OEE (Overall Equipment Effectiveness) | Calculation of OEE with Example

 OVERALL EQUIPMENT EFFECTIVENESS (OEE)

• It is a measure of how well a machine is performing as compared to its capacity during scheduled runs.

• It is a measure of how well a manufacturing operation is running.

• It measures the effectiveness of manufacturing operation in order to improve the process and increase productivity.

• It is the calculation made by SEIICHI NAKAJIMA in 1960's in Japan.

• It helps to identify a problem and losses in manufacturing operations.

• It is the best practice to improve the performance of machines and manufacturing operations.

• It is measured in percentage (%).

• It focuses on continuous improvement process.

• It is expressed as OEE = A×P×Q , where A → AVAILABILITY, P → PERFORMANCE and Q → QUALITY.

• If OEE > 85% means the equipment is performing on a WORLD CLASS LEVEL.

CALCULATION OF OEE WITH EXAMPLE

As OEE = AVAILABILITY × PERFORMANCE × QUALITY 

AVAILABILITY = (Available Time − Downtime) ÷ Available Time 

where Available Time = Total Time − Planned Downtime

Planned Downtime = Time Lost in Lunch Breaks, Meetings and any other Regular Scheduled Breaks. 

Downtime = Time Lost in Breakdowns, Repairs, Changeover, Adjustments, Setup etc.

PERFORMANCE = (Running Time − Performance Loss) ÷ Running or Operating Time

OR 

PERFORMANCE = (Standard Cycle Time × Quantity of Product Produced) ÷ Running or Operating Time

where Performance Loss = Time Lost Due to Reduced Speed, Long Cycle Time, Minor Stoppage.

Running Time = Total Time − (Planned Downtime + Downtime)

QUALITY = (Productive Time − Quality Loss Time) ÷ Productive Time 

OR

QUALITY = (Total Quantity Produced − Defective Quantity) ÷ Total Quantity Produced

where Quality Loss Time = Time Lost Due to Quality Issues.

Productive Time = Total Time − (Planned Downtime + Downtime + Performance Loss)

14 Ways to Boost PRODUCTIVTY in an Organization

 How to Increase Productivity in an Organization

• By minimizing the wastage of materials.

• By minimizing or reducing the breakdown of machines.

• By proper inventory control.

• By efficient utilization of all the resources like men, machines and materials.

• By proper design of components.

• By reducing the downtimes.

• By using Lean Manufacturing Tools like Kaizen, 5S Methodology, 6 Sigma, PDCA Cycle, Overall Equipment Effectiveness (OEE), Just In Time (JIT), Total Productive Maintenance (TPM).

• By application of Work Study, Method Study, Time Study and Motion Study.

• By eliminating the 8 Wastes of Lean.

• By educating & motivating the employees through proper training sessions from time to time.  

• By satisfying all the employees/workers.

• By setting up the daily/weekly/monthly production target.

• By proper effective communication between employer and employees.

• By increasing the work time through day and night shifts.

5S Implementation in WORKPLACES | Concept and Tips

 5S Methodology

• 5S is a Japanese concept which was first practiced in "TOYOTA PRODUCTION SYSTEM" by "HIROYUKI HIRANO". 

• 5S system is a Lean Manufacturing Tool that improves "workplace efficiency" and eliminates waste in an organization.

• 5S is a systematic approach of organizing and maintaining the workplaces. 

• The term 5S comes from 5 Japanese words i.e. :

1. SEIRI     
2. SEITON
3. SEISO
4. SEIKETSU
5. SHITSUKE

• In English these Japanese words are translated as:

1. SORT 
2. SET IN ORDER
3. SHINE
4. STANDARDIZE
5. SUSTAIN

• These five steps process of 5S can improve overall functions of an organization which are explained below:

SORT (SIERI)

It is often called the "Red Tagging" i.e. remove unnecessary/unwanted items and materials from each area.

SET IN ORDER (SEITON)

Organize the tools, equipment and other items in its identified place so that the workers can easily reach them means "a place for everything and everything in its place".

SHINE (SEISO)

Cleaning the workplace regularly including tools, equipment and machinery.

STANDARDIZE (SEIKETSU)

Standardize the processes used to sort, order and clean the workplace i.e. standardize the above 3 steps by regular site site checks and routine inspections.

SUSTAIN (SHITSUKE)

It implies/indicates "self discipline" of workers i.e. "do without being told". It ensures 5S approach is followed properly by maintaining and continuing all steps.

6S Concept

• 6S is a modification of 5S methodology which includes "Safety" as a 6th S. 

• All are same as discussed in 5S except "safety" step which is explained below:

SAFETY

It ensures "safe workplace" by identifying and eliminating all hazards (which can cause harm) for zero accident. All safety equipment like fire extinguishers, emergency exit signs, first aid kits, smoke detection etc. should up to date and in good working conditions.

WORK Study, METHOD Study, TIME Study and MOTION Study : General Overviews

 WORK STUDY

• Work Study is the analysis of a Job/Work in order to develop a new, better and standard method of doing a Job/Work or performing a task and also determining the standard time to perform it by standard method.

• The ultimate aim of Work Study is to increase the productivity of an organization.

• Work Study comprises of two parts to study i.e. Method Study and Time Study (Work Measurement).

METHOD STUDY

• It is the analysis of present method of doing a Job/Work in order to develop a new, better and standard method of doing Jobs that are economical, safe and require less human effort. 

• It is also sometimes called as work method design.

TIME STUDY ( WORK MEASUREMENT)

• It is a Work Measurement activity usually conducted to find out the standard time for performing tasks or completing the Jobs/Works.

• It sets the standard time for workers to complete the task.

• It is conducted with the help of Stop Watch.

MOTION STUDY

• It is conducted to find out the total movement of workers while they are performing a task in order to eliminate wasteful and unproductive movements of workers to increase their efficiency level.

• It is conducted with the help of CCTV Camera which keeps an eye on workers movements.

KAIZEN (Japanese Concept) | Main Objectives of KAIZEN

KAIZEN

• KAIZEN is a Japanese concept which can be defined as a continuous effort by each and every employee (from CEO to field staff) to improve all the functions, processes and systems of a particular organization.

• Its a continuous process for continual improvement.

• It was first practiced in Japanese industry i.e. TOYOTA PRODUCTION SYSTEM.

• MASAAKI IMAI was the founder of KAIZEN.

• It comes from two Japanese words. First is KAI which means "Improvement" and second is ZEN which means "Goods."

• It is a Lean Manufacturing Tool that improves quality, productivity, safety and workplace culture.

• It can be implemented by PDCA Cycle i.e. Plan → Do → Check → Act Cycle which is also known as Deming Cycle or Shewhart Cycle.

• PDCA Cycle can be understood by the figure given below:

Objectives of KAIZEN

• To reduce or eliminate the Wastes and quality defects from organization.
• To increase the productivity of an organization.
• To increase the efficiency and educating the employees.
• To eliminate unnecessary hard work.
• To satisfy the customers by providing them higher quality products and services.
• To satisfy all employees of an organization.
• To humanize the workplace and making it more safer. 
• To ensure On Time Delivery of products with zero defects.
• To standardize the work of an organization.

LEAN MANUFACTURING | 8 WASTES (MUDA) OF LEAN MANUFACTURING

LEAN MANUFACTURING OR LEAN PRODUCTION

• Lean Manufacturing or Lean Production is a systematic approach in an organization that focuses on identifying and eliminating the WASTES or NON-VALUE ADDED ACTIVITIES while simultaneously maximizing the productivity and value added activities.

• Lean Manufacturing was first introduced in Japanese industry i.e. "TOYOTA PRODUCTION SYSTEM" and still they used it.

• KAIZEN, 5S methodology, PDCA cycle, OEE, JIT, TPM, TQM are most useful Lean Tools.

DEFINITION OF WASTE IN LEAN MANUFACTURING

In Lean Manufacturing, WASTE refers to any activity that does not add value i.e. NON-VALUE ADDED ACTIVITIES. It only adds time and cost. In Japanese term Waste is known as MUDA.

8 WASTES OF LEAN MANUFACTURING

First there were 7 wastes which was developed by TAIICHI OHNO, the Chief Engineer at TOYOTA PRODUCTION SYSTEM. These were:-

Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing, and Defects. Later 8th Waste i.e. Skills (Non-utilized talent of workers) was introduced in 1990's and became total 8 Wastes of Lean Manufacturing in an organization which are as follows:-

1. TRANSPORTATION                          
2. INVENTORY
3. MOTION
4. WAITING
5. OVERPRODUCTION
6. OVERPROCESSING
7. DEFECTS
8. SKILLS

We can use trick to remember all the wastes by term TIMWOODS as shown in above figure.

All the Wastes of Lean are explained below:-

TRANSPORTATION 

Unnecessary movement of products and materials are termed as Waste which increases the cycle time and costs. So, avoid unnecessary Transportation for eliminating Waste. 

INVENTORY

Lots of Inventory or excess Inventory like excessive raw materials, finished goods (more than customer demand) are termed as Waste. So, efficient use of Inventory can reduce this waste.

MOTION

Unnecessary movement of workers, equipment and machinery are termed as Waste which increases the cycle time and costs. So, minimized unnecessary Motion.

WAITING 

Waiting for the raw materials, tools & equipment, waiting for the next process step to occur, waiting for the instructions to start manufacturing, waiting for the E-mails, waiting for a computer to load program are termed as Waste which increases cycle time, delays in product manufacturing and delivery. When inventory waits, customer waits.

OVERPRODUCTION

Producing or making more products than the customer's demand, working on the wrong priority products are termed as Waste which causes space blocked.

OVERPROCESSING

Doing more works, adding more components or having more steps in a product or service than what is required by the customer like cleaning and again cleaning the machines & materials than what is required and checking and again checking are termed as Waste which impacts delay in delivery. So, eliminate excess work.

DEFECTS 

Operator errors, mistakes in documents & drawings, inadequate training, incomplete inputs or incorrect inputs, unnecessary changes in decision are termed as Waste which is not fit for the use results in reworking on materials and products, delay in delivery, unsatisfied the customers, increases cost & time. So, reducing defects can reduce the Wastes.

SKILLS

Non-utilization of worker's talent, skill and knowledge, poorly trained workers, employees not knowing how to effectively operate equipment, placing employees in position below to their skills & qualifications are termed as Waste.