1. Equipment Productivity By T.A. Khan January 2008

2. Overall Equipment Effectiveness In an ideal factory, equipment would operate 100 percent of the time at 100 percent capacity, with an output of 100 percent good quality. In real life, however, this situation is rare. The difference between the ideal and the actual situation is due to losses. Calculating the overall equipment effectiveness (OEE) rate is a crucial element of any serious commitment to reduce equipment- and process-related wastes through total productive maintenance (TPM) and other lean manufacturing methods like Operational Excellence, Six Sigma or World Class Manufacturing.

3. OEE (The six big losses)

4. Schedule Losses Losses Due to Planning Losses Due to Planning Forecasting Forecasting Initial Capacity Planning Initial Capacity Planning Production Planning Production Planning Execution Execution Skills Skills Machine Condition Machine Condition Material Quality Material Quality

5. Forecasting

6. Principles of Forecasting Forecasts are rarely perfect Forecast accuracy is: higher for shorter time horizons Grouped forecasts are more accurate than individual items

7. 1. Decide what to forecast: Level of detail, units of analysis & time horizon required 2. Evaluate & analyze appropriate data Identify needed data & whether it’s available 3. Select & test the forecasting model Cost, ease of use & accuracy Step-by-Step 4. Generate the forecast 5. Monitor forecast accuracy over time

8. Types of Forecasting Methods Qualitative methods: Forecasts generated subjectively by the forecaster Quantitative methods: Forecasts generated through mathematical modeling

9. Qualitative Methods Weaknesses: –Forecaster bias can reduce the accuracy of the forecast Past Future Strengths: –Incorporates inside information –Particularly useful when the future is expected to be very different than the past

10. Types of Qualitative Models

11. Quantitative Methods Strengths: Consistent and objective Can consider a lot of data at once Weaknesses: Necessary data isn’t always available Forecast quality is dependent upon data quality

12. Types of Quantitative Methods Time Series Models: Time Series Models: Assumes the future will follow same patterns as the past Assumes the future will follow same patterns as the past Causal Models: Causal Models: Explores cause-and-effect relationships Explores cause-and-effect relationships Uses leading indicators to predict the future Uses leading indicators to predict the future

13. Capacity Planning Initial Capacity Planning Initial Capacity Planning How Much Do we need? (Volume) How Much Do we need? (Volume) When do we need? (Time horizon) When do we need? (Time horizon) Where to make? (Location) Where to make? (Location) Capacity Expansion Capacity Expansion Lead Strategy Lead Strategy Lag Strategy Lag Strategy Average Average

14. Initial Capacity Planning Capacity decisions are important because: 1. They have an impact on the ability of an organisation to meet future demands. 2. There is a definite relation between capacity & operating costs. 3. Initial investments depends upon capacity decisions. 4. It involves long term commitment of resources.

15. Three Basic Question What kind of capacity is needed? (Intended product or services) How Much is needed? (The agony of too much & too little CAPACITY.) When it is needed? (Opportunity missed is opportunity lost) Capacity Planning

16. How much?

17. Capacity Expansion Volume & certainty of anticipated demand Volume & certainty of anticipated demand Strategic objectives for growth Strategic objectives for growth Costs of expansion & operation Costs of expansion & operation Incremental or one-step expansion Incremental or one-step expansion

18. Capacity Expansion Strategies Units Capacity Time Demand Capacity lead strategy Units Capacity Time Demand Capacity lag strategy Units Capacity Time Demand Average capacity strategyIncremental vs. one-step expansion Units Incremental expansion Time Demand One-step expansion

19. Strategies for Meeting Non-Uniform Demand Build up inventory Build up inventory Back-ordering Back-ordering Smooth demand through marketing Smooth demand through marketing increase price to reduce demand increase price to reduce demand decrease price to increase demand decrease price to increase demand

20. Strategies for Meeting Non-Uniform Demand Vary capacity Vary capacity overtime overtime extra shifts extra shifts subcontracting subcontracting hiring and layoffs hiring and layoffs

21. Loss Categories The Six Big Losses Downtime (lost availability) Equipment failures. Setup and adjustments Speed losses (lost performance) Idling and minor stoppages. Reduced speed operation Defect losses (lost quality) Defect losses (lost quality) Scrap and rework Start-up losses Operational Losses

22. Implementing TPM means striving toward a vision of the ideal manufacturing situation, a vision that encompasses zero breakdowns zero abnormalities zero defects zero accidents The path to this ideal situation is a process of continuous improvement that requires the total commitment of everyone in the company, from operators to top management. OEE (TPM)

23. Total productive maintenance (TPM) was first defined in 1971 by the Japan Institute of Plant Maintenance (JIPM). TPM is a company wide strategy to increase the effectiveness of production environments The difference between the ideal and the actual situation, in factory operations, is due to losses. Equipment operators face the results of these losses on a daily basis. TPM gives them the tools to identify the losses and make improvements. A key strategy in TPM is identifying and reducing what we call the six big losses.

24. Maintenance Management The organisation of maintenance activities within an agreed policy Business Objectives & Strategy Production Objectives & Strategy Maintenance ObjectivesMaintenance Policy Plant & Equipment Asset register Classification Criticality Operating Regimes Maintenance Strategy Preventive Corrective Information Management Technical Manuals Drawings Analysis Resources Parts/ Tools Services Facilities Equipment Diagnostics Procedures Planning Scheduling Technical Organisation Accountability Communication Structure Support Partners Control system Measurement Reports Tracking Action People Trade skills, Engineering Skills, Management Skills, Safety, Training & development, Leadership People Values, Rewards, Recognition, Sanctions A formalised Framework, accepted by senior mngt.,, within which decisions on maintenance are taken.

25. THE ELEMENTS OF OVERALL EQUIPMENT EFFECTIVENESS

26. Overall Equipment Effectiveness (OEE) Overall Equipment Effectiveness Availability losses Performance losses Quality losses Set-up Breakdown Minor Stoppages Speed losses Start-up losses In process losses Inconsistent Times,Insufficient skills.Poor Planning & scheduling,Different methods,Poor tooling,Poor start up controls Missing parts,Insufficient support,Excess start-up adjustment Lack of maintenance,Low operator interest,not knowing of problems,Poor Training,Design Problems,Inferior Material Material not available,Change over at start/endJams/misfeeds/ overloads,operator error,operator absence Unclear design specs.,poor maintenance history,incorrect settings, Poor Training,Speed deliberately reduced,inconsistent Material Poor machine changeover,Inconsistent materials,No start-up check lists,Waiting for temp. - pressures,Minor adjustments Temperature & pressure changes,inconsistent materials, Process not followed,poor calibration, Gauges not calibrated properly.

27. We recommend that the operator collect the daily data about the equipment for use in the OEE calculation. Collecting this data will teach the operator about the equipment focus the operator’s attention on the losses grow a feeling of ownership of the equipment The shift leader or line manager is often the one who will receive the daily operating data from the operator and process it to develop information about the OEE. Working hands on with the data will; give the leader/manager basic facts and figures on the equipment help the leader/manager give appropriate feedback to the operators and others involved in equipment improvement allow the leader to keep management informed about equipment status and improvement results