Lean Manufacturing Management On The Floor

Use OEE For One Asset Only

Klaus M. Blache | March 19, 2018

Q: Should we measure Overall Equipment Effectiveness (OEE)?

A: The quick answer is yes, but only if you have the discipline to measure it correctly. OEE is one of the most misused metrics in the manufacturing world. In simplest terms, OEE = availability x quality x performance, on one piece of equipment. A best-practice OEE value in industry has been largely promoted as 85%. Thus, it’s not surprising that a high percentage of the OEE values companies share are around that number. But, when I ask them individually (or after the bosses leave), if they really believe that number, many say that they do not. Also, 85% is just a calculated number that should really be different by type of industry.

Many kinds of adjustments are made to get to that magic 85% number. Of the many factors, the most common are level of automation, age of equipment, experience of workforce, manufacturing difficulty of product, levels of changeover, varying cycle time, and type of equipment. Some of them make some sense. Others do not. But they all blur the focus on improving the bottleneck..

When TPM (Total Productive Maintenance) was first introduced in North America, OEE was intended as a way to measure how a single piece of equipment was performing, identify areas of improvement using the Six Big Losses, and work in small teams to solve issues and make ongoing improvements.

The original intent was to measure OEE when/where you want to perform an improvement. Somewhere along the way, someone decided to do the calculations on multiple machines, then production lines, then an entire plant. Whether it was a consultant or manager wanting to compare operations that took us to where we are today, it was never the intent.

Losses Are Key

Each of the three OEE factors carries two types of losses:

• Availability losses are breakdowns (reactive maintenance) and setup and adjustments.

• Quality losses are startup rejects and production rejects/rework.

• Performance losses are small stops and idling and process defects and rework.

By addressing these problems, many small continuous improvements can be made by teams motivated to eliminate waste. The improvements raise the OEE percentage. The best performing organizations have both operations and maintenance working as a team.

TEEP Tells The Story

Wouldn’t you want to measure just your real improvement rate from a real baseline? The best way to do that is to calculate TEEP (Total Effective Equipment Performance). It’s OEE x utilization, with no other adjustments. You can only get a TEEP score of 100% by producing all good parts, at the fastest possible speed, running 24/7, without any stops. TEEP will show your actual capacity and measure real improvement. Remember, it’s all related.

In Maintenance Technology (Aug., 2017) I stated that, “The foundational elements of lean and reliability are so intertwined that you can’t accomplish lean without reliable people, processes, and production machinery and equipment.” For example, based on my North America benchmark study, top-quartile companies (lowest reactive maintenance) average 7% higher OEE than 2nd- and 3rd-quartile companies, and have an 11% higher OEE than the bottom quartile.

When I was trained at the Goldratt Institute on Theory of Constraints (TOC), it was emphasized that every process has a single constraint and that total process throughput can only get better by improving that constraint. Use your throughput-
improvement-analysis program, computerized-maintenance-management-system data, bad-actor list, and production-downtime data to identify the bottleneck. Then do a baseline OEE calculation on the bottleneck equipment to start the process. As improvements take hold, you’ll see your true OEE improve.
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Based in Knoxville, Klaus M. Blache is director of the Reliability & Maintainability Center at the Univ. of Tennessee, and a research professor in the College of Engineering. Contact him at kblache@utk.edu.

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