OEE data. Product: Artificial wood plank Type A. Availability rate: Performance efficiency: Quality rate: OEE: Loading time: hours. Loss time: Operating time: Loss unit: 1,, units. Net operating time: Actual production: 11,, units. Reject: 92, units. Cost data. Profit per unit: 2.
Direct material cost: 5. Rework cost: 0. From three sources of data, these sufficient data can be used for Downloaded by [Florida International University] at 22 December Availability losses are calculated from Equations 5 , 7 and 8 as follows. Quality losses sub reject element are calculated from Equations 13 — 16 as follows.
Quality losses sub rework element are calculated from Equations 17 — 19 as follows. Total quality losses are calculated from Equation In Figure 1, the losses in monetary form and percentage form are shown for a number of equipments evaluated by the proposed methodology. This irrelevant outcome was not surprising. Normally, OEE does not directly relate to OECL, because the relation depends on several aspects consisting of machine capacity, price of product and production cost Wudhikarn et al.
All the results are presented in Table 8. This difference is caused by dissimilar consideration on incurred losses. A result of availability rate, performance efficiency, quality rate and OEE is represented in percentage and this rational outcome is unable to determine the difference of magnitude between elements and also between equipments.
For example, a percentage of availability loss is assumed to be similar to one percentage of quality loss, but in fact, equipment breakdown should cause lower losses than production reject. Wudhikarn Table 7. Cost of quality losses calculation example. However, they still depend on six big losses. If equipment produces an expensive product and also has high capacity, whereas it has very rarely losses or no loss, consequently OECL and OEQCL probably have low monetary losses.
Conversely if the machine has moderate to considerably higher six big losses, it maybe has higher OECL and OEQCL than an equipment manufacturing a cheap product and has low production capacity. For instance, machine CC4 has the highest OEE which normally means it has the lowest losses, but on the contrary has the highest OECL and OEQCL, which means it has the highest cost losses, since the machine operates with expensive products and also high production capacity.
From Table 8, it is discovered that most problematic sequences are similar, except for a difference between machines ST4 and ST5. Figure 1. Table 8. Machine priority by alternative methods.
ST1 0. Table 9. Maximum capacity and product cost by machine. OECL says differently. Actually, the quality cost normally relates to the business operation. From this case study, ST5 has products returned or recalled and warranty replacement higher than ST4 for Conclusions The performance measurement for operating machines is very important for sustaining firms. Managers make decisions from this correct evaluation. Therefore appropriate measurement is necessarily established.
Moreover, the accuracy of performance measurement is essential to improve and succeed in a business goal. One of the important and widely used metrics of performance in manufacturing is OEE, especially for firms applying TPM.
The original OEE method does not appropriately prioritise problematic equipment, which differ in terms of capacity, produced product, production cost, etc. Anyway this method is not perfectly developed, because it does not deal with cost of quality which normally Downloaded by [Florida International University] at 22 December In order to implement this developed method, both general cost accounting and cost of quality accounting must be completely provided.
This research also discusses a well-developed and implemented method, with the result shown that it correctly prioritises problematic machines better than OECL and especially OEE.
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The cost of quality: a different approach to non-interest expense management. Ross, J. Quality management and the role of the accountant. Industrial Management, 32 4 , 21— Sherwin, D. A review of overall models for maintenance management. To find that, you will have to work with your colleagues to consider the following:.
Otherwise, you will not be able to get to the correct OEE score. That means time will appear as seconds rather than minutes or hours. If you are new to OEE or have an atypical production model or process, you may want to start with this. It goes like this:. Simply insert the numbers you collected for each item and plug them into this formula.
You will then have a simple OEE score. How does that impact our OEE score with this calculation? For that, we need to use the advanced version of this calculation.
The full-on OEE score involves three numbers, and each one takes a little math to get to on their own. Availability is the amount of time that your equipment or process is running as it should. It is the percentage of your planned production time that was spent producing run time. Here is the formula for that:. Using our example from above, even though our planned production time was a 5-hour shift 18, seconds , production stopped for 45 minutes 2, seconds due to a breakdown.
That gives us a run time of 15, seconds. This is the first number in our advanced OEE score. This is the speed of your production process and your ability to stay at that pace over time. It is the percentage of how close your run time was to the ideal.
In our example above, we know that it would take 3 seconds to make one part under perfect conditions. Making 4, parts should take 12, seconds. Given that our actual run time to make that amount was 17, seconds, our math will look like this:.
Quality refers to, well, the quality of parts and how often you make defects. And this one is pretty easy. It is the percentage of all parts you made that met your quality standards good. Using our example here, we know that of the total parts we made 4, , 3, met our standards. We are entering the home stretch now!
We have our availability, performance, and quality scores. Or is it not that great? Or somewhere in between? How do we know? We have our OEE score, and now we need a little context. Luckily, there is a lot of research to help you interpret your score and compare it to industry standards.
Before starting on the path to continuous improvement and lean manufacturing, it is important to be clear about the scope of your rating. If this is your first OEE score, it will serve as your baseline, the benchmark to which you compare all future scores. It will be the starting point for comparing future OEE scores and measuring improvements.
As you make those improvements and comparisons, keep in mind:. OEE scores are always percentages no matter what they are measuring. They were designed this way so that they are easier to compare. This helps you know how your OEE stacks up to others — both inside and outside your company. We now know that our score from above of The key here is that getting your OEE score is just the beginning, regardless of your score and how it compares to others. Your OEE can not only tell you where you stand, but it can also tell you what direction to go in to improve.
OEE is not the car that will drive improvement at your organization — you are. But OEE does provide the road map to get you where you want to go. The road to get to your OEE score may feel long and littered with mathematical twists and turns.
The truth is, those twists and turns — each number and formula you used — clearly tell you how to improve. They fall into three groups and — surprise! The Six Big Losses. Source : OEE. The first two of the six big losses fall under your score and have to do with keeping your process up and running as much as possible. If your availability score is low, dig into your run time and plan production time numbers.
Equipment breakdowns are your most significant source of unplanned stops and idling. If unplanned downtime is what is dragging down your operating time, this is where you need to start. Equipment setups and adjustments take time. There is no getting away from them. The good news is that they give us room to improve. Do them at the right time — in the right way — to minimize production losses.
Here is how to reduce the frequency and length of these planned stops:. The next two of the six big losses fall under your performance score and have to do with, in short, speed. Addressing these two losses helps you maximize your production. If your performance score is low, look into the consistency of your run time and cycle time numbers. Minor stops are hard to monitor and can seem unimportant.
The truth is, many little stops happening in a large-scale manufacturing process add up quickly. Here is where to start. Train machine operators to fix more minor issues on the spot. This is the foundation for autonomous maintenance and saves a lot of time. By giving them access to Limble, they can have all the help and instruction they need at their fingertips.
Track patterns of performance loss. When are minor stops or slow cycles most likely to happen? Patterns in this data can help you find and prevent the root cause.
There is a reason SOPs exist. They are usually well-researched and thoroughly tested. This leads to fewer mistakes and minor stops and is why many organizations work toward process automation whenever they can. Optimize your production cycle and speed Reduced speed is nearly always the result of wear and tear, poor maintenance, or misuse. This is one area where we humans can relate. As we get older, we tend to get a bit slower.
But if we have a good workout regimen and take care of ourselves, we can keep plugging along at a good pace for a long, long time. Do the same for your equipment. Keeping it in tip-top shape is the best thing you can do to help it maintain its production speed. Do what you need to do to shore up your PM program. Train your machine operators to use the equipment properly and take care of it. Give it a name and buy it flowers if you want to.
The point is, treat it well. OEE measurement is essential for every organization that is committed to eliminate wastes and losses through the implementation of TPM, Lean manufacturing and other maintenance strategies [17]. According to Aditya Parida et al. Arunraj K et al. According to Chetan S.
Senthia et al. Jain A et al. OEE must be used as a tool to assess the current situation of the machine and to note the starting point for the improvement during the TPM implementation in a manufacturing industry. Hemant Singh Rajput et al. OEE can be improved by the reduction in downtime which can be achieved by carrying out the preventive maintenance at regular intervals.
Harsha G Hegde et al. The availability, performance rate and quality rate must increase individually in order to get an increase in OEE. Improved production rates and delivery time can be achieved as a result of increase in OEE of the machine.
Kalpande [21] highlighted that OEE gives the ability to analyze the machines for productivity improvements. OEE is a process to analyze the efficiency of a machine and it can help to improve the quality as well as productivity, with the help of TPM implementation. Amit Kumar Gupta et al. Amit Bajaj et al. Vijayakumar et al. Disha M Nayak et al. The performance rate can be improved by reducing mainly speed losses, quality losses and downtime losses. This can be achieved by reducing the non-productive events by implementing new techniques and tools, standardized speed for running the line, skilled labours, and special purpose machinery without affecting the shop floor environment.
Abhijit Chakraborty et al. Pradeep Kumar et al. Sivaselvam et al. An efficient data collection is very important for the meaningful OEE calculation.
OEE helps to determine the current situation of the production system, effectiveness of the maintenance system, conditions of the machines, All rights reserved by www. Nazim Baluch et al. OEE is an important measure of efficiency and improvements in OEE have a direct positive impact on the bottom line, to get a greater return on the investment ROI. OEE also give businesses a valid comparative measurement across own plant and potentially against competitors.
Ahmed et al. William M. Goriwondo et al. Proper training and education plays a great role in achieving the OEE improvement and machine utilization. Vinayak Suryawanshi et al. Liu Yong et al. OEE is a tool to analyze and diagnose the causes and deficiency, whereas OEE improvement needs the organization to take different measures suitable to themselves to improve the situation. Improvement in OEE due to TPM implementation ensures the accurate delivery of orders, high product quality, savings in labor and materials costs, reduced maintenance expenditures and wastes, energy and resource economization, maximized return on investment ROI.
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