(L d OEE)(Lean and OEE) - iise.org - IIE 2010 Webinar.pdf · Founder and Coordinator of the...

Industrial ManagementOEEThe Good, the Bad and the Ugly

(L d OEE)(Lean and OEE)

Prof.dr.ir. Dirk Van GoubergengPresidentVan Goubergen P&M Productivity Improvement gcvEikenlaan 51B-2275 Lille (BELGIUM)

Department of Industrial ManagementGhent UniversityTechnologiepark 903

Email: [email protected] B-9052 Zwijnaarde (BELGIUM)

© 2009-2010 Prof.dr.ir. Dirk Van Goubergen – www.vangoubergen.com 1

Who am I?Prof. dr. ir. Dirk Van Goubergen – Email: [email protected]:* MS in Mechanical Engineering (1991) – Royal Military Academy, Brussels (B)* MS in Industrial Management (1997) – Ghent University/Vlerick Management School (B)g ( ) y g ( )* PhD in Industrial Engineering (2004) – Ghent University (B)

Professional experience:1992-2004 Lecturer in Industrial Engineering at HORITO College Turnhout (B)2000-2004 Research Associate at Ghent University – Dept. of Industrial Management (B)* Grad. classes on Design of Production Systems and Operations Management

2004-… Professor at Ghent University – Dept. of Industrial Management (B)* Grad. classes on Design of Manufacturing and Service Operations, Operations Management, Method Engineering and Work Measurement.

2000 Guest lecturer at the Grado Dept of Industrial and Systems Engineering at Virginia Tech Blacksburg VA (USA)2000-… Guest lecturer at the Grado Dept. of Industrial and Systems Engineering at Virginia Tech, Blacksburg VA (USA)2002 Examiner for the US Senate Productivity and Quality Award for the State of Virginia (USA)2004-2010 Program Director ‘Fellow in Industrial Engineering’ program from the Flemish Engineers Chamber VIK (B)2005-… Guest Professor at the Antwerp University (B)* Grad Class on Cost and Performance Benchmarking Grad. Class on Cost and Performance Benchmarking

2005-… Program Director of the “Master in Industrial Management” program at the Ghent University (B)2005-… Founder and Coordinator of the ‘Black Belt in Lean’ training and certification program at the Ghent University (B)2009-… Guest lecturer at the Vlerick Leuven-Gent Management School (B) 2010-… Member of the Advisory Board of the Institute of Industrial Engineers – Process Division (USA)y g ( )

1993-.. Founder and president of VAN GOUBERGEN P&M Productivity Improvement (www.vangoubergen.com) * +15 years of international experience in the area of set-up reduction, lean management and productivity improvement

in different manufacturing and service industries throughout Europe, North America and Asia (a.o. Volvo, Akzo, Atlasg g p , ( , ,Copco, Masterfoods/Mars, Danone, Philips, Coca Cola, Imperial, Lays, Belgian Railways, …)

2006-.. Founder and President of the CENTER FOR PRODUCTIVITY IMPROVEMENT ROMANIA (www.productivity.ro)

Senior Member of the Institute of Industrial Engineers, Member of the International Society for Occupational Ergonomics and Safety

AgendaIndustrial Management

AgendaTh GOODThe GOOD• What is Lean?• Waste on Equipment – OEEWaste on Equipment OEE• What is OEE?• OEE as an improvement tool

Th BADThe BAD• Wrong use and manipulation of OEE• OEE within Lean: efficient processes vs efficient valueOEE within Lean: efficient processes vs. efficient value

streams• Trade off between capacity and flexibility

Th UGLYThe UGLY• OEE linked with pay and bonus systems

To Remember© 2009-2010 Prof.dr.ir. Dirk Van Goubergen – www.vangoubergen.com 3

To Remember….

Industrial Management

Part One

THE GOODPart One


WhatWhat is ‘Lean’?is ‘Lean’?Industrial Management

WhatWhat is Lean ?is Lean ?

A business strategy for organizing and improving the• A business strategy for organizing and improving the operational activities of companies– Improved competitivenessImproved competitiveness– Flow of value (-added activities)

• Adapted from Toyota Production Systemp y y• Based on 5 steps

1. Correctly specify value for the customer2. Identify the value stream and remove waste3. Make the product flow4 S th t ll4. So the customer can pull5. By managing towards perfection

• Tools and techniques (Womack, Jones – Lean Thinking)


• Tools and techniques

TPSTPSIndustrial Management

Best Quality - Lowest Cost - Shortest Lead TimeThrough shortening the Production Flow by Eliminating Waste

TPSTPS

Through shortening the Production Flow by Eliminating Waste

J i Ti Jid kJust in Time“The right part

at the right time

Jidoka“Built in Quality”

in the right amount”

• Continuous FlowP ll S t

• Manual / AutomaticLine Stop

• Labor-MachineEfficiency

• Pull System• Level Production(Heijunka)

• Error Proofing – Poka Yoke

• Visual ControlFlexible, Capable,Highly Motivated

P lPeople

Standardized WorkTotal Productive Maintenance

Robust Products & ProcessesSupplier Involvement

Operational Stability


Total Productive Maintenance Supplier InvolvementStability

Waste Waste onon EquipmentEquipmentIndustrial Management

q pq p

TPM – Seiichi Nakajima (1986)TPM – Seiichi Nakajima (1986) 6 major losses on equipment

• Defects/stoppages• Set-ups• R idl i t t iti• Run idle, minor stoppages, empty positions• Lower speed• Startup lossesStartup losses• Process scrap and rework

You Can’t Manage What You Don’tYou Can t Manage What You Don t MeasureWh t i REAL t ti l it ?


What is your REAL potential capacity ?

OEEOEEIndustrial Management

Overall Equipment EffectivenessOverall Equipment Effectiveness

Overall Equipment Efficiency


OEE CalculationOEE CalculationIndustrial Management

OVERALL EQUIPMENTEFFECTIVENESSEFFECTIVENESS

Availability Efficiency QualityAvailability(%)

Efficiency(%)

Quality(%)


Part 1: AvailabilityPart 1: AvailabilityIndustrial Management

yy

LOADING TIME

AVAILABILITYLoading Time - Downtime

Loading Time x 100=

1. DEFECTS/STOPPAGES

OPERATING TIME

460 min – 60 min460 min

x 100= = 87 %(e.g.)2. SET-UPS

Machine was down (not operating) although it could have been available

Operating time vs. Loading time


Part 1: AvailabilityPart 1: AvailabilityIndustrial Management

yy

C l l tiCalculation:Loading Time = (Normal work time + Over time)

(Pl d St E it )– (Planned Stoppages + Excess capacity) – Remark: Stay critical for “planned stoppages” !

Operating Time = Loading Time - Stoppages– Machine defects, no energy, no personnel, no basic

t i l t l t l imaterial, no tools, setups, cleaning– line constraints (no input, output buffer full)

100×=timeloadingtimeoperatingtyAvailabili


timeloading

Part 2: EfficiencyPart 2: EfficiencyIndustrial Management

yyOPERATING

TIME

PROCESSEFFICIENCY

Cycle Time x Qty of ProductsOperating Time

x 100=

0,5 min x 704

3. IDLING, MINORSTOPPAGESNET

OPERATING TIME 0,5 min x 704

400 min x 100= = 88 %(e.g.)4. REDUCED

SPEED

Machine operating, but no or not enough productionMachine operating, but no or not enough productionPossible causes

– Empty, wear and tear, empty positions, interferences, lower speed, adjustments tests minor stoppages trainingadjustments, tests, minor stoppages, training,…….


Part 2: EfficiencyPart 2: EfficiencyIndustrial Management

yy

CalculationCalculationCycle time per productMaximum speed machine (Name Plate Capacity)Maximum speed machine (Name Plate Capacity)

– Determined by specs machine

Maximum is always 100%Maximum is always 100%Correct determination cycle time or maximum speed

( ) 100××

=timeoperating

producedQtyproducttimecycleEfficiencyp g

100/

×=htthtiti

producedQtyEfficiency


/.× hourqtytheortimeoperating

Part 3: QualityPart 3: QualityIndustrial Management

Q yQ yNET

OPERATINGTIME

% GOOD PRODUCTS

Qty Produced –WasteQty Produced

x 100=

704 pcs – 28 pcs

5. PROCESSWASTE

6 SET UP

QTY OFGOOD

PRODUCTS 704 pcs 28 pcs704 pcs

x 100= = 96 %(e.g.)6. SET-UP WASTE

Products : scrap – bad qualityDuring productiong pAfter setup: at startup production

In doubt : NO good productReworkable products: NO good product


Part 3: QualityPart 3: QualityIndustrial Management

Q yQ y

Calculation:Quantity of products madeQuantity of products madeQuantity of direct sellable products

- Planned customer- Planned customer- Planned quality

d d 100×−

=producedqty

scrapproducedqtyQuality


OEE OEE SummarSummaryyIndustrial Management

yyOVERALL EQUIPMENT EFFECTIVENESS6 LOSSESLOADING TIME


Loading Time x 100=

460 min – 60 min

1. DEFECTSOPERATING

TIME460 min – 60 min

460 min x 100= = 87 %(e.g.)

PROCESSEFFICIENCY

Cycle Time x Qty Producedx 100=

2. SET-UPS

3. IDLING, MINORSTOPPAGES EFFICIENCY Operating Time

x 100=

0,5 min x 704400 min

x 100= = 88 %(e.g.)

STOPPAGES

4. REDUCEDSPEED

NET OPERATING

TIME

% GOOD PRODUCTS

Qty Produced – WasteQty Produced

x 100=5. PROCESS

WASTEQTY OFGOOD

704 pcs – 28 pcs704 pcs

x 100= = 96 %(e.g.)6. SET-UPWASTE

GOODPRODUCTS


OVERALL EQUIPMENT = AVAILABILITY x PROC. EFFIC. x GOOD PRODUCTSEFFECTIVENESS = 0,87 x 0,88 x 0,96 = 73,5 %

TEEPIndustrial Management

T t l Eff ti E i t P fTotal Effective Equipment PerformanceMeasures usage of total available capacityPlanning loss– No demand (overcapacity)– R&D production– R&D production– No energy– Other stoppage reason not under control of the company

U d ti (i th f t i l d)Unused time (i.e. the factory is closed)Planning Loading Time lossesLoading Time

NotusedTotal Operations Time


Total Time (365d x 24h)

SummarySummaryIndustrial Management

yyTotal Time (365 days x 24 hours)

Total Operations Time

Loading Time

O ti Ti

Unscheduledtime

Unplannedtime

LineStoppageDefectOperating Time

Expected Output

Real Output

restraintStoppageDefect

Minorstops

Reducedspeed

ReworkScrapGood Products

OEE

Net Utilisation (=TEEP*)

Gross Capacity Utilisation(adapted from Koch 2003)


OEE as Impro ement Tool Industrial ManagementImprovement Tool

Where is the biggest loss?Where is the biggest loss?Drill down analysis for continuous improvement

40%60%80%

100%

54%

88%98%

47%

0%20%40%

Av Eff Q OEE

Root Cause AnalysisCountermeasuresCountermeasures

PDCA



Part Two

THE BADPart Two


OEE can be misused and manipulated Industrial Managementmanipulated

OEE is a relative measure for one or multipleOEE is a relative measure for one or multiple identical equipment

Machine A vs B : higher OEE = more output ?Machine A vs. B : higher OEE = more output ?• What about NPC? • What about product mix?

What abo t ‘World Class’ benchmarks ?What about ‘World Class’ benchmarks ?

OEE as an overall figure offers no insight in O as a o e a gu e o e s o s g timprovement opportunities and can be misleading

Analyse the 3 factorsWhat is the relative cost of 1% availability loss vs. 1% efficiency loss vs. 1% quality loss?• Is OEE = 90% x 90% x 80% the same as OEE = 90% x 80% x 90% ?


Is OEE 90% x 90% x 80% the same as OEE 90% x 80% x 90% ?

OEE can be misused and manipulated Industrial Managementmanipulated

OEE registration can be manipulatedOEE registration can be manipulated, especially if manual

‘Estimating’ downtimesEstimating downtimesCount all products as ‘OK’‘Abnormal’ vs. ‘Normal’ downtimeUse lower figure as nominal speed

OEE can work against Lean !OEE can work against Lean !OverproductionSuboptimizationp• Efficient processes vs. Efficient value streams


Efficient Processes vs.Efficient Value Streams Industrial ManagementEfficient Value Streams


LEAN = Improving Value Streams Industrial ManagementImproving Value Streams

Total Lead Time vs.

Total Process Time


(Learning to See Mike Rother John Shook Lean Enterprise Institute 1998)

Is it always goodIndustrial Management

y gto increase OEE ?

YES but only if it impliesYES but only if it implies reducing downtimes due to technical or organisational lossesorganisational lossesReducing efficiency lossesImproving product qualityp g p q y

BEWARE if it is due to reducing overall setup g pdowntime without reducing setup times

Setup performance determines the EPEI* in the p pvalue stream

(EPEI = Every Part Every Interval)

OEE improvement = trade off between need for capacity


OEE improvement = trade off between need for capacity and need for flexibility

OEEOEE ImprovementImprovement??Industrial Management

OEE OEE ImprovementImprovement??

OEE increase

Lesschangeovers

WIP/FG Overall Value increase

EPEI increase

Stream cost?

LT increase

Flexibility ?Competitiveness?


Trade Off A Set-Up Reduction Example

Industrial ManagementA Set-Up Reduction Example

OVERALL EQUIPMENT EFFECTIVENESS6 LOSSESLOADING TIME


Loading Time x 100=

460 min – 60 min

1. DEFECTSOPERATING


460 min x 100= = 87 %(e.g.)

PROCESSEFFICIENCY


2. SET-UPS


x 100=

0,5 min x 704400 min

x 100= = 88 %(e.g.)

STOPPAGES

4. REDUCEDSPEED

NET OPERATING

TIME

% GOOD PRODUCTS


x 100=5. PROCESS

WASTEQTY OFGOOD

704 pcs – 28 pcs704 pcs

x 100= = 96 %(e.g.)6. SET-UP WASTE

GOODPRODUCTS



Extra Capacity neededIndustrial Management

p y6 LOSSESLOADING TIME OVERALL EQUIPMENT EFFECTIVENESS


Loading Time x 100=

460 min – 10 min

1. DEFECTSOPERATING


460 min x 100= = 97.8 %(e.g.)

PROCESSEFFICIENCY


2. SET-UPS


x 100=

0,5 min x 797450 min

x 100= = 88.5 %(e.g.)

STOPPAGES

4. REDUCEDSPEED

NET OPERATING

TIME

% GOOD PRODUCTS


x 100=5. PROCESS

WASTEQTY OFGOOD

797 pcs – 15 pcs797 pcs

x 100= = 98.1 %(e.g.)6. SET-UP WASTE

GOODPRODUCTS



No extra CapacityIndustrial Management

p y6 LOSSESLOADING TIME OVERALL EQUIPMENT EFFECTIVENESS


Loading Time x 100=

410 min – 10 min

1. DEFECTSOPERATING


410 min x 100= = 97.5 %(e.g.)

PROCESSEFFICIENCY


2. SET-UPS


x 100=

0,5 min x 704400 min

x 100= = 88 %(e.g.)

STOPPAGES

4. REDUCEDSPEED

NET OPERATING

TIME

% GOOD PRODUCTS


x 100=5. PROCESS

WASTEQTY OFGOOD

704 pcs – 15 pcs704 pcs

x 100= = 97.8 %(e.g.)6. SET-UP WASTE

GOODPRODUCTS



FlexibilityIndustrial Management

y6 LOSSESLOADING TIME OVERALL EQUIPMENT EFFECTIVENESS


Loading Time x 100=

460 min – (6x10 min)

1. DEFECTSOPERATING

TIME460 min – (6x10 min)

460 min x 100= = 87 %(e.g.)

PROCESSEFFICIENCY


2. SET-UPS


x 100=

0,5 min x 704400 min

x 100= = 88 %(e.g.)

STOPPAGES

4. REDUCEDSPEED

NET OPERATING

TIME

% GOOD PRODUCTS


x 100=5. PROCESS

WASTEQTY OFGOOD

704 pcs – 15 pcs704 pcs

x 100= = 97,8 %(e.g.)6. SET-UP WASTE

GOODPRODUCTS




Part Three

THE UGLYPart Three


OEE linked with Pay and Bonus Systems Industrial ManagementPay and Bonus Systems

The Uncertainy Principle of HeisenbergThe Uncertainy Principle of HeisenbergMeasurement systems should

drive the desired behaviornot focus on only one aspect of performance but should be balanced

OEE, if wrongly used, can driveOverproduction (too much, too early)Suboptimization

Effi i t Effi i t l t• Efficient process vs. Efficient value stream



CONCLUSION


To RememberIndustrial Management

OEE is the only ‘complete’ measure ofOEE is the only complete measure of machine performanceOEE makes waste visibleOEE is a relative measure that isOEE is a relative measure that is designed to be used for continuous improvementimprovementOEE can fit perfectly within a Lean strategyBeware of the Bad and Ugly !


g y

Van Goubergen P&M Industrial ManagementProductivity Improvement

Training/Education (15%) Implementation (85%)Training/Education (15%) - Implementation (85%)

SomeSome ofof ourour referencesreferencesSomeSome of of ourour referencesreferences……


(L d OEE)(Lean and OEE) - iise.org - IIE 2010 Webinar.pdf · Founder and Coordinator of the...

Documents

Transcript of (L d OEE)(Lean and OEE) - iise.org - IIE 2010 Webinar.pdf · Founder and Coordinator of the...