Scrap

This basic report can easily be enhanced by adding columns for setup, material changes, breaks, or other events to better understand what transpired over the course of a given shift.  We recommend keeping it short and simple.  Only add more rigorous reporting requirements as needed and if the results demand it.  A simple format encourages people to complete the forms more readily.

Reporting OEE

In our next post, we will introduce a spreadsheet where we can input our data and generate our OEE report.  Our spreadsheet will allow you to calculate OEE for any combination of the above data entries.

Until Next Time – STAY lean!

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On Target Tangents

Time Tangents

Our world is full of distractions and we often find ourselves on a path that seems so distant from our original plan. We wonder where the time went and ask ourselves …

“How Did We Get There From Here?”

Are tangents disruptive impulses that take our eyes off of the goal, causing us to lose focus, and drain away our valuable time? Or, do we embrace them as an extension of “how we think” and seize the opportunity to expand the scope of our original thought processes.  Our desire to learn fuels our passion to …

Explore New Options

Some time ago we expressed our interest in learning the C++ programming language.  C++ is an amazing language and we have gained a real appreciation for object oriented programming.  While learning C++, we discovered that another very powerful language, Python, was written in C++.

Naturally, we decided to check out Python to see the power of C++ in action.  To our surprise, we learned that Python is readily available at no charge from https://python.org, is very powerful, and is an extremely versatile Object Oriented Programming language.  Python is also relatively easy to learn and is now our language of choice for rapid prototyping and development of complex solutions.

Today we discovered yet another language:  “Go”.  Coincidentally, we stumbled upon a post at TechCrunch.com titled, “Google’s Go:  A New Programming Language That’s Python Meets C++”.  We downloaded “Go” from GoLang.org to explore what this language brings to the table.

We’re committed to continue learning C++, however, we would be remiss if we decided to simply stick to the straight and narrow path of one language alone.  Where speed of execution is a factor, C++ prevails.  Where speed of execution, small size, and a “close to the metal” solution is required, Assembler takes precedent. However, where speed is less of a concern, a solution in Python is heavily favoured.  As we’ve stated many times before:

“There’s always a better way and more than one solution.” ~ Redge

When Opportunity Knocks … Answer

It would be easy to ignore the distractions that seem to stall our progress and keep us from reaching our destination, however, sometimes the journey is best enjoyed when we stop and take in the sights along the way.  In this case, the ride has been an eye opening experience.

Although we started our learning process with Python 2.7.6, we’re currently using Python 3.4.1.  Python is available and runs across the three platforms that concern us most:  Windows, OSX, and LINUX.  Soon after, we also downloaded Anaconda Python from Continuum Analytics.  The reasons for downloading Anaconda Python will become clear once you’ve had a chance to delve into the world of Python and all it has to offer.

Though we may have strayed from our C++ learning process for a short while, the Python experience has been and continues to be a tremendous journey.  Python has presented a realm of significant possibilities in Object Oriented Programming that would otherwise have remained a mystery.

Learning Python

A simple Google search for “Python Programming” will yield a host of web sites that offer tutorials, books, and so much more.  We started with a few simple books and added a few more that we purchased from our local book store to gain a sense of what Python had to offer:

The number of books available on the store shelves pales in comparison to the offerings available on Amazon.  We have since purchased a number of e-books that are easily and readily accessible using Kindle across multiple devices including my iPad and Surface Pro.  If you haven’t had a chance to work with Kindle, we highly recommend it.  It is an excellent app that makes reading e-books a breeze.

Unlocking Potential

Certainly this recent tangent has opened more doors than we could ever have imagined and we’re grateful for the experience.  While this may seem to have little to do with Lean or OEE, we would suggest otherwise.  Each program or script is comprised of multiple processes or series of processes and the environments in which they run are as diverse as the machines we find in manufacturing operations.  From our perspective, programming serves as an excellent surrogate to demonstrate lean practices and the effectiveness of our operations.

Just when you think you have all the answers, consider that one of them may hold more questions than you ever imagined.

Your feedback matters

If you have any comments, questions, or topics you would like us to address, please feel free to leave your comment in the space below or email us at feedback@leanexecution.ca or feedback@versalytics.com.  We look forward to hearing from you and thank you for visiting.

Until Next Time – STAY lean

Versalytics Associates

Its not what you know …

It’s not what you know but what you understand that matters most.  ~ Redge

Discerning  perceived knowledge from understanding is a challenge for many leaders. For example, it is possible for anyone to memorize facts and figures and to correctly answer related questions simply by recalling this same information from memory. Similarly, many of us “perform” simple multiplication from recall – without even thinking about the calculations involved.

Why this matters

Having knowledge of metrics is not necessarily the same as understanding what the metric is measuring or what it means. Consider that the formula for Overall Equipment Effectiveness, or OEE, is the product of three factors:  Availability, Performance, and Quality. After basic training, anyone can recite the formula and calculate OEE correctly. This basic knowledge does not necessarily equate to any real level of understanding what is actually being measured.

OEE measures how effectively an asset’s time was used to produce a quality part. Confusion as to what is really being measured typically occurs when the Quality factor is calculated. For a single run, numerous texts teach that we can calculate the quality factor as:

Quality Factor = (Good Parts Produced / Total Parts Produced) x 100.

While the calculation will yield the correct result for a single instance, the formula isn’t quite complete as presented and doesn’t work when attempting to calculate OEE for multiple parts running through the same machine. The Quality formula should actually be stated as:

Quality Factor = (Good Parts Produced x Cycle Time / Total Parts Produced x Cycle Time)

or

Quality Factor = Pure Time to Produce Good Parts / Pure Time to Produce ALL Parts.

When expressed this way, we can state how much time was spent producing good parts, total parts, and defective parts! The time lost to produce defective or scrap parts is given by the formula:

Lost Quality Time = Time to Produce ALL parts – Time to Produce Good Parts.

OEE is not complicated when we understand what it is we’re measuring. By way of example, assume a production shift consists of 435 minutes of scheduled production time where breaks and lunches have already been accounted for. For the sake of simplicity, we will assume the process is running at rate (performance = 100%).  A part having a cycle time of 2 minutes was scheduled to run for the entire shift where 160 good parts from a total of 180 parts were produced.

From this basic data and assuming the process was running at rate – (Performance = 100%) – we can derive the following:

Availability = Up Time / Total Time = ((180 x 2) / 435) x 100 = (360 / 435) x 100 = 82.76%

Performance = 100% (assuming run at rate) = 100%

Quality =Time to Produce Good Parts / Time to Produce ALL Parts

Quality = ((160 x 2) / (180 x 2)) x 100 = (320 / 360) x 100 =  88.89%

OEE = A x P x Q = 82.76% x 100% x 88.89% = 73.56%

Cross Check:  435 x OEE = 435 x 73.56% = 320

Before calculating the percent values for each factor, we can see that time is common to all factors. We can readily determine that we lost 40 minutes due to the production of defective parts (360 -320) and that we also lost 75 minutes due to unplanned downtime events.

To calculate OEE for a given machine, shift, department, or plant we can easily sum the total “time” based values for each factor and calculating the percentages accordingly.  These calculations are clearly conveyed in prior posts and in our free downloads (see our free downloads page or on the widget on the sidebar).

What you know is taught, what you understand is learned. ~ Redge

When we truly understand what is being measured, the data that forms the basis for our calculations becomes more meaningful too. We can even challenge the data before the calculations are made.  The greatest frustration occurs when the results are not what we expected and the reasons are either in the very data that generated them or worse, when someone doesn’t understand the calculation they’re actually performing.

Many years ago I recall reading a sign that stated, “The proof of wisdom is in the results“. While their is truth in this statement, the implication is that we understand the results too!

Your feedback matters

If you have any comments, questions, or topics you would like us to address, please feel free to leave your comment in the space below or email us at feedback@leanexecution.ca or feedback@versalytics.com.  We look forward to hearing from you and thank you for visiting.

Until Next Time – STAY lean

Versalytics Analytics

Time Flies When You’re Having Fun

English: John leading Lean and Mean
English: John leading Lean and Mean (Photo credit: Wikipedia)

It’s hard to believe that four years have passed since we started blogging here on WordPress! We would like to thank our many subscribers and visitors for your many e-mails and comments, making this a fulfilling learning experience for all of us.

This blog was originally founded on the premise that very little information was available on the topic of Overall Equipment Effectiveness (OEE) with the exception of the most basic formula and it’s application for single machine operations. We advanced the application of OEE over numerous posts to include multiple machines, parts, shifts, divisions, and even corporate level reporting. We have also maintained that the intent of OEE is to serve as a tool to drive continuous improvements in your operations.

When integrated correctly, OEE provides feedback to operations management that enables further improvements to occur. From this perspective, leadership that empowers employees to implement improvements is a pre-requisite for manufacturing operations wanting to gain the most from their OEE initiative. In this regard, leadership recognizes and embraces lean thinking and instills lean principles throughout the organization. Where lean serves as the overarching strategy, OEE is an integral key performance indicator (KPI) that enables continuous improvements to occur.

We recognized that our initial offerings would serve and be of interest to a niche audience, however, after four years it is exciting to see that we have received more than 100,000 visitors from over 150 countries. The top 10 countries driving visits to our site – to date – are:

Country  Rank
United States FlagUnited States      1
India FlagIndia      2
United Kingdom FlagUnited Kingdom      3
Canada FlagCanada      4
Malaysia FlagMalaysia      5
Australia FlagAustralia      6
Germany FlagGermany      7
Philippines FlagPhilippines      8
Mexico FlagMexico      9
Brazil FlagBrazil     10

We are thankful for the feedback we have received and for the many people who have taken the time to express their thoughts and share their gratitude either in the comments or by the many e-mails we have received from around the world. Social media have certainly played a role in expanding our scope and our reach. We look forward to continuing our journey with you.

“Our goal is to deliver the highest quality product or service in the shortest amount of time at competitive prices on time and in full.”

“There’s always a better way and more than one solution”

“What you see is how we think”

Thanks again for reading and, to our US friends, have a Happy Thanksgiving!

Until Next Time – STAY lean

Vergence Analytics

Game On – Playing it Safe with Lean

An astronaut in training for an extra-vehicula...
Image via Wikipedia

Communicating a concept or methodology in a manner that doesn’t offend the current status quo is likely the biggest challenge we face as lean practitioners and consultants.  In all too many instances it seems that people are open to change as long as someone else is doing the changing.

To diffuse opposition and resistance to change, it is essential that everyone understands the concern or problem, the solution, inherent expectations, and consequences of remaining the same. Our objective then is to create a safe, non-threatening environment where new ideas and concepts can be explored without undermining the current infrastructure or the people and departments involved.  There are a number of options available to do just that:

  • I personally like to use analogies and stories to convey concepts or ideas that exemplify methods or processes that can be adapted to address a current situation, opportunity, or concern.
    • This is ideal for sharing the company vision, top-level ideas, and philosophies that help to explain the overall strategic direction or mission under discussion or of concern. 
    • Stories and analogies create opportunities to expand our thinking processes  and to look outside the immediate scope of our current business interests and circumstances.
  • I also recommend targeted books and selected reading that allow individuals to learn and understand at their own pace. Classics books include “The Goal” by Eliyahu Goldratt and Jeff Cox, “Velocity” by Dee Jacob, Suzan Bergland, and Jeff Cox , “Toyota Kata” by Mike Rother, and The High Velocity Edge by Steven Spear.
    • Offering a list of recommended books for individual study is likely the least intrusive, however, participation cannot be assured and does not promote interaction among team members.
    • The reader learns the thinking processes and solutions as developed by the authors. 
  • Formal classroom or in-house training may also be effective, however, it can be costly and is inherently exclusive to the participants.  It is also difficult for non-participants to become as knowledgeable or proficient with the material without attending the course or training for themselves.
    • Outside training is inherently more generic in nature due to the diverse range of companies and individuals that are represented in the class.
    • In-house training can be more effective to address a specific concern, however, it’s true effectiveness is limited to the participants.
    • The concepts and thinking processes are developed and conveyed as prescriptive solutions.
  • Interactive simulations that allow teams to work together to solve problems or participate in non-invasive / non-intrusive tasks.
    • Class sizes remain small, however, the process is repeatable across multiple classes.
    • Concepts can be tested and developed without disrupting the “real world” processes.
    • Simulations are accelerated models representing real-world conditions.
    • Simulations can be conducted internally with limited resources and is easily duplicated.
    • Unlike the other methods above, the “solution” evolves with the team’s experience.
Of the methods presented above, I find that interactive simulations tend to be the most effective.  Lean Simulations, an increasingly popular website, has amassed a wealth of free lean games, videos, and other lean tools that make this a real possibility.
More specific to the purpose of our discussion here is a post titled “Seven Benefits of Teaching Lean with Simulations” that offers shared insights to the benefits of using Simulations to train and teach lean principles to our teams.
Having a method to explore new ideas and develop concepts is only one hurdle that needs to be addressed.  The next task is establishing the need for change itself and instilling the sense of urgency that is required to engage the team and accomplish the necessary improvements.
The Need For Improvement Drives Change

Change is synonymous with improvement and must be embraced by employees at all levels of the organization.  Change and improvements are also required to keep up with competitors and to avoid becoming obsolete.  From another perspective, it is a simple matter of continued sustainability and survival. In this context, we recognize that businesses today are confronted with uncompromising pressures from:

  • Customers expecting high quality products and services at competitive or reduced prices, and
  • Internal and external influences that are driving operating costs ever higher.  Some of these influences include increased taxes, rising utility costs such as electricity and fuel, increased wages and benefits, increased material costs, and volatile exchange rates.

An unfortunate and sad reality is that any realized cost savings or loss reductions are quickly absorbed by these ever-increasing costs of doing business.  As a result, many of the “savings” do not find their way to the bottom line as most of us have been conditioned to expect.  While many companies are quick to post “cost savings”, I am surprised at how few post the “cost increases” that negate or neutralize them.

Some manufacturers, such as automotive suppliers to the Original Equipment Manufacturers (OEM’s), are expected to offer reduced prices year over year regardless of the current economic climate.  Unbelievably, “give backs” are expected for the full production life cycle of the vehicle and may even be extended to support service demand as well.  In today’s global economy, parts suppliers to the automotive OEM’s risk losing their business to competitors – especially those in low-cost labour countries – if attempts are made to increase prices.

My experience suggests that the best approach to establish a need for change is to work directly with the leadership and individual teams to understand and document the “current state” without bias or judgement. Our primary interest is to identify and assess “what is” and “what is not” working as supported by observations and objective evidence as gathered by the team.  To be very clear, this is not a desk audit. To understand what is really happening, an assessment can only be effective when it is conducted at the point of execution – the process itself.

We also need to understand the reasons why the current state exists as it does.  Is it the culture, system, processes, resources, resourcefulness,  training, methodologies, team dynamics, or some other internal or external influences? As a lean practitioner, I serve as a catalyst for change – helping leadership, teams, and individuals to see, learn, and appreciate for themselves what it means to be lean regarding culture, thinking, and best practices.

I believe that many lean initiatives fail for the simple reason that people have not been provided with a frame of reference or baseline (other than hearsay) that enables them to internalize what lean really means.

What’s Next?

The last thing we want to do is abandon current practices without having a sense of confidence that what we plan to do “in practice” will actually work. Secondly, we want to ensure that everyone understands the concept without jeopardizing current operations in the process.  As alluded to earlier, lean simulations allow us to do just that.

The main points of the article, “7 Benefits of Teaching Lean With Simulations“, as referenced earlier are summarized as follows:

  1. Simulations demonstrate lean principles in action,
  2. Games involve your audience,
  3. Games are perfect team building activities,
  4. Simulations are small and flexible,
  5. Games are confidence builders,
  6. Test real processes with simulations first,
  7. Give yourself a break.

Another benefit derived from simulations is that results are realized in a very short period of time due to the accelerated nature of the game.  As is often the case, real-time implementations may require days or even weeks before their effects are can be observed and felt within the organization.  Simulations can provide real world experiences without subjecting the company or the team to real world risks or consequences.

Finally, games allow participants to truly become involved in the process and present an opportunity to observe and assess team dynamics and individual strengths and weaknesses. A game is more than just an event. It is a memorable experience that involves all the senses, thinking processes, and emotions that engage the whole person.  To this extent the participants can and will internalize the concepts.  From this perspective, I say Game On …

Until Next Time – STAY lean!

Vergence Analytics
Twitter: @Versalytics

Lean – A Race Against Time

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Background

If “Time is Money”, is it reasonable for us to consider that “Wasting Time is Wasting Money?”

Whether we are discussing customer service, health care, government services, or manufacturing – waste is often identified as one of the top concerns that must be addressed and ultimately eliminated.  As is often the case in most organizations, the next step is an attempt to define waste.  Although they are not the focus of our discussion, the commonly known “wastes” from a lean perspective are:

  • Over-Production
  • Inventory
  • Correction (Non-Conformance  – Quality)
  • Transportation
  • Motion
  • Over Processing
  • Waiting

Resourcefulness is another form of waste often added to this list and occurs when resources and talent are not utilized to work at their full potential.

Where did the Time go?

As a lean practitioner, I acknowledge these wastes exist but there must have been an underlying element of concern or thinking process that caused this list to be created.  In other words, lists don’t just appear, they are created for a reason.

As I pondered this list, I realized that the greatest single common denominator of each waste is TIME.  Again, from a lean perspective, TIME is the basis for measuring throughput.  As such, our Lean Journey is ultimately founded on our ability to reduce or eliminate the TIME required to produce a part or deliver a service.

As a non-renewable resource, we must learn to value time and use it effectively.  Again, as we review the list above, we can see that lost time is an inherent trait of each waste.  We can also see how this list extends beyond the realm of manufacturing.  TIME is a constant constraint that is indeed a challenge to manage even in our personal lives.

To efficiently do what is not required is NOT effective.

I consider Overall Equipment Effectiveness (OEE) to be a key metric in manufacturing.  While it is possible to consider the three factors Availability, Performance, and Quality separately, in the context of this discussion, we can see that any impediment to throughput can be directly correlated to lost time.

To extend the concept in a more general sense, our objective is to provide our customers with a quality product or service in the shortest amount of time.  Waste is any impediment or roadblock that prevents us from achieving this objective.

Indirect Waste and Effectiveness

Indirect Waste (time) is best explained by way of example.  How many times have we heard, “I don’t understand this – we just finished training everybody!”  It is common for companies to provide training to teach new skills.  Similarly, when a problem occurs, one of the – too often used – corrective actions is “re-trained employee(s).”  Unfortunately, the results are not always what we expect.

Many companies seem content to use class test scores and instructor feedback to determine whether the training was effective while little consideration is given to developing skill competency.  If an employee cannot execute or demonstrate the skill successfully or competently, how effective was the training?  Recognizing that a learning curve may exist, some companies are inclined to dismiss incompetence but only for a limited time.

The company must discern between employee capability and quality of training.  In other words, the company must ensure that the quality of training provided will adequately prepare the employee to successfully perform the required tasks.  Either the training and / or method of delivery are not effective or the employee may simply lack the capability.  Let me qualify this last statement by saying that “playing the piano is not for everyone.”

Training effectiveness can only be measured by an employee’s demonstrated ability to apply their new knowledge or skill.

Time – Friend or Foe?

Lean tools are without doubt very useful and play a significant role in helping to carve out a lean strategy.  However, I am concerned that the tendency of many lean initiatives is to follow a prescribed strategy or formula.  This approach essentially creates a new box that in time will not be much different from the one we are trying to break out of.

An extension of this is the classification of wastes.  As identified here, the true waste is time.  Efforts to reduce or eliminate the time element from any process will undoubtedly result in cost savings.  However, the immediate focus of lean is not on cost reduction alone.

Global sourcing has assured that “TIME” can be purchased at reduced rates from low-cost labour countries.  While this practice may result in a “cost savings”, it does nothing to promote the cause of lean – we have simply outsourced our inefficiencies at reduced prices.  Numerous Canadian and US facilities continue to be closed as workers witness the exodus of jobs to foreign countries due to lower labor and operating costs. Electrolux closes facility in Webster City, Iowa.

I don’t know the origins of multi-tasking, but the very mention of it suggests that someone had “time on their hands.”  So remember, when you’re put on hold, driving to work, stuck in traffic, stopped at a light, sorting parts, waiting in line, sitting in the doctors office, watching commercials, or just looking for lost or misplaced items – your time is running out.

Is time a friend or foe?  I suggest the answer is both, as long as we spend it wisely (spelled effectively).  Be effective, be Lean, and stop wasting time.

Let the race begin:  Ready … Set … Go …

Until Next Time – STAY lean!

Vergence Analytics

Twitter:  @Versalytics