Introduction to OEE

John R. Rattray
Memex Automation Inc.
[email protected]
(Overall Equipment Effectiveness) (905) 635-0590
Mobile: (416) 460-7637
Introduction to OEE
OEE OVERVIEW

“In the Land of the Blind,

the One-Eyed Man is King”

Metrics gives ‘Sight’ to the

Total Organization

2
Introduction to OEE
OEE OVERVIEW

What if you had a ‘Tool’ that could help

increase manufacturing efficiency 10 - 50%
$$$$
$

Profitability would increase 20 – 300%

3
Introduction to OEE
OEE OVERVIEW

OEE Defined
Overall Equipment Effectiveness (OEE) is a quantitative way of measuring how
well a standalone or a flow-line production system operates in making good
product relative to what the system could make if it operated perfectly, 100% of
the scheduled time based on specific products and processes.

OEE is a Key Benchmarking metric used to define the Throughput Gap between
Current State and ‘World Class’ for your system.

“World Class” is considered to be 85%. Good companies run in the 95+% range.
Many manufacturers run in the 30-60% range.

4
Initial Foundation
OEE OVERVIEW

“OVERALL EQUIPMENT EFFECTIVENESS:

A Powerful Production/Maintenance Tool
for Increased Profits”
Robert C. Hansen, PE., CMRP
Industrial Press, New York, NY 2001

Owner: RC Hansen Consulting, LLC

970-490-1720 cell: 970-481-3145

90 % of my Clients have increased Profits by over

$1 Million Dollars in the first year post
engagement.
5
Initial Foundation
OEE OVERVIEW

Correctly identifying improvement targets often leverages “Hidden Factory”

Financial Benefit Opportunities of > 10 : 1 over the next alternative.

“What IF?” a Work Center improved OEE by 3 points (approx. a 5% ↑ in OEE)

and we sold everything?

WC A ↑ IFO by $625,000 WC B ↑ IFO by $48,000

6
Initial Foundation
OEE OVERVIEW

Providing everyone in the organization the range of OEE improvement

tools is valuable.

Identifying exactly where and when to focus your Key people (and
avoid activity traps):

Priceless!!!

7
Initial Foundation
OEE OVERVIEW

All methodologies require data to support

decision making
Lean 6S, OEE, TEEP, TPM, Takt Time, TQM, Kaizen, Continuous Improvement
Collect actual automated machine data to prove the case

 Real-time machine visibility with OEE metrics on any Machine

 Dashboard for ease of viewing – reduce downtime
 Connect production floor to Microsoft AX
 Shop Floor to Top Floor
 Increase Productivity
 Embrace Manufacturing Efficiency

8
Initial Foundation
OEE OVERVIEW

The OEE Industry Standard gives a guideline in order to find ALL potential losses
in effectiveness.
An average machine in an average
factory runs about 35 to 45% OEE.
So it is losing 55 to 65% capacity!
While - not running
- running at reduced speed
- or producing parts out of spec.
How come then, that the average
reported numbers are way over 80%? www.oeefoundation.org
It is a matter of definition, What you are not looking for you will not find.

To really reveal the hidden machines in your factory, ALL Losses need to be
defined and visualized
9
Why use OEE?
OEE OVERVIEW

Productivity Increases of 10-50%

Reduce Unplanned Downtime
Reduce Setup and Changeover Times
Better Management of Resource Allocation,
Planning and Scheduling
Operator Productivity Increases
Efficiency with Automated Data Collection
Better Root Cause Analysis
Improve Quality, Minimize Rejects
Identify Bottlenecks and Constraints
Improve On-Time Delivery
Manage Operations Pre-emptively & Proactively
Measurably Improve Profitability

10
Why use OEE?
OEE OVERVIEW

 OEE is integral to Successful LEAN manufacturing

 Used adroitly, Strategic OEE means Millions of $$ of Profits

 ‘Financial OEE’ becomes a Navigational tool for Success

 OEE = Quality, Reliability and Manufacturing Best Practices

 World Class OEE = “Least Price Provider” of products

11
Why use OEE?
OEE OVERVIEW

OEE is about Adding Value

Characteristics of Top Quartile Manufacturing Organizations
OEE is the visual metric of Total Productive Manufacturing

OEE
TPM is integrated to successful LEAN Manufacturing

OEE
 Constantly improving their ‘Best Ever’ performance

OEE
 Synergizing every player’s contribution

 Effectively Communicating new ideas or conditions

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Why is OEE so important?
OEE OVERVIEW

 If you were told that your department was running flat out you
might reasonably assume that the equipment was running
efficiently and effectively.
 What if the equipment only ran for 65% of the time?
 What if when it ran it ran at 80% of its speed ?
 What if only 90% of the parts it made are good?
 Individually these performance measures seem to indicate an OK
piece of equipment, but is it a true picture?
 What is having an impact on these performance figures?

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Root Cause Analysis
OEE OVERVIEW

The causal or Problems How deep are you

willing or able to dig?
contributing factors
that, if corrected, Are defined in terms of their...
would prevent Effects
recurrence of the
identified problem. But this is only what we see on the surface

our habits and work procedures

The “true” reason
that contributed to Causes
the creation of a What is happening under the surface?
problem, defect or what is causing our habits and work procedures
nonconformance.

Root Cause
A root cause is a blind spot beyond our reach
they are hidden deep down, they feed into or create many of the causes that we see under the surface

14
What is the Business Case?
OEE OVERVIEW

OEE and the effect to the Bottom Line

Business Case
Revenue: $ 10,000,000.00 (estimated)
Current state OEE: 60% (assumed)
Income from Operations (IFO): $ 1,000,000.00 (assumed)

A 10% improvement in OEE (capacity utilization) will increase IFO 22% (Bob Hansen, Overall Equipment Effectiveness, pp 47 – 66).
A 22% improvement to an IFO of $ 1,000,000.00 is $ 220,000.00
Monthly that equates to $ 18,333.33 left "on the table"

The assumed figures may be quite conservative, however they do prove a point.
The ROI for our solution is three to six months depending on the number of machines monitored.
After the ROI period there is at least $ 18,333.33 every month added to the bottom line.
Without implementing a solution such as MERLIN, you are losing $ 220,000.00 in additional IFO every year.

15
How do we use OEE?
OEE OVERVIEW

 OEE is only a measure, its benefits will be lost if the shortfalls it

identifies are not acted upon.

 OEE is a total measure of performance but the data used to produce it

must be used to prioritise improvement tasks.

 The purpose of measurement is to identify losses, remove waste and

drive improvement.

 OEE should be used to support the Total Productive Maintenance

(TPM) approach and the tools it supplies.

16
How do we use OEE?
OEE OVERVIEW

Keith Mobley, UPTIME Magazine

 “Too many corporations are run based on the instincts of its executives rather
than on data that define a true picture of the market and operating
performance of the plant.”

 “One absolute that I have learned is that sustainable change must be lead
from the top of the organization. ……….. Simply stated, change must be led
from the top and implemented from the bottom.”

 “The first hurdle that must be overcome is simply convincing the workforce
that there is a need for change. ……… ‘profit hides inefficiency and
ineffectiveness’”

 “No one in a profitable company, even when profits are marginal, ever asks
how much profit we are leaving on the table?”

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What are the benefits of OEE?
OEE OVERVIEW

FOCUS
 Highlight priorities for change.

SIMPLICITY
 Even complex processes can be measured.

FEEDBACK
 Before and after change.

BENCHMARKING
 Objective comparisons.

TARGET SETTING
 Setting achievable goals.
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How do I measure OEE?
OEE OVERVIEW

OEE =

AVAILABILITY

x PERFORMANCE

x QUALITY
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How do I measure OEE?
OEE OVERVIEW

Overall Equipment Effectiveness

OEE % = Availability x Performance x Quality
Shows group or plant output as a percentage of maximum capacity
World Class = 85% (= 95% x 95% x 95%)
It is not uncommon to > 90%!
Availability %
Percentage of scheduled time that the operation is actually operating.
Availability % = Run Time / Scheduled Time
Performance %
Speed at which the Work Center runs as a percentage of its designed
speed or ideal cycle time or most often considered the “Standard”.
Performance % = (Parts Made x Standard) / Run Time
Quality %
Good Units produced as a percentage of the Total Units Started.
Quality % = Good Units / Units Started
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How do I measure OEE?
OEE OVERVIEW

REQUIRED: GOOD SHOP FLOOR DATA FOR QUALITY ANALYSIS

Data Calculations
Availability = C/B Utilization = C/A
OEE = D/B TEEP= D/A

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What does that mean?
OEE OVERVIEW

OEE is a Key Performance Indicator (KPI) that can measure the

impact of change on a process caused by eliminating process, or
equipment losses

OEE is used to measure the performance of equipment and the

process - not the operator.

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What does that mean?
OEE OVERVIEW

Organizations that train and strategically use the OEE Tools and
methods presented in the modules have a clear roadmap to quickly
achieve “Top Quartile” competitive advantage in their line of business.

‘Top Quartile’ Winning Teams have

common best practices;
 Detailed Measurement of their performance

 Constantly improving their ‘Best Ever’ performance

 Synergizing every player’s contribution

 Effectively Communicating new ideas or conditions

 Being the Provider of Choice re: Price and Delivery

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What does that mean?
OEE OVERVIEW

Make visible specific machine

status for everyone

24
What does that mean?
OEE OVERVIEW

T&T Oct. YTD Vol and Maint. Labor $

Vol YTD Oct Proj. Vol Sept-Oct TSNS Maint. Labor YTD Oct

100% 100%
90% 90%
80% 80%
Total YTD Vol

70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
WC Number

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Pareto Analysis
OEE OVERVIEW

What Is It? When Do I Use It? How Do I Use It?

Pareto Analysis is a  A Pareto Analysis can be  Data should be

data graphing analysis applied to projects of all gathered regarding
based on the Pareto sizes where quantifiable the problem to be
principle which data exists on the process. solved and the
focuses on identifying It is often one of the first various factors that
the 20% of sources means of testing a may be affecting it
that result in 80% of hypothesis
the problems  This data can the
 It is particularly useful for be placed in
large scale projects where Microsoft Excel,
analysis must be focused sorted, and placed
Who Should Use It? on those areas most likely into a histogram for
 This analysis can be to be causing problems easy analysis and
conducted by  A Pareto analysis should be viewing
anyone on the team used in the Measure and/or
Analyze phases
26
What does that mean?
OEE OVERVIEW

27
OEE and the Six Big Losses
OEE OVERVIEW

Equipment Six Big Losses

Planned Downtime
Total Available time

1 Breakdowns
Available time
2 Setup / adjustment
Available operating time
3 Idling / minor
Actual operating stoppages
time
4 Speed
Effective
operating Defects in process
time 5
and rework

6 Start up losses
28
Availability
OEE OVERVIEW

“The percentage of time equipment is

actually running when we need it”
AVAILABILITY= AVAILABLE TIME – UNPLANNED DOWNTIME x 100%
AVAILABLE TIME
Where:-
Available Time = Total Available Time – Planned Downtime*
*Note :- Planned Downtime could be PM, no scheduled work, breaks, etc.

1 Breakdowns
Available time
2 Setup / adjustment
Available operating time

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Planned vs. Unplanned Downtime
OEE OVERVIEW

Planned
 Excess capacity.
 Planned breaks.
 Planned Maintenance.
 Communications briefs / team meetings.

Unplanned (Losses)
 Breakdowns.
 Set Ups and Adjustments.
 Late deliveries (material).
 Operator availability.
Note :
Planned time such as breaks, meetings and maintenance can be considered
as losses (useful for encouraging ideas on how to minimise their disruption)
as long as a consistent approach is taken.
30
Productivity
OEE OVERVIEW

“The difference between the

potential output and actual output,
when the equipment was available”
PRODUCTIVITY = IDEAL CYCLE TIME x ACTUAL OUTPUT* x 100%
AVAILABLE OPERATING TIME

*Note :- Actual Output is the Quantity of good & bad parts

Available operating time 3 Idling / minor

stoppages
Actual operating 4 Speed
time

31
Operating Speed vs. Productivity
OEE OVERVIEW

Operating Speed Rate

 The % of actual cycle time against ideal cycle time.

Productivity
 The Operating Speed Rate factored with interruptions to constant
processing, i.e. idling and minor stoppages.

32
Quality
OEE OVERVIEW

“The total good parts produced expressed

as a % of the total parts produced”

QUALITY= PARTS MADE – DEFECT QUANTITY x 100%

PARTS MADE

Actual operating
time 5 Defects in process
and rework

Effective
operating 6 Start up losses
time

33
Processed vs. Defect Quantity
OEE OVERVIEW

Parts Made
 The total quantity of parts produced in the available time

Defect Quantity
 The quantity of parts that did not meet the required standard
(including rework) in the available time

34
OEE and the Six Big Losses
OEE OVERVIEW

Equipment Six Big Losses

1 Breakdowns
Available time
2 Setup / adjustment
Available operating time
Idling / minor
3 stoppages
Actual operating
time 4 Speed

Effective
operating Defects in process
5 and rework
time

6 Start up losses

35
Six Big Losses – What Are They?
OEE OVERVIEW

Six Big Losses

The time lost due to key equipment
1 Breakdowns breaking down or deterioration
which causes the production to be
stopped for more than 10 min.
2 Setup / adjustment

3 Idling / minor
stoppages

4 Speed

5 Defects in process
and rework

6 Start up losses

36
Six Big Losses – What Are They?
OEE OVERVIEW

Six Big Losses

The time lost through “product
1 Breakdowns change over and adjustment ” to
the point where the production of
the new product is completely
2 Setup / adjustment satisfactory.

3 Idling / minor
stoppages

4 Speed

5 Defects in process
and rework

6 Start up losses

37
Six Big Losses – What Are They?
OEE OVERVIEW

Six Big Losses

The time lost through key
1 Breakdowns equipment being stopped for less
than 10 min.

2 Setup / adjustment
Time lost during the standard
cycle when the equipment is not
3 Idling / minor adding value.
stoppages

4 Speed

5 Defects in process
and rework

6 Start up losses

38
Six Big Losses – What Are They?
OEE OVERVIEW

Six Big Losses

The time lost through key
1 Breakdowns equipment not producing parts at
its optimum rate.

2 Setup / adjustment

3 Idling / minor
stoppages

4 Speed

5 Defects in process
and rework

6 Start up losses

39
Six Big Losses – What Are They?
OEE OVERVIEW

Six Big Losses

The time lost through key
1 Breakdowns equipment not producing parts
that meet the specified quality
standard.
2 Setup / adjustment

The time lost through key

3 Idling / minor equipment being utilised to rework
stoppages
sub-standard parts.

4 Speed

5 Defects in process
and rework

6 Start up losses

40
Six Big Losses – What Are They?
OEE OVERVIEW

Six Big Losses

The time lost through key
1 Breakdowns equipment not producing parts to
the specified quality standard,
following start up and before the
2 Setup / adjustment equipment achieves controllable
production conditions.

3 Idling / minor
stoppages

4 Speed

5 Defects in process
and rework

6 Start up losses

41
“Support the Internal Customer”
OEE OVERVIEW

Quality Check

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42
“Support the Internal Customer”
OEE OVERVIEW

Tools required
Login / Logout of support Staff via “Operator
Portal” application.
Email support from the “Operator Portal”
application via operator request to the requested
support personnel
Visualization tools to depict exactly what the
status is on the shop floor of each monitored
asset to management, operators, and support
staff
Utilize the report generator and auto report
scheduler to send out utilization and production
reports regularly to review daily and weekly
progress opposite set benchmarks.

43
“Support the Internal Customer”
OEE OVERVIEW

Tools required Encouragement to adopt the cultural change

necessary to fully implement. Set benchmark goals
and start on the path to achievement.
Enforce the rules such as operator and resource
Login / Logout.
Allocation of required support resources who are
charged with responding to operator initiated
support requests.
Issue required email capable handheld devices to
shop floor support personnel so that they can
respond to operator requests in a timely manner.
Regular review of operator requirements to ensure
system meets expectations
Review data collected, revisit benchmarks, ensure
that changes made are sustainable and permanent.
44
OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

OEE

BASICS

45
OEE Overview
OEE OVERVIEW

OEE combines manufacturing aspects of:

 Availability – Actual uptime vs. scheduled time

 Performance – Speed factor, actual rate vs. ideal rate

 Quality – Good units vs. total units

OEE = Availability × Performance × Quality

TEEP = Utilization × Performance × Quality

OEE and TEEP directly correlate to the amount of good product produced
(transferred) versus total possible product.

46
OEE Overview
OEE OVERVIEW

OEE (Overall Equipment Effectiveness) is the measure of the amount of

good product produced compared to the amount of product that could
have been produced if the manufacturing system operated perfectly for
its entire scheduled time.

Total Effective Equipment Performance (TEEP) is the measure of the

amount of good product produced compared to the amount of product
that could have been produced if the manufacturing system operated
perfectly for the total time (calendar time) over the time period under
consideration.

47
OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

2. Maintenance/Production OEE Tools

OEE

BASICS TOOLS

48
OEE Overview
OEE OVERVIEW

TPM Breakdowns Setup & Idling Reduced Quality Reduced Yield

(OEE) Adjustment and Speed Defects From Startup
minor
Toyota Prod. System Stoppage
Implementing Flow
Process
Eliminating Defects
Stockless Production
Reduced Lot Size
Quick Setup
Standard Cycle Times
Standard Production
Sequence
Standard Idle Time
Visual Control and on
Line Stop Alarm
Improved Machine
Operability
Improved Maintainability
49
How to collect data for OEE
OEE OVERVIEW

Key Points:
 OEE is a measure of the equipment or process, not the operators
productivity.
 Keep it simple.
 Ensure the process of measuring and applying OEE involves the people
who use the equipment.
 Make data collection second nature not a hindrance.
 Understand the process.
 Obtain the data on fixed frequency.
 Snap shot v continuous.
 Units of time (1 min, 10 mins, 30 mins, etc.).
 Automatic or manual data collection.
 Ownership.
 Partnership – those completing sheets and those collecting/collating.
 Regular communication of results.
 Response to trends, peaks and troughs.
50
How to collect data for OEE
OEE OVERVIEW

Example: Three Hourly Data Sheet

51
How to collect data for OEE
OEE OVERVIEW

AVAILABILITY
Gross Time (in minutes) A
Planned Down Time (in minutes) B
Net Available Time (in minutes) C=A-B
Non planned stoppages (in minutes) D
Operating Time (in minutes) E=C-D
AVAILABILITY F = E/C

PRODUCTIVITY
Output G
Standard Cycle time (mins/ unit) H
PRODUCTIVITY I= (HxG)/E

QUALITY
Defect Quantity J
QUALITY K = (G-J)/G

52
Connected Manufacturing
OEE OVERVIEW

Tec
“Following the computer and the Internet, hn olo
every machine tool will become a node on the gic
al Connected
network creating greater efficiency.” S hif Manufacturing
t Model

Internet
cooperative Universal
computing Machine
networked Connectivity
universal
personal
computer
computing
connectivity
distributed
open systems &
computing
client servers
batch computing
micros / PC’s
time sharing
minis The technology is here today, the tools are readily
available and cost effective
mainframes

1960 1970 1980 1990 2000 2010

53 53
Automated Data Collection
OEE OVERVIEW

54
 Machine Connectivity
ISA-95 Standards
Profit

Level 4 MS Dynamics AX

Mfg. Execution System

Level 3

Dist. Control System

Level 2

Connection
Level 1 Hardware
Abstraction Layer
Ax9150 UMI
Machine
Level 0 From AX: production plan, work
orders
To AX: production performance results

55
Exploring the Power of MES
OEE OVERVIEW

ADC + OEE = Profits

COLLATERAL BENEFITS OF MES
Statistical evaluation of variability (Goal Setting)
Best Ever Performance by Product/Process/Team
Modeling and Analysis of the “Hidden Factory”
Maintenance and Quality information
Timeline charting of key events
Learning Curve Information / Setting Planning Values

ADC = Automatic Data Collection

MES = Manufacturing Execution System
56
How to eliminate Losses?
OEE OVERVIEW

57
OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

2. Maintenance/Production OEE Tools

3. Financial OEE

OEE FINANCIAL
OEE

BASICS TOOLS

58
OEE Overview
OEE OVERVIEW

59
OEE Overview
OEE OVERVIEW

Financial OEE

60
OEE Overview
OEE OVERVIEW

The Power of Financial OEE to expose

the “Hidden Factory”
Practice Example Factory Scenario:
Current State Annual Volume = 223,650 units
IFO was $4,592,000.

 ‘Financial OEE’ Analysis: All Workstations at 85%

OEE, and 99.8% Quality Factor
 Volume increased by 33,787 units a 15 % increase
 IFO increased by $4,544,000 a 99 % increase

61
OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

2. Maintenance/Production OEE Tools

3. Financial OEE

4. OEE Data Analysis

OEE FINANCIAL
OEE

BASICS TOOLS ANALYSIS

62
OEE Overview
OEE OVERVIEW

OEE Data Analysis

Determine Variability, Capability

Develop ‘SMART’ Goals

Analysis of Target Alternatives

63
OEE Overview
OEE OVERVIEW

OEE Data Analysis

1. OEE: The Seen and Unseen
2. Real-time Performance Measurements - databases
3. Exposing Variability; Determining Capability
4. Developing OEE Performance Curves
5. Setting ‘SMART’ Goals for Improvement
6. Data Analysis for Target Selection
7. Consensus Building using Cross-functional Teams
8. Combining Subjective-Objective data into a
Decision Table

64
OEE Overview
OEE OVERVIEW

Learning to ‘see’ OEE

 As a Strategic Tool and a Monitoring Tool

 As a Reliability metric and a Business metric

 As a leading metric and a lagging metric

 Using OEE as a ‘fair’ benchmarking metric

 Quantify the value of each OEE factor

65
Lean Thinking
OEE OVERVIEW

Lean Thinking Management System Model

The Lean Management System Model reflects graphically, the
integration of Hoshin Kanri (Strategic Deployment), Deming’s PDCA
Wheel (plan–do–check–act) four-step model for carrying out change with
the Toyota Way 2001 principles (Continuous Improvement and Respect
for people), and how the lean management system is driven by customer
requirements and level of satisfaction.

The Lean Thinking Management System is used to implement the 5

Elements of Lean Thinking.
66
The Deming Cycle
OEE OVERVIEW

...Data based problem solving

Typical PDCA: High Velocity Organization PDCA:
Plan quickly Plan deeply
• Address Symptoms • Discuss actual situation and target with
everyone affected
Do immediately • Really understand/model the problem
• Jump to conclusions and its root cause
Check roughly Do many quick experiments
Act pretty much the way • Validate your thinking
you did before
Check implications carefully

Act systematically
• Update and deploy standards and
checklist disciplines
67
 Lean Six Sigma
OEE OVERVIEW

Balance and Complexity and Increase Reliability

• Lean and Six Sigma are natural allies in pursuit of
business performance improvement
• Lean reduces process and business complexity
Simplicity (Lean)

Simple, low reliability Simple, high reliability

Complex, low reliability Complex, high reliability

• Six Sigma increases

process reliability and enterprise effectiveness
an
Le Lean and Six Sigma amplify each other and
ise
•
r
rp accelerate strategic benefits
te
En • Together, Lean and Six Sigma offer a significantly
Reliability higher probability of success
(Six Sigma)

68
Current Condition
OEE OVERVIEW

…Ask what we already know

Specific, detailed, quantitative, concise
 Tables, graphs, histograms, value-stream maps, diagrams
 Highlight exactly where problem occurs
 Baseline to compare to metrics after countermeasures are
applied

Engage everyone affected by or causing symptoms

Build Consensus on what is
 Symptoms / Undesirable Effects everyone can see
 Foundation of authority to experiment with
countermeasures

Update as understanding improves

69
Goal – Next Target Condition
OEE OVERVIEW

…Model what we expect

What baseline change is wanted?
 What does perfect look like?
 What does the organization need?
 Realistically attainable target condition?
Mentor ensures that the owner has both

Plausible Hypothesis
 Based on best available model/understanding of how
the system works/could work

Consensus among stakeholders

 Target is attainable and desirable.
Update as root cause and countermeasures developed
70
Root Cause
OEE OVERVIEW

…Model Cause & Effect

Identify underlying problem(s) causing symptoms
 Root cause is typically faulty thinking or assumptions
Addressing the root cause(s) improves all levels of
symptoms/undesirable effects/visible damage.

Build consensus among stakeholders

 Broad agreement on Cause & Effect network
 Reflect best current knowledge about how things work

Some techniques: (explained of following slides)

 Fishbone Diagram
 5 Whys
 Histograms
 Pareto Analysis
 Root Cause Analysis
71
Root Cause Analysis
OEE OVERVIEW

What Is It? When Do I Use It? How Do I Use It?

A tool used to identify When a problem is not easy to Involve a team to

contain and analyze a define without considerable collect and analyze
problem, defining the analysis data using other
root cause, defining and
While a root cause analysis can problem solving tools
implementing actions to such as Pareto, 5
minimize or eliminate the be used in any phase of a
continuous improvement whys , brainstorming
root cause and etc.
verification that project, it is most commonly
corrective action deployed in the Define and
prevented recurrence of Improve phases
then problem.

Who Should Use It?

A root cause analysis can be completed by anyone on the project team
It is recommended that project leaders be involved in its creation to ensure
coordination of the analysis
72
Root Cause Analysis
OEE OVERVIEW

The causal or Problems How deep are you

willing or able to dig?
contributing factors
that, if corrected, Are defined in terms of their...
would prevent Effects
recurrence of the
identified problem. But this is only what we see on the surface

our habits and work procedures

The “true” reason
that contributed to Causes
the creation of a What is happening under the surface?
problem, defect or what is causing our habits and work procedures
nonconformance.

Root Cause
A root cause is a blind spot beyond our reach
they are hidden deep down, they feed into or create many of the causes that we see under the surface

73
Root Cause Analysis
OEE OVERVIEW

Implement and Assess

Gather Data

Define Problem Create a Solution

Get to the Root Cause

It is not a straight forward There are tools you can
journey. You may end up use to stay on track
in a dead end. It requires and ensure you arrive
patience and persistence. at a right destination.
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OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

2. Maintenance/Production OEE Tools

3. Financial OEE

4. OEE Data Analysis

OEE FINANCIAL

5. OEE for Leadership

OEE

BASICS TOOLS ANALYSIS

VISION

75
OEE Overview
OEE OVERVIEW

OEE for Leadership

Where?

When?

What?

Why?

76
OEE Overview
OEE OVERVIEW

OEE for Leadership

Where?

$$ When?

$$$ What?

Why?

77
OEE Overview
OEE OVERVIEW

OEE for Leadership

78
OEE Overview
OEE OVERVIEW

OEE for Leadership

OEE Value Stream Analysis as a Strategic Tool

Where?

When?

What?

Why?

79
OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

2. Maintenance/Production OEE Tools

3. Financial OEE

4. OEE Data Analysis

OEE FINANCIAL
OEE

5. OEE for Leadership BASICS TOOLS ANALYSIS

6. OEE Value Stream Mapping

VISION

80
OEE Overview
OEE OVERVIEW

OEE Value Stream Mapping

WHERE

BENE
FIT $
$$
, WHEN
WHICH

, WHA
ALTERN

T TOOL

TIME
ATIV

, W

81
OEE Overview
OEE OVERVIEW

OEE Value Stream Mapping

Maximizing IFO though strategic analysis
Strategically Focused Targets, Aligned and Engaged from
top to bottom, Solves the Success Riddle

82
Value Stream
OEE OVERVIEW

The entire set of activities across all parts of your

organization involved in delivering your product or service.
• Identify how you are delivering value to the “CUSTOMER”.
• Both value added and non-value added activities.
• Focus on reducing or eliminating non-value added activities.

83
OEE Overview
OEE OVERVIEW

OEE Value Stream Mapping

Drill
And
Buff
Assemble
Rough Sand
Cut & and C & Palletize
Shape Paint Product A
Product B
A B
Drill E
and Product C
Buff
D

84
OEE Overview
OEE OVERVIEW

Understanding the Power of OEE

1. Learning the Basics of OEE Metrics

2. Maintenance/Production OEE Tools

3. Financial OEE

4. OEE Data Analysis

OEE FINANCIAL
OEE

5. OEE for Leadership BASICS TOOLS ANALYSIS

NEW

6. OEE Value Stream Mapping

TOOLS VISION

SHIFT BUSINESS
GOALS GOALS

7. OEE Value Stream Analysis

$$$$ $$$$$$

85
OEE Overview
OEE OVERVIEW

OEE Value Stream Mapping

A B E

86
OEE Overview
OEE OVERVIEW

OEE Value Stream Mapping Product A

C Product B

A B E Product C

D Product D

87
 OEE Overview
OEE OVERVIEW

IFO BENEFITS TABLE #’S IN 1,000’S BASE CASE IFO = $4,592

WC’S A B C D E
+3 Pts, Same Vol.
Vol. = 223,650 $42 $48 $12 $13 $28

+3 Pts, and
Refill the Factory $625 $48 $12 $13 $28
Vol. = 233,615
(+9,965 units)
Improving WC A has the possibility of 13 times more value
than any other WC for the condition of +3 OEE Pts. higher
Availability/Reliability From 68.0 % to 71.0 %

88
OEE Training
OEE OVERVIEW

Understanding the Power of OEE

 14 Modules will cover the 7 study areas

 Each Module will bring game changing tools for application

 In total, the Best Business Strategy is revealed

$$$$
$$
89
OEE Training
OEE OVERVIEW

OEE-College.com Training Modules

The Overview module demonstrates the Delivery Format
Each Area of Study is contained in an individual CD
Each module on the CD is a narrated PPT Presentation
Modules are provided both With and Without the ‘Refocus Game’
Modules are ≈40 min. leaving 10-15 min. for group discussion
The ‘Practice Factory’ Base Case excel workbook example templates and
14 “What IF?” investigations are provided on the final CD. The
workbooks can be adapted to model your specific Product Flow
lines and generate your ‘Financial OEE’

90
OEE Training
OEE OVERVIEW

OEE-College.com Training Modules

Recommended use of the training modules would be:
Designate Productivity Improvement Leaders for High Value Line of
Business (LOB) flow lines on your plant site. These individuals
should become familiar with the Practice Factory example
workbooks and be able to generate new Base Case workbooks and
Benefits Tables specific to their LOB flow line.
All of the Plant Leadership should review all of the modules to gain
knowledge and understanding of the critical steps for Financial OEE
so everyone is one the same page.
Shop floor people should review at least the first 5 areas of study and
practice applying all of the ‘Tools’ at their workstations.

91
OEE Training
OEE OVERVIEW

OEE-College.com Training Modules

The OEE-College.com set of Training Modules cover 7 key areas of
Study that span from OEE Basics to Financial OEE.

Financial OEE is a New Tool for Plant Leadership Teams to expose

exactly where to apply resources for the highest Return On Investment
(ROI) relative to a stipulated Product Mix.

Financial OEE Overview

Understanding the Power of OEE

By Robert C. Hansen, PE., CMRP, Author
Owner RC Hansen Consulting, LLC
970-490-1720 cell 970-481-3145
[email protected] 92
OEE Summary
OEE OVERVIEW

Increase manufacturing efficiency 10 - 50%

Critical metric of TPM
World Class Best Practices
Visibility
Culture of Productivity

$$$$
$
Competitive Edge
Profitability increase 20 – 300%
93
Questions and Answers
OEE OVERVIEW

94
Introduction to OEE
OEE OVERVIEW

$$$$
The Power of OEE

$
Generate more Profits

John Rattray
Memex Automation Inc.
905-635-0590 cell 416-460-7637
[email protected]
95