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What do you know about your
overall equipment effectiveness?
by Robert M. Williamson
Equipment performance and reliability are major concerns as businesses reorganize, downsize and aggressively pursue "lean" principles. Is your equipment doing what it's supposed to do the first time, every time? What are the causes of poor performance? What should you focus on?
Measuring and improving equipment performance is a hot topic in many facilities, manufacturing plants and processing plants. So, what do you know about your overall equipment effectiveness (OEE)? The basic measure associated with Total Productive Maintenance (TPM) is OEE. It incorporates three basic indicators of equipment performance and reliability:
Availability, or uptime (downtime: planned and unplanned)
Performance efficiency (actual vs. design capacity)
Rate of quality output
OEE isn't an exclusive measure of how well the maintenance department works. The design and installation of equipment, as well as how it's operated and maintained, affect OEE. It measures both your equipment's efficiency (doing things right) and effectiveness (doing the right things).
Here's an example on how OEE is figured for a critical piece of equipment. The equipment:
runs 70 percent of the time (in a 24-hour day)
operates at 72 percent of design capacity (flow, cycles, units per hour)
and, produces quality output 99 percent of the time
When you factor the three together (70 percent availability x 72 percent efficiency x 99 percent quality), the result is an overall equipment effectiveness rating of 49.9 percent. The OEE rating truly reflects how well the equipment is loaded and does what it's supposed to in this case, less than 50 percent. Running at 55 percent OEE meets plant requirements.
Given the OEE data, we can then determine the "cost of unreliability," or poor equipment performance. This is where it gets interesting. For example, a 5 percent decline in OEE may have led to 500,000 non-produced units in a year. And at a sales price of $12 per unit, the cost of unreliability is $6 million of lost sales (revenues). This helps make a strong business case for improving the care and upkeep of the critical equipment in question.
The OEE rating for critical equipment provides a relative comparison or "report card" on equipment performance and how well our maintenance and operations improvement activities are doing. The real use of OEE comes by using the factors (availability x efficiency x quality) and the actual losses to determine root cause and corrective action.
So, back to our example. What caused the 5 percent decline in OEE? What changed? This is where the factors of OEE become more important than the OEE percentage itself. By tracking and trending the factors of OEE (data), one quickly spots whether the machine experienced more downtime (planned or unplanned), or ran at a slower pace or minor stops, or produced more defects. Improper or inefficient operation can cause lower availability (setups, tool or part changing) as can improper maintenance (breakdowns). Root cause analysis begins by focusing on the type and extent of loss, not the OEE percentage rating.
Here are some additional ways to think about OEE in a variety of equipment settings:
Individual machine: The performance of the machine is only compared to itself over time (historical trending). Track and trend the OEE factors to observe changes in performance.
Integrated manufacturing cell: Regardless of the individual machine performance, the entire multi-machine cell must function as a single unit. OEE for the cell is a good relative performance comparison. Multiple product sizes dictate different production rates and, therefore, OEE ratings. Availability, efficiency and rate of quality for the individual machines in the cell allow the focus on root causes.
Discreet manufacturing: Individual machines and integrated cells must function in a variety of combinations to produce many different types and sizes of products. In lean manufacturing, synchronous manufacturing and plants with pull scheduling, production flows become leveled and depend on TAKT time, the rate of use of the customer. OEE can be misleading. However, the factors of OEE availability, efficiency and rate of quality become indicators of where and what type of improvements should be made.
Process plants: A process stream must perform as a whole, similar to an integrated manufacturing cell. OEE or "overall process effectiveness" (OPE) is a good relative performance comparison. Track and trend OEE factors to observe changes in performance of critical equipment in the process stream. In some processes, quality losses of "yield" and losses associated with transitions from one product to another become big opportunities for improvement.
Facilities: Utility systems in schools, hospitals and commercial buildings (HVAC, chilled water, steam, refrigeration, compressed air, etc.) typically function as individual machines or processes in support of a facility, and possibly other machines. In these cases, track and trend OEE ratings on the critical machines to observe changes in performance. Track the OEE factors:
- Availability measures uptime.
- Efficiency measures flow rates, volumes, etc.
- Quality measures pressures, temperatures, etc.
Overall plant comparisons: While it may be tempting to measure and report "overall plant effectiveness," it may be of little use when answering the questions, "How well are we doing?" and "Where do we need to improve?" And comparing OEE out of context proves little.
Remember, OEE is just a number for relative comparison of equipment performance. The real benefits come from using the factors of OEE, which lead to root cause analysis and eliminating the causes of poor performance. Its all about collecting, trending and analyzing the right data on your critical equipment performance and reliability. Learn more about OEE and reap the benefits of systematically identifying and eliminating the causes of poor performance in your plant or facility.
Bob Williamson is the president of Strategic Work Systems, a consulting firm with offices in Greenville, S.C., and Mill Spring, N.C. For more information, call , e-mail or visit www.swspitcrew.com.
MRO Today. Copyright, 2000.
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