INDUSTRY

STANDARD
VERSION 2.0 AUGUST 2003

THE READER IS ASSUMED TO HAVE THOROUGH

KNOWLEDGE OF OEE AND RELATED ISSUES.

@ [email protected]

www.BlomConsultancy.nl

2003 ARNO KOCH, BLOM CONSULTANCY BV

Content
Preface

The History of the OEE Industry Standard

Section 1:
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7

Section 2:
2.1
2.1.1

2.1.2
2.1.3
2.1.4
2.1.5
2.1.6

Definition of several types of time

Groups and types of Time usages

Production time
Failure time
Idle time
Line restraint time
Unscheduled time
Idle Time registered as Unscheduled Time

Section 3:
3.1
3.2
3.3
3.4
3.5

Scope

Brief description of different scopes

OEE Solitaire
OEE
OEE Top
Operations Effectiveness
Asset Utilization
Gross Utilization
Net Utilization (=TEEP)

9
10
10
10
10
11
11
11
11

12
13
13
14
15
19
20
22

Speed definitions

24

Time versus Quantity

Maximum speed of what?
Name Plate Capacity (NPC)
The Standard
How maximum is maximum speed?

24
24
24
25
26

Section 4:

Quality definitions

27

Section 5:

Discussion issues

28

About Blom Consultancy

30

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Preface
Just scrape the barrel was the title of a recent cover story about organizations published in
Intermediair, a professional Dutch journal read by many managers. We dont need to pump
more money into it, we should work more efficiently, is what several politicians said.
Productivity can only be increased by making massive investments into ICT, is another
frequently heard statement. For reasons of efficiency, maintenance is being outsourced, is
another favorite saying.
When you look for a deeper meaning behind these types of slogans, you will first encounter
an enormous confusion of concepts. What is actually meant by efficiency, effectiveness, and
productivity? And is it indeed true that improvements in this area always involve large
investments, or is that precisely not the right thing to do?

Efficiency, effectiveness, and productivity .

What is the relationship between efficiency, effectiveness and productivity and what is the
path that can be followed to bring about improvement.
Efficiency is determined by the amount of time, money, and energy i.e. resources that
are necessary to obtain certain results. In order to meet our daily production quota, we
commit a specific machine that uses up energy, make operators and maintenance personnel
available, and provide raw materials. For example, if we are able to meet our daily production
with less energy and fewer operators, we have operated more efficiently.
Effectiveness is determined by comparing what a process or installation can produce with
what they actually produce; therefore, effectiveness does not tell anything about the
efficiency the amount of resources that have to be committed to obtain that output. If we
are successful in manufacturing more good product in the same time period, effectiveness
will increase.
Productivity is determined by looking at the production obtained (effectiveness) versus the
invested effort in order to achieve the result (efficiency); in other words, if we can achieve
more with less effort, productivity increases.

Efficiency
The amount of
resources needed to
execute the process

Process
Machine
Line

Effectiveness
The ratio between
the actual and the
theoretical output

Productivity
The ratio between
efficiency and
effectiveness

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Goldrath (The Goal) defines productivity as: the extent in which a company generates
money. The goal of a production company is therefore not to reduce expenses but to
generate as much money as possible!

Is improvement still possible?

Most striking when looking at the traditional approach to improvement, is that focus is often
exclusively on efficiency; the famous cheese slicer continuous to slice production further and
further.
How much room for improvement is still left at the input (efficiency) side? 10%? 20%? And
does it still make sense to try to reduce another operator or engineer, or to put pressure on
the buyers to negotiate even more competitive prices?
As is often the case, that question can not directly be answered. If the supplier can give us a
better price because we help him with managing his production process better or as we
see in the automotive-industry we force the supplier to go through basic improvement
processes, such as Lean Manufacturing or TPM, not only the price will decrease, but the
quality and the reliability in delivery will increase as well. That is good news for both parties.
However, by managing solely by keeping the cost price down, you run a large risk of saving
pennies per product but losing many euros or dollars due to stoppages, quality losses, etc.;
in other words, penny wise, pound foolish. Many production teams can give you striking
examples of that.

Increasing output
We strangely look less often at the output side the effectiveness of the equipment.
Apparently, the output is more or less considered to be as it is. However, every line
manager knows that the installation will spontaneously start to run better simply by standing
beside it and giving it attention. When you check the logbooks, there are days that, on
occasion, the installation produced spectacular amounts of good output.
It happened to go well that day
Ask the team how that happened and you will hear a precise run-down of all elements that
went right that day. The raw materials arrived on time and were of the correct quality, the
installation kept on running and was set correctly, the right people were present, it was not
too warm, etc., etc. This is often regarded as a fluke and nobody is wondering how you could
create a similar situation a second time. That is strange actually, for if it can happen once,
why should it not be possible to happen again. And if it can happen a second time, why not
always? Usually, a whole series of Yes, buts will follow
Suppose you would write down those Yes, buts and turn them into a list of action items.
What would that give us?
To be able to answer that question, we will have to dive a little deeper into the world of
Effectiveness.

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Our machines run non-stop!

What determines the effectiveness of an installation? First of all we must address the
question of whether it does or does not run. Roughly there can be three reasons why an
installation is not running:
The installation quit; it broke down.
The installation could be running technically speaking, but is waiting for something;
materials, an operator, filling, to be set-up, etc.
The installation could be running, but is not planned in because there is more
capacity than demand.
Of course, the ideal machine would never break down and would never have to wait for
anything; therefore, it would be running all the time as long as there is demand for the
product.
Our machines run at top speed!
Subsequently, the effectiveness is determined by the speed at which the installation is
running. This is always a tricky topic, for what is the maximum speed? The speed at which it
is at the verge of breaking down? Or the speed at which the quality of the output reaches the
bottom limit of its spec? This will guarantee a lively discussion. It is useful to see that it is
often simply unknown what the maximum speed is, while the maximum speed that people
come up with is usually based on various assumptions (which, in turn, you could turn into an
interesting list of action points!). An example of such assumption is: If I ran the machine any
faster and the material got jammed, we would suffer major damage. Why does it get
jammed? Is that always the case? When not? What must happen to prevent it from jamming
again? Why does damage occur when it gets jammed? What do you have to do in order
to. etc.
We have zero defects!
If the actual speed is determined versus the theoretical speed, the next effectiveness
determining factor can be looked at: Does the realized output meet the set quality standards?
It can be quite an eye opener, if you ask ten different people on the shop floor to indicate
very clearly when a product does or does not meet the specs, you will receive ten different
answers. It becomes even worse when it turns out that the one who produces the product,
the operator, cannot determine, or cannot unequivocally determine this. Also here lie many
opportunities to solve all Yes buts and to ensure that the person who makes the product is
also able to determine whether he is manufacturing a good product, so that he can keep the
quality within pre-set specifications.
Are we ideal?
Thus, if there is demand, an ideal and effective machine is always running at maximum
speed without producing any out-of-spec products. We can assume this to be 100%
effective. We know that 100% effectiveness is impossible over a longer period of time; after
all, installations must sometimes be maintained and converted. The guideline is that 85% is a
realistic World Class value for traditional machines. That implies that the installation, for
example, produces 99% of the products First Time Right within Specs, operates at a speed
of 95% of the theoretical maximum speed, and is actually running 90% of the operating time
(99% quality x 95% speed x 90% running time = 85% effectiveness).

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In a three-shift system it means that the installation runs for 90% x 24 hrs = 21:36 hrs at 95%
speed with 99% quality. Consequently, there will be 03:24 hrs available for maintenance,
conversion, and other possible waiting times. Incidentally, the 85% mentioned is a rather
conservative figure; nowadays we see in the automotive-industry equipment that runs over
90%.
The analysis of hundreds of installations for various processes shows that, as rule of thumb,
an average installation in an average (non-TPM) company runs at an effectiveness rate
between 35 and 45%. Of course, there are always cases that stick out; for example, values
in the pharmaceutical industry may lie considerably lower and there are also cases that show
considerably higher values.
If it turns out that an installation has an effectiveness of 40%, while people always thought
that there were limited options left for potential improvements, it is extremely good news: this
means that twice as much good product can be manufactured (your effectiveness rate would
be 80%!) at the present cost level. Or, you manufacture the same product with one shift
instead of two.
Yes, but then the costs will increase!
It is often assumed that achieving such improvements will necessitate an enormous increase
in costs for, for instance, maintenance. That is sometimes partly true, for example, when it
concerns overdue maintenance and you are then actually paying off a loan, because a
fundamental design flaw has to be solved (and, therefore, you can also see this as paying off
a postponed cost item). However, by activating the knowledge that is present on the shop
floor in the right way, 80% of the improvements can often be implemented without any capital
expenditures and at minimal costs.
It is not so hard to imagine that an installation, which halts on a regular basis for various
reasons, or whose process is not stable enough to operate at high speed without any losses
in quality, automatically requires more resources at the input side as well! Reversely, it may
be that lowering the efficiency (for instance, by spending a little bit more money and time on
preventive maintenance) will bring about a strong increase in effectiveness, which - bottom
line - creates a higher net productivity. Such considerations can only be made if, in addition
to efficiency, particular attention is paid to losses in effectiveness as well.
In all cases, it is necessary to take decisions concerning actions leading to improvement on
the basis of facts and figures describing the entire productivity picture.
World Class Manufacturing does not accept any losses at all. That is what management
must focus on and management must have the will to go further than mere window dressing
and scratching the surface. Unfortunately, that is often even harder than just opening the
wallet. Companies that do take this route, discover over and over again: There still lies a
nearly unlimited potential for improvement for those who learn to see it and seize it!

Arno Koch
Senior Consultant

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The History of the OEE Industry Standard

Working as a sr. Lean consultant I noticed two things over and over again:
1.
2.

Operators, line managers and management all either want to compare equipment, or
are afraid that this will be done.
Setting up the definitions for gathering OEE data brings up the same discussions over
and over again. Larger companies all seem to struggle -most political- fights about
how OEE is defined, one wants to include PM, the other takes it out, and the third
takes it out under conditions... thus giving fear on the shop floor that 'unfair
comparisons' are done.

Ad 1. Although I feel OEE is a shop floor tool, not meant to benchmark, it is certainly
possible to use certain elements as useful reference information considering it is done
in the right way.
Ad 2. For every problem there is only one optimal solution. So why discover the wheel
again...
So I started to wonder if it would be possible to define a kind of an 'Industry Standard OEE
definition', that would make sure that at least within the same company everybody uses OEE
in the same way. i.e. if we are talking about 'Availability' at least it should be clear that
everybody in- or excludes the same issues (i.e. breaks, PM, etc).

What I did was this:

I took ALL OEE registrations I had ever seen (quite some...) and figured out where
the common denominators were.
I grouped all possible OEE elements in a logical way.
I tried to give all 'negotiable' elements a clear definition.
I validated every group as 'Production', 'Failure', 'Idle' or 'Unscheduled'.

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At first I thought this would become a huge document since the equipment I looked at was
varying from refineries to cement- and paper mills to beer breweries, food processors,
drilling, stamping, welding, plating.... well you name it and is was there.
Guess what I figured out the whole lot of it fits on a couple of A4!
Then I took this concept to some experienced OEE implementers and discussed every
element. Every time we had a discussion, I gave all arguments I had heard and tried to find
the Best Of Best argument, considering it had to be applicable on ANY other situation! In fact
this process is still going on, but the picture becomes quite clear.
It is my objective to have an OEE standard definition available where every choice is
companioned with very reasonable and strong argumentation, that (if I did my job well) can
not be refuted within the spirit of TPM and Lean Manufacturing.
Now, in 2003 many parties have joined us on this adventure and tried hard to doubt every
element of the standard; yet the arguments given by the first group of forum-members stand
firm. However we have gathered some additions and clarifications which are added to this
version of the OEE Industry Standard.
I now want to invite every OEE using company to join us in this standard:
1. to check if the definition can stand up to new discussions;
2. to get broader support within the industry, so we get more unity in OEE
definitions.
If you would like to contribute to the discussion please let us know by sending an email to:
[email protected].

Arno Koch

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Section 1:

Scope

Several parties, such as production teams, line managers and top management may have a
different scope when looking at effectiveness. Being aware of those differences, it is
possible to calculate different indices representing those different scopes; all based upon
the same data. In the literature we find several attempts to do so, unfortunately they are not
always consistent.
Although this definition goes beyond the scope of OEE, it is necessary to have a clear picture
on this issue since it determines how to define certain categories within the OEE.

Total time (365 days x 24 hrs)

Total Operations time

Not scheduled

Loading time

Unscheduled (-)

Running time (Production time)

Failures

Idling

Line
restraint

Theoretical output
Reduced
Speed

Actual output
Good!

Scrap

Minor
stoppages

Rework

OEE Solitaire

OEE (top)

Operations Effectiveness

Asset Utilization

Net Utilization (=TEEP*)

Capacity Utilization

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1.1

Brief description of different scopes

1.1.1 OEE Solitaire

OEE Solitaire is only applicable in situations where the monitored equipment has a technical
link to other equipment/processes. Thus the equipment is an integrated part of a line. The
effectiveness of such equipment is partially depending on factors like line balance and
effectiveness of other equipment. No Input (input buffer empty) and No Output (Output
buffer full) are the exponents of such influences.
In certain case i.e. with huge installations in process industry parties may want to know the
effectiveness of the equipment independently from the rest of the process. In other words;
What would be the effectiveness of the equipment when it was running solitaire, with no
restraints from the rest of the line?
For this purpose, an OEE can be calculated excluding No Input and No Output thus
showing the effectiveness purely focussed on the equipment independent from the line.
Calculating the OEE Solitaire takes Line restraint time (normally considered to be (I) Idle
time) out of the loading time (so it is considered as Unscheduled time (-) ).
Caution: No Input/No Output should not be confused with for example no raw material or
no packaging since these have an other cause; they are not Line Restraints!

1.1.2 OEE
OEE is the default scope for a production team.
It shows the ratio between the theoretical maximum good output during the loading time vs
the actual good output.
The loading time can be less then the operations time since the equipment can be
unscheduled during the operations time, thus reducing the loading time. Loading time
therefore is the time the equipment was supposed to be running
In cases where several products have been produced, (either sequential or parallel) the
Performance part of the OEE is calculated as a weighted average between the several
expected output ranges.

1.1.3 OEE Top

OEE Top is equal to OEE except for the way the performance rate is calculated. In OEE Top
the performance rate is calculated based upon the Name Plate capacity of the equipment;
thus ignoring restraints due to the product-machine combination. It is used to detect
effectiveness losses due to the chosen product mix.

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1.1.4 Operations Effectiveness

Operations effectiveness goes beyond the scope of the production team (Maintenance
Operator Engineer). It includes the operations time the equipment is not available to the
production team or operations management does not want or can not schedule the
equipment. Examples are [No Orders], [Legal Restrictions] like energy contracts and
mandatory holidays and test runs for R&D.

1.1.5 Asset Utilization

The percentage of the total (calendar) time that the equipment runs.

1.1.6 Net Utilization (=TEEP)

Net utilisation reflects the ultimate improvement potential; it is the ratio between the total
(calendar) time and the actual effective production time (or, if you wish; the theoretical
maximum amount of good product versus the actual amount of good product coming out
during that time). In some publications you may find the same definition named TEEP; Total
Effective Equipment Performance.

1.1.7 Capacity Utilization (=Gross Utilization)

Capacity Utilisation reflects the ratio between the total (calendar) time and the loading time. It
shows the hidden operations potential i.e. the difference between 3 and 4 shifts.

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Section 2:

Definition of several types of time

Type Name

Definition

Production time =
Running time

Something is coming out of the equipment, regardless of the

amount, speed or quality.
A machine, spinning at top speed, not generating output
therefore is not running.
Caution; batch producing equipment (like cookers, brick-ovens)
are considered to run during their batch processing time.

Failure time =
Breakdown time

The machine is not having output due to a machine related

technical problem.

Idle time =
Waiting time

The machine is not producing output because it has to wait for

something (like a setup, or raw material)
Therefore, waiting for a technician during a breakdown is not
Failure time but Idle time!

Line restraint time

The equipment can not generate output because it gets no

input from the line, or can not give its output to the line
Applicable to equipment with a technical link to the line (pipe,
conveyor)

Unscheduled

The equipment is scheduled out of the total operations time for

reasons beyond the scope of the production team.

Not Scheduled

Time where there are no operations-activities going on at all.

The factory is closed, the lights are out.

A machine is running when there is output,

regardless of the quantity or quality

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2.1

Groups and types of Time usages

Refer to Section 2
for explanation!

2.1.1 Production time

No Time Usage

Production

Time type

Max. recommended
Try to define no
more categories!

Plating
Stamping
Assembly
Filling
Moulding
Drilling
Refining
Baking

2 Reworking
Re-filling
Re-pressing
Remanufacture

Something is coming out of the machine regardless the

speed and its quality.
In batch producing equipment:
From the start of the batch processing time until the end
of the processing time. While loading or unloading the
equipment, the product is not being processed thus the
equipment is NOT running!

The equipment is running, (re-)processing product that

was not produced first time right.
Although this is normal production time in terms of OEE,
in some cases it is useful to split the different types of
production runs to make them visible in the pareto of
time-usage.

3 Reduced Speed Run

Running die
Reduced Setup Tact

The equipment is running at reduced speed; the

equipment output is deliberately slowed down to balance
a line or to execute an inline setup.
Although this is normal production time in terms of OEE,
in some cases it is useful to split the different types of
production runs to make them visible in the pareto of
time-usage.

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2.1.2 Failure time

No Time Usage

Time type

Max. recommended

10 Failure [function x]
Failure filler
Failure Capper
Failure depalletiser

10

A failure (=breakdown) prevents production due to a

technical reason in the machine. The categories should
be chosen process oriented and should describe the
phenomenon, not the cause.
Choosing functional categories (like Electric,
Mechanical, Pneumatic) is not supporting the crossfunctional production team efforts.

11 (Re)Adjustment
Adjustment
Re-calibration

The machine is stopped WHILE A BATCH RUNS

because adjustment is needed, to keep/get a product in
spec. It is seen as a failure because at a certain point
the equipment is no longer capable of producing the
right spec due to a technical malfunction that needs to
be corrected. The process is not capable of a stable
operation.
Adjustment and calibration after setup belong to startup.

Time categories should be PROCESS related

rather than FUNCTION related

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2.1.3 Idle time

If two or more time-usages occur at the same time,

the primary reason for stopping is being registered

No Time Usage

20 Setup
Product change
Setup
Quality Change

Time type

Max. recommended

A setup in terms of OEE lasts from the last product A

until the first product B, regardless its quality. (remind,
this is different from the SMED definition: Last GOOD
product until first GOOD product!)
Depending the situation it might be useful to precede or
succeed the setup time by a shutdown and startup
category, to make visible in a pareto where the main
losses of setup are to be eliminated.

21 Startup/Shutdown
Heat up
Start after stop
Run-in
Checking machine
Preparation
Pressurise
Pump dry
Empty out
Clear out
Rinse out
Cool down
Calibration

The machine is not producing due to the fact it has no

vertical startup or shutdown. This can occur at beginning
or ending of shift but also before or after a setup or
repair works. This time is defined separately from the
main reason to shut down the machine.
Cleaning belongs here if it is part of the startup or
shutdown activity, including startup of a new product
(process-cleaning).

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No Time Usage

22 No Operator at machine
Break
Meeting
Training
Help at other machine
Washing hands

23

Quality problems Process disturbance

Time type

Max. recommended

The machine is available, but is not running because the

operator is not operating it for example during his break,
a training or a meeting. Just like Preventive
Maintenance, this time needs to have a balance
between doing enough but not too much.

Stopped because output is out of The machine can not run because the process can not
meet up with the specifications for (at that moment)
spec
unknown reasons.
If the reason is known (i.e. bad raw material), it should
be registered as such (Bad raw material = Waiting for
correct material).

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No Time Usage

24 Refill/Replace
Blade change
Refill ink cartridge
Oil Refill

25 Loading
Load labels
Load boxes
Load Raw material

26 Handling
Truck (un)loading
Forklift driving
Container change

Time type

Max. recommended

The machine is stopped while refilling or replacing

auxiliary, e.g. cutting blades, coolants, ink, oil, etc.

The machine is stopped while refilling/loading raw

material, e.g. packaging materials, foils, and other raw
materials.

The machine is waiting while needed material is being

handled.
This is a more specific situation from the Waiting block.

27 Waiting

Waiting on Tooling
Waiting on Engineering
Waiting on Maintenance
Waiting on Inspection
Looking for Gauge
No/Bad Packaging
No/Bad Raw material

The machine is not running because, for example, the

correct raw material or a tool is not present at the
moment it is needed, or an action can not be performed.

No operator Available

It might occur we forgot to schedule or replace an

operator.

In this block we find reasons for idling that are caused

by a weak planning. In the block No Resources and
No Personnel the reasons are Force Majeure.

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No Time Usage

28

Autonomous Maintenance &

Cleaning
Shift Maintenance
Daily Cleaning

Time type

Max. recommended

The main reason why the machine was stopped was

due to AM activities, including cleaning. If a machine is
cleaned in the time it was standing due to another
reason (ie waiting for raw material) the real reason why
the machine is standing is being registered.
Process cleaning (like rinsing between two products)
belongs to startup-shutdown.

29

Preventive Maintenance
during Loading Time

Planned PM during Loading time

Scheduled time to perform PM.

Unplanned PM

The machine is stopped at a not scheduled moment to

perform PM or
The machine is stopped at a scheduled moment but
exceeding the scheduled time to perform PM during a
scheduled time.
PM happens in process; it is scheduled in the
production sequence and needs to have a balance
between enough and not too much. If well performed,
the planned idling time will reduce the unplanned
breakdown time.

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2.1.4 Line restraint time

No Time Usage

50 No Input (in Line process)

Empty input buffer
No input due to pre-heater
No input due to depalletiser

Time type

Max. recommended

The machine stands still due to no input from a

preceding process that has a technical link, e.g. a
conveyer.
In lines it can be useful to get an overview in the pareto
to show what process decreases the effectiveness from
this machine the most. In that case the time usage is
split in two or more items like;
[no input due to process x].

51 No Output (in Line process)

Output buffer full
Stop at palletiser
Stop at tray packer
Conveyer blocked

The machine stands still due to the fact it can not get rid
of its output; mostly due to a stop in a succeeding
process that has a technical link, e.g. a conveyer.
Also see block [No Input].

Remark:
The Line Restraint categories are used to reveal unbalanced capacities and/or timing in line
processes. A line can be thought of literally: several machines tied together with conveyors,
pipes etc.
However, applying Lean-Principles, those categories can be very well used to detect unbalanced situations between machines not technically tied together, e.g. in a cell or between
several departments.
It even might be used to detect flaws in the supply-chain.
The [L] category therefore can be seen as a strict [L]ine Restraint but also as a [L]ean or
[L]ogistic restraint.

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2.1.5 Unscheduled time

During the operations time, the equipment may be unscheduled because:
the product is not needed (over-capacity);
it is not allowed to run (due to Governmental regulations or contracts);
Force Majeur (catastrophes outside of the company);
the equipment is handed over to an other party (e.g. R&D).
No Time Usage

Max. recommended

60 No Orders

No Orders
Over-capacity
PM during No Orders
Cleaning during No Orders

Time type

The machine is not required to run due to a lack of

customer orders; the capacity is not needed.
(customer = the one who pays for the product!)
Beware!

A warehouse will never be the customer!

Do not hide over-production!

61 No Personnel Available
No Personnel
Strike

The machine is not scheduled for production because

there is no operator present due to force majeure like
Strikes
Massive influenza
Poor availability of workforce in the region.
If there is no operator available due to a lack of planning
(so the machine was supposed to run), choose no
operator at machine or wait for operator (both [I]dle).

62 No Resources
River Frozen
Energy Contract
Boycott

The machine is not scheduled for production because a

resource is not available due to reasons OUTSIDE of
the company, including energy; thus reasons other then
lack of planning or handling (in such cases: Waiting).

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No Time Usage

63 Test Production
R&D
Test Run

Time type

Max. recommended

The machine is not scheduled for production to make it

available for product development, testing new products
or processes etc.

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2.1.6 Idle Time registered as Unscheduled Time

Activities that normally would have been performed during loading time, can sometimes be
scheduled outside loading time. In a two-shift operation, the machine might be setup or
cleaned during the night or in the weekend, in absence of the regular crew. Preventive
Maintenance could be carried out at a moment no production was scheduled. In a 3 shift
operation from Monday to Friday, the PM could be scheduled in the weekend, thus not
affecting the loading time.
In this way OEE may be increased by using non-loading time for activities that normally
would affect loading time.
Doing so has some serious disadvantages:

The activity is necessary to perform the scheduled production thus can not be skipped:
This means the OEE is artificially high. When Loading Time needs to be extended (e.g.
more capacity is needed) and 2 shift becomes 3 shift, or 3 becomes 5 shift, those
activities automatically will fall into the loading time, thus dropping the OEE!

Usually, outside the loading time, there is no pressure to get the machine up and running;
this might result in a less effective performance of the activity scheduled outside of the
loading time.

It is advised to register ALL machine related activities, necessary to perform the operation,
WITHIN the loading time, regardless of the normal shift-time. Thus PM on Saturday would be
Idle time and decreases the OEE!
However, if you choose not to do so, make sure to register ALL the time the machine is being
touched or activated outside normal loading time. In this way the potential loss can be
identified and made visible.

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No Time Usage

70

Time type

Max. recommended

Preventive Maintenance outside

Loading Time

Planned PM Outside Loading Time PM necessary to maintain a high availability of the

(Annual) Overhaul
equipment, being performed outside of the normal
Loading Time. In a 3 shift operation from Monday to
Friday, the PM could be scheduled in the weekend, thus
not affecting the regular loading time.
Overhaul is a specific form of preventive maintenance. If
the machine is unscheduled for a longer period of time
to be completely overhauled, it should be considered
[PM during loading time] thus (I)dle. Only if the overhaul
is performed at a moment the equipment would anyway
not be running (e.g. because the facility is closed) it
belongs in this block. If it is done in a period where there
are no orders, [No Orders] is the reason for stopping the
machine, and not the overhaul. Thus [No Orders] is
registered! To identify PM during No Orders, make a
separate category: [PM during No Orders].
Unplanned PM Outside Loading PM outside loading time can take longer than originally
planned; this can be made visible here.
Time
If PM in Loading Time takes more time than planned
and is being continued outside Loading Time it becomes
[Unplanned PM Outside Loading Time].

71

Activities performed outside

Loading Time
Cleaning Outside Loading Time
Setup Outside Loading Time
Loading Outside Loading Time

Activities that normally would have been performed

during loading time, performed outside loading time. In a
two-shift operation, the machine might be setup or
cleaned during the night or in the weekend, in absence
of the regular crew.

Maximum Time categories per machine +/- 20;

All categories should fit on one side of the OEE registration form!

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Section 3:

Speed definitions

To calculate the performance rate, the theoretical maximum speed is related to the actual
speed.

3.1

Time versus Quantity

The maximum speed can be calculated in time or in number of product;

i.e.
- maximum speed is 10 seconds per product
- maximum speed is 6 products per minute
Nevertheless since OEE is primarily a shopfloor tool, and people on the shopfloor rather talk
about units being produced than seconds it has taken to produce a unit, it is preferred to
register speed in units, not in time.

The parameters for Performance can be expressed in either

TIME or QUANTITY, but QUANTITY is preferred
3.2

Maximum speed of what?

The maximum speed can be determined from the NPC, the Name Plate Capacity (Design
speed). However, mostly there are several product(groups) on a machine with their own
derived maximum speed. In such cases, special care has to be taken not to include hidden
losses in the maximum speed due to difficult products which might refer to products which
we dont control the process for

3.3

Name Plate Capacity (NPC)

The NPC should not be taken granted for. More than once it was discovered to include all
kind of hidden losses. The manufacturer might have chosen a low NPC for reasons of liability
or to fit the equipment with other equipment in a line.

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3.4

The Standard

The standard is the theoretical maximum speed for a product(group)

on the machine; thus the performance rate never exceeds 100%
The derivation of different maximum speeds for different products should be done in a
mathematical manner.
Example:
An extruder is designed (and checked for!) extruding max. 500 kg plastic per hour.
Product A consists of 250 grams plastic, product B consists of 500 grams.
Thus, the theoretical maximum speed for A is 500kg/250gram= 2000 pcs per hour.
The theoretical maximum speed for B is 500kg/500gram= 1000 pcs per hour.
The theoretical maximum speed for a product-machine combination is called The Standard.
It is specifically not called Norm, since this word has negative associations related to piece
work for many people in different countries.

At well chosen Standards, the performance rate will never exceed 100%,
unless the product or the machine fundamentally changes

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3.5

How maximum is maximum speed?

100% OEE =
The theoretical maximum capacity of the equipment

This statement should be taken serious. If not done so, situations may (and do) occur where
the shopfloor is filled with scrap, the machine is suffering one breakdown after the other and
still accounts for 80% or more OEE. How?
70% Availability, 80 % Quality, 143% Performance = 80% OEE !
As soon as the performance rate goes over 100% (indicating the standard is chosen too
low!) the beautiful balance of the OEE parameters is broken, and the focus may be taken
away from what it is all about: identifying and reducing losses.
In cases where the maximum speed has to be determined based upon a Best Of Best
analysis, it should be considered that this BOB is achieved under the former and current
circumstances, including current losses.
Since in the end even standards are broken by product- and equipment improvement, the
BOB should not be considered too easily as maximum value. As a rule of thumb the BOB
value should be raised with at least 10 to 25% to serve as Standard.

A well chosen Standard will only change

when the product or the machine fundamentally changes

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Section 4:

Quality definitions

Producing quality means producing a product that meets its specification, not by trying
more than once but First Time Right.
Products not meeting its full spec, but still useful and possible to sell (i.e. as B product, or in
a different market) are not first time right and thus should be considered scrap.
If a product does not meet its spec, but can be reworked, in terms of OEE it is to be
considered as scrap, but can be identified as a special form of scrap, by labelling it as
rework.

In terms of OEE, Scrap, rework and sub-spec are the same:

It was not first time right; therefore it is a loss

Defining scrap-product may reveal poor specifications or poorly testable specifications!

Good specifications always refer to the needs of the customer!

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Section 5:

Discussion issues

Q:

Why do you include breaks in the OEE? We have a legal right to have a break!

A:

This approach assumes the machine can not run while you are having your coffee or lunch.
The reason to include it in the OEE is to make the production team aware of this potential
loss. Is there really no way to let the machine run 15 or 30 minutes without operator
interference? Would it be possible to have an other operator at the machine? Could an other
operator watch your machine while you go away?

Q:

We feel cleaning and maintenance should not be included in OEE. This is necessary to
keep the machine running well!

A:

Exactly! So Maintaining a machine is not meant to reduce its effectiveness No, we clean
and maintain to RAISE its effectiveness. By taking this time out of the OEE, we will never see
if the effort we spent to clean and maintain is bringing us a higher effectiveness at the bottom
line!

Q:

Ok, but at least you should take out Preventive Maintenance. I, the operator, do not
have any influence on preventive maintenance!

A:

You, the operator, are part of a production

team. Together with your maintenance and
engineering colleagues you are responsible for
the effectiveness of the equipment. If you, the
operator, can prove with facts and figures that
you are suffering severe losses due to
repeated breakdowns and too little (preventive)
maintenance, or due to too frequent PM, it
serves a mutual interest if you bring this up in
your production team meeting!
Here too: If PM reduces your effectiveness:
stop it, otherwise: do it!

Q:

You want us to track a maximum of 10 failure categories, but I want to define 85. How
else can I ever know what bold is breaking?

A:

At first glance that seams to make sense. But OEE is not a breakdown registration system, but
a loss detection system.
Let me explain the consequences: Imagine after 3 months registering OEE data, it shows the
main loss is in availability. So now you want to know what you need to do to get your
availability up. So you take one of the seven tools and draw a pareto diagram of all your timeevents. Lets assume each of the 85 breakdown items occurred at least once. What you will
see is a pareto with an immense long tail, not giving a clear clue where the main losses are
located.
In the other approach where you would have registered failures on, lets say, 5 process parts of
the equipment (like incoming conveyer, pre-heater, moulder, compressor, outgoing conveyer)
it would show what part of the equipment is restraining the process most. Then you start
temporarily to focus on that part. A simple registration card (maybe even showing the 85
breakdown items) for some weeks will give detailed insight whats going on. Sometimes it is a
matter of simple maintenance, sometimes a Small Group Activity can solve the problem for
once and forever. By this circle of focused improvement the equipment will become better and
better. This example also shows another disadvantage of the breakdown registration

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approach; if you handle each breakdown in the best way, thus eliminating it forever (either by
reengineering or taking it into PM), it will not reoccur, while other breakdowns may start to
occur. So after a while the breakdown registration system will not reflect the reality anymore.
In the other approach this is less likely to happen.

Q:

If we have no raw material, or we wait for a technician, we start to clean. What do we

register?

A:

The reason why the equipment stopped running is not the cleaning but the waiting for
technician or the raw material. Always register the true reason why the machine is stopped,
not how you spent that time.

If you would like to add a discussion item, please let us know: [email protected]

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About Blom Consultancy

Blom Consultancy, founded in 1992, is specialized in full-scale planning and
implementation support of World Class Manufacturing (WCM) programs such as TPM,
EFQM, Kaizen, TQM, Six Sigma, JIT and Lean Manufacturing. WCM aims for higher
production at less effort by continuously reducing losses and creating ownership.
Blom Consultancy is a team of consultants who have already implemented World Class
Manufacturing for many companies in all kinds of industries throughout Europe such as
Chemicals, Pharmaceuticals, Beer-Beverages, Electronics, Automotive, Food, Personal &
Health-care. As a Change Agent, in the first phase of the process of becoming World Class,
we start mobilizing the power of the organization. Without fuelling this process in the
beginning, it dies. From Change Agent we gradually become Facilitator. Depending on the
occurring losses, we inject knowledge and tools to eliminate those losses.
Blom Consultancy has developed shop floor tools for virtually any loss; tools to help you
implement your own solutions. We combine our tools with the techniques already present in
your company, to achieve effective loss reduction. We transfer this approach as soon as
possible. In this way oil spots arise; we implement with people from the shop floor, they
experience how it works, and we help them when they start to implement. After a while, when
the spirit of WCM has permeated the organization, our roll changes from Facilitator to
Auditor. From a distance we can point out the details that make out the losses, and we keep
you sharp.
Blom Consultancy is the developer of the OEE Toolkit software and initiator of the OEE
Industry Standard. More information about the OEE Toolkit software can be found at
www.oeetoolkit.com.

Beekseweg 7
5735 CB Aarle-Rixtel
The Netherlands
tel. +31-492-381349
fax. +31-492-383768
@ [email protected]

www.BlomConsultancy.nl

www.oeetoolkit.com

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