Welcome to the class….

Maintenance Management
(FRSI 2153)

Lecture: 5 - 6
ELIMINATE WASTE &
OVERALL EQUIPMENT EFFICIENCY (OEE)

Lecturer:
Assoc. Prof. Dr. Astuty Amrin (astuty@utm.my)
Dr. Roslina Mohammad (mroslina.kl@utm.my)
 Lecture 5
ELIMINATE WASTE
 What Exactly is Waste?
• The simplest way to describe waste is as
“Something that adds NO Value.” Our customers
would not be happy to pay for any action that we
take that does not add value to what they actually
want and nor should we be.

• These wastes are included within the cost of our

products, either inflating the price we pay or
reducing the profit of the company.
 Why Remove Waste?
• Waste increase products and services PRICE due to
unnecessary costs.

• Removing all elements of waste from processes reduce

cost and increase profit.

• Waste has a major impact on customer’s satisfaction

with ones products and services. Customers want on
time delivery, perfect quality and at the right price.
 Major Losses in Production
Line and Organization
• Failure losses – Breakdown • Management loss
losses • Operating motion loss

• Setup / adjustment losses • Line organization loss

• Cutting blade loss • Logistic loss

• Measurement and adjustment
• Start up loss
loss
• Minor stoppage / Idling loss.
• Energy loss
• Speed loss - operating at low
• Die, jig and tool breakage loss
speed
• Yield loss
• Defect / rework loss • Scheduled downtime loss
 7 Wastes of Lean Manufacturing
• The seven wastes (Muda) of Lean Manufacturing are what a
company should aim to remove from its processes by
removing the causes of Mura (unevenness) and Muri
(overburden)as well as tackling Muda directly.

• The Seven Wastes of Lean Manufacturing are;

a. Transport
b. Inventory
c. Motion
d. Waiting
e. Over-Processing
f. Overproduction
g. Defects
7 Wastes of Lean Manufacturing
 LECTURE 6
Measuring Overall Equipment
Effectiveness (OEE)
 Introduction to OEE
• 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 35% to 45% range.
 Introduction
• 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%?
• To really reveal the hidden machines in your factory, ALL
Losses need to be defined and visualized.
 Why use OEE?
• 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

OEE
• Identify Bottlenecks and Constraints
• Improve On-Time Delivery
• Manage Operations Pre-emptively & Proactively
• Measurably Improve Profitability
• OEE is the visual metric of Total Productive Manufacturing
 What are the benefits of
OEE?
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.
 OEE Formula

• OVERALL EQUIPMENT EFFECTIVENESS % =

AVAILABILITY x PERFORMANCE x QUALITY
 OEE Formula

Availability % = Run Time / Scheduled Time

Performance % = (Parts Made x Standard) / Run Time

Quality % = Good Units / Units Started

 What does that mean?
• 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.

• Make visible specific machine status for everyone.

 OEE and the Six Big Losses
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
 Availability
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
 Planned vs. Unplanned Downtime
Planned Unplanned (Losses)
 Excess capacity.  Breakdowns.
 Planned breaks.  Set Ups and
 Planned Adjustments.
Maintenance.  Late deliveries
 Communications (material).
briefs / team  Operator
meetings. 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.
 Productivity
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
 Operating Speed vs.
Productivity
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.
 Quality
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
 Processed vs. Defect
Quantity

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
Data Collection for OEE

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 Data Collection
Example: Three Hourly Data Sheet

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 Data Analysis
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

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 Example 1
A medium volume manufacturing facility with a capacity of producing 2
parts/minute actually produced 800 parts in a planned running 2 shifts of 8
hours each. It had breaks and scheduled maintenance for 40 minutes and also
faced 40 minutes breakdowns and 1 hour 20 minutes for changeover and
adjustment. Number of rejects and re-works were 10 and 6 parts respectively.
Calculate its overall effectiveness.

Planned production time = 2 (shifts) x 8 hrs. = 960 minutes

Availbale time = 960-40 (scheduled maintenance) = 920 min.
Unplanned-time = 40 (Breakdowns) + 80 (Changeover & adjustment) = 120
min.

Available time – Down time 920 – 120 min.

Availability % = -------------------------------- x 100 = ---------------- x 100 = 87%
Available time 920
 Example 1 - continue
Quantity produced 800
Performance % = --------------------------------------- x 100 = ---------------- x 100
Time run x Capacity/given time (920-120)x2
= 50%

Amount produced – Amount defects – Amount rework

Quality % = ----------------------------------------------------------------------- x 100
Amount produced
800 – 10 – 6
= -------------------- x 100 = 98%
800

Overall effectiveness (OEE) = 0.87 x 0.5 x 0.98 x 100 = 42.6 %

 Example 2
A chemical plant was expected to run for 120 hours/week continuously with
production capacity of 2400 metric tones /hour. At the end the week it
produced 220,000 tones together with a waste of 3000 tones. It had 120
minutes breakdowns and 460 minutes changeover and adjustment. Calculate
plant overall effectiveness.

Planned production time = 120 hrs/week = 7200 min.

For continuous production, breaks and scheduled maintenance = 0 min.
Therefore, loading time = 7200 - 0 = 7200 min.
Down-time = 120 (Breakdowns) + 460 (Changeover & adjustment) = 580 min.

Loading time – Down time 7200 - 580

Availability % = -------------------------------------- x 100 = --------------- x 100 = 92%
Loading time 7200
 Example 2 - continue
Quantity produced 220,000
Performance % = -------------------------- x 100 = ---------------------- x 100
Time run x Capacity (6620)x(2400/60)
= 83%

Amount produced – Amount waste

Quality % = --------------------------------------------- x 100
Amount produced
220,000 – 3000
= -------------------- x 100 = 98.6%
220,000

Overall effectiveness = 0.92 x 0.83 x 0.986 x 100 = 75.3 %

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 Example 3
A semi-automated assembly machine, assembles and welds automotive
components for a single shift of 7.5 hours, 5 days a week; planned
throughput = 150 units/hour; actual output = 2875 units/week.
The following losses are encountered during assembly:

1. Incorrect assembly causes the machine to stop and needs re-set on

average 5 times/hr. where 1 unit and 2 minutes are lost. (This leads to
performance loss due to minor stoppage and also quality loss)

2. Worn out electrodes are to be replaced once per week, it takes 1 hour
when 30 units are scrapped => availability and quality losses

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 Example 3 - continue
3. Burst out cooling hose causes a machine breakdown once in a month and
replacement takes 5 hours => availability loss
4. Misaligned fixture causes a loss of 220 units/ week => quality loss

5. For different size parts, fixtures to be removed and replaced and

electrode position to be adjusted 3 times/week which takes 2.25 hours
where 24 units are scrapped each time => availability and quality losses

6. Actuating cylinder sometimes sticks for 15 minutes/ day causing

production delay which takes double cycle time => performance loss

7. Application of rust protective spray by operator stopping the machine at

the start and end of the day takes 5 minutes each time => minor
stoppages thereby performance loss

8. Limit switches corrode once in every 6 weeks stopping the machine and
replacement takes 6 hours => availability loss.
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 Example 3 - continue
Calculation of all the losses:
Availability losses = 1 x 60 mins (No,2) +
5 x 60/4 mins (Av No.3) +
2.25 x 3 x 60 mins (No.5) +
6 x 60/6 mins (Av No.8)
= 600 minutes/week

Performance losses = 2 mins x 5 x 7.5 x 5(No.1) +

15 mins x 5 (No.6) +5 mins x 2 x 5 (No.7)
= 500 minutes / week.

Quality losses = 1 unit x 5 x 7.5 x 5 (No.1) +

30 units (No.2) + 220 units (No.4) +
24 units x 3 (No.5)
= 510 units/week
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 Example 3 - continue
Loading time = 7.5 x 5 x 60 = 2250 minutes/week

2250 - 600
Availability % = --------------- x 100 = 73%
2250

1650 - 500
Performance % = ---------------- x 100 = 70%
1650
OR
2875
Performance % = ----------------------- x 100 = 70%
Z1650 /60 x 150)

2875 - 510
Quality % = --------------- x 100 = 82%
2875

Overall Machine Effectiveness (OME) = 0.73 x 0.70 x 0.82 x 100 = 42%

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 Solution
# of breakdown Frequency

0 4/20 = 0.2
1 8/20 = 0.4
2 6/20 = 0.3
3 2/20 = 0.1

Step 1
Expected # of breakdowns = (# of breakdown) x (frequency)
= (0)(0.2)+(1)(0.4)+(2)(0.3)+(3)(0.1)
= 1.3 breakdown per month
 Solution

Step 2
Expected breakdown cost = (expected # of breakdown) x
(cost per breakdown)
= (1.3) x (300)
= RM390 per month