oee for process improvement
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OEE for Process ImprovementTRANSCRIPT
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How the use of OEE can drive Operations
Excellence
Edward Brown
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
2
Process Improvement
Why OEE?
The Science of OEE
Guidelines
The Technologies
The Culture of OEE
April 24, 2009
Topics
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
3
Processes for Improvement
Which of the following Improvement Initiatives is in place, or formally planned to begin within 6 months, at your company? Recent survey of executives
85% - Asset Utilization or OEE Improvement 61% - General Continuous Improvement 54% - Six Sigma 46% - TPM 38% - Lean Manufacturing 38% - Predictive Maintenance 8% – Other: Software Integration
Process Improvement
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
4
The Processes only work when you have: Awareness
Knowing what to measure Knowing how to measure it Knowing what’s important
Accuracy Measurements in context What’s included What’s excluded
Responsibility Actionable Issues Assigned Empowerment Follow-Up
Making Process Improvement WorkProcess Improvement
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
5
How well do you know that KPI?
Existing KPIs May Be Inadequate
Failing to recognize the limitations of the existing plant performance measurement system.
What is included? What is excluded? Standard across areas or plants? How are Management incentives structured? Is Management more concerned with reporting a high efficiency
value rather than focusing on improvement?
Process Improvement
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
Can We Believe Our Numbers?
How efficient do you think your plant is?Many mfg companies believe they are 80-90% efficient And they are… the way they have come to measure themselves.
Most of these companies are really operating at only 30-60% of their true potential as measured by Overall Equipment Effectiveness (OEE) 85% OEE is “World Class”
Process Improvement
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
7
OEE Identifies and Organizes KPI’s
Equipment – Downtime, Speed, QualityMaterials – Availability, QualityLabor – Availability, Speed, Quality
Ability to Measure or Compare at any Level
Specific Machine or Working CellLine or Group of Machines/CellsProduction Area or Plant
The Way of OEE
Why OEE?
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
8
Overall Equipment Effectiveness Provides a framework for Manufacturing Process Improvement
New Product Development Product Changes Reducing Non-Value Added operations Developing Equipment Maintenance Strategies Equipment Reliability Practices Personnel Training Effectiveness Improved Root Cause Analysis Improving Limiting Constraints
April 24, 2009
Why OEE?
Why OEE?
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
9
OEE can be used by Teams to unlock “Hidden Capacity” found in almost every plant
OEE Savings Benefits Reduce Capital Expenditures Justify Capital Expenditures Reduce Labor Costs Reduce Scrap and Rework Reduce Inventory Costs
Unlocking Your Inner Super Plant
Why OEE?
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
10
Overall Equipment Effectiveness is becoming the de-facto standard for measuring the efficiency and capability of production processes with consistency
OEE Measures Three Critical Factors: Availability – Whether equipment, material, and
personnel are available for production
Performance – Whether equipment and personnel are performing to their capacity
Quality – Whether the product is being produced correctly the first time (first pass yield)
The Gold Standard
The Science of OEE
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
Capturing the TPM “Six Big Losses”
Major Losses OEE Category Notes
Major Breakdowns
Availability Loss
There is flexibility on where to set the threshold between a Breakdown (Availability Loss) and a Short Stop (Performance Loss).
Setup and Adjustments
Availability Loss Includes changeovers.
Short Stops/Idling
Performance Loss
Typically only includes stops that are under 5-10 minutes and that do not require maintenance personnel.
Reduced Speed
Performance Loss
Causes preventing the process from running at its theoretical maximum speed (minimum cycle time).
Startup Rejects
Quality LossBad products during warm-up, startup or other early production.
Production Rejects
Quality LossBad Products during steady-state operation.
The Science of OEE
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
12
A line with an OEE of 100% runs All of the time it is scheduled
No time loss for Changeovers, Cleaning, Breakdowns
Always runs at the full rated speed
No short stop failures
Has a 1st pass Yield of 100%
In A Perfect World
The Science of OEE
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
OEE – More than a Number
OEE Element Components
Availability Actual runtime / Available time
Production Rate Total production (good & bad) / theoretical limit
Quality Good quantity / Total quantity
98% yield alone is not
enough
98% yield alone is not
enough
OEE = Availability * Rate * QualityOEE = Availability * Rate * Quality
Example: (.77)*(.65)*(.98)*100% = 49% OEEExample: (.77)*(.65)*(.98)*100% = 49% OEEThe Science of OEE
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
14
World Class OEE
OEE = 85% is “World Class” Very challenging for a company to operate at
this level when OEE is measured accurately. We don’t see production lines that are
operating at 85% OEE But… we have seen lines operating in the 20 –
30% range!
OEE Factor World Class
Availability 90.0%
Performance 95.0%
Quality 99.9%
Overall OEE 85.0%
April 24, 2009
The Science of OEE
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
15
Reality Check
Majority of Plants operating at 30 to 40%. Day to day variation can be +/- 15% or more
Scheduling deviations Labor overtime Inventory accumulation
April 24, 2009
Number of SKU's OEE
Low SKU Count (1-2) 83%
Medium SKU Count (3-5) 80%
High SKU Count (6-12) 73%
Very High SKU Count (> 20) 63%
World Class Pharma OEE
The Science of OEE
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
16
Overall Suggestions
If you can’t measure it, you can’t (won’t) improve it! Use OEE measurements as part of Process Improvement program
Create Downtime Reasons that are Meaningful Machine Codes and Ad Hoc entries are a poor foundation
Set performance targets at achievable levels When was theoretical ever reached?
Develop an ability to calculate an Accurate Measure of the true capability of a production line Include all significant losses
Develop a written factory performance spec that precisely defines what is included, excluded, and special cases. To compare other plant/lines, all OEE measurements must be made in
same way
April 24, 2009
Guidelines
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
17
Set separate Improvement Targets for: Availability Performance Quality
April 24, 2009
Divide and Conquer
Guidelines
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
18
Set Separate Goals Reduce Availability Losses by 10-50%
on time basis
Reduce Performance Losses by 5-20% on time basis
Quality Improvement will vary depending on the process and industry (0.5%?)
Improve OEE by 5-10% per year (or more)
0
5
10
15
20
25
Hou
rs
Line1
Line2
Line3
Defect Loss
Perf Loss
Avail Loss
Sch'd DT
Run Time
April 24, 2009
Guidelines
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
Return on Investment
Baseline with 66.5% OEEBaseline with 66.5% OEE19 cases/minute/line 18,194 cases/day/line$ 14.00/case (wholesale) $ 254,722 day/line
OEEOEE
AvailabilityPerformanceQuality
AvailabilityPerformanceQuality
80%84%
99.0%
80%84%
99.0%
66.5%66.5%
BeforeBefore
85%86%
99.2%
85%86%
99.2%
72.5%72.5%
AfterAfter
+1,641 cases/day or $22,974/day+1,641 cases/day or $22,974/day
Revenue Improvement:Revenue Improvement:
$8.3 million/year$8.3 million/year
Guidelines
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
20
Automated Downtime Machine Downtime for emergency and short-stops Labor Tracking for personnel operation timing
Structured Downtime Reason Trees Categorized by product/operation/machine Drill Down Capability for Root Cause Analysis Basis for Process Improvement Charts
Automated Production Counts First Pass Yield Counts Rework Counts
Key Technologies
The Technologies
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
21
Automated Downtime
Relying on Manually Collected Data Entry errors Significant effort to collect and analyze
Making decisions based solely on Manually collected Downtime data Is notoriously unreliable.Are all hours of the day accounted for?Does it match up with actual product produced?Can it account for all the short stops occurring on a
typical line (most lines have 1,000 or more short stops / week).
April 24, 2009
The Technologies
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
OEE Without Automation?
Average Downtime
Manual (Before)
Automated (After)
Incidents 12 140
Duration (minutes) 15 <2
Total time 180 280
OEE* 79% 73%
Incidents Total time
Manual Phantom
*Theoretical based on 95% quality &
95% performance
Inaccurate Availability
Data Inflates OEE
Inaccurate Availability
Data Inflates OEEThe Technologies
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
23
Operator Input is Important
Selectively involve the operator…. Automate collection of OEE and the supporting downtime data so
that good decisions can be made regarding actions that will improve OEE. Time and again, clipboard data collection for OEE and Downtime info
has proven to be of little value Operators don’t time themselves Operators can’t perceive the effect of repetitive problems Changeover vs. shift change example
But, do not limit yourselves to the automation layer Can not always provide root cause Downtime reason selection by Operator IS powerful
April 24, 2009
The Technologies
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
Structured Downtime Reasons
The Technologies
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
Downtime Reasons and Drilldown
Equip Down Planned Maint
Line Stop Rejects0
5
10
15
20
25
Monthly to CurrentDowntime
Shift 1 Shift 2 Shift 3
Raw M
ater
ial S
horta
ge
Trans
fer E
rror
Quality
Hold
048
Line Stop Incidents
05
101520
Transfer Errors
The Technologies
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
26
Automate Production Counts
Collecting production counts is simple, effective means to determine First Pass Yields
Counting Rework cycles for an item more difficult, but can make dramatic improvements in Quality
The Technologies
April 24, 2009
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
27
Management involvement to set the Business Objectives and maintain program focus.
Ability to accurately measure productivity in Real-time. Ability to accurately capture detailed reasons for
efficiency losses, for corrective actions. Assign Responsibility to Issue Champion Empower Issue Champions to Solve Problems Ability to selectively involve the Operators. Web Reporting for easy distribution of current
performance to all parties. Maintain Issue and Resolution Histories
April 24, 2009
Eight Key Elements of Process Improvement
The Culture of OEE
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
28
There’s No “I” in OEE
Achieving RESULTS requires participation of the entire team. Get Operations, Production, Maintenance, Engineering, and Quality
on board right from the beginning.
April 24, 2009
The Culture of OEE
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
29
Conclusion!
Improved Productivity and Asset Utilization… Always result in savings that drop right to the Bottom Line
(earnings) Always result in Reduced Capital Expenditures In Good Times, unleashes unused capacity, so volume can
ramp up without requiring major investment in more plants, equipment, and employees.
In Bad Times allows plants to: Cut back to only those shifts that are necessary Reduce overtime expenditures Reduce waste Identify and sell under performing assets, reducing
depreciation and maintenance costs.
April 24, 2009
The Culture of OEE
OEE for Process Improvement
Process Improvement
Why OEE?
The Science of OEE
The Culture of OEE
The Technologies
Guidelines
30
Conclusion!
Improved Productivity and Asset Utilization…
Provides Data to make Suppliers more Accountable Equipment Suppliers Consumables / Raw Materials Suppliers
Gather Hard Data related to equipment performance. Identify equipment problems. Justify Capital Improvements or Asset Reductions.
Motivate Operators and Maintenance Team
Drive Uniformity in Plant Scorecard calculations.
April 24, 2009
The Culture of OEE
31
Questions?
Web Site: www.AvidSolutionsInc.com
Contact Information:
Ed Brown – 919.468.4334 x221
Eric Mayer – 919.468.4334 x202
April 24, 2009