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.

 TOTAL PRODUCTIVE MAINTENANCE

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, especially through methods for

increasing the effectiveness of equipment.

TPM became more broadly known in the Western world in the late 1980s when Productivity, Inc. published English

editions of two books by JIPM expert Seiichi Nakajima: Introduction to TPM and TPM Development Program.
TPM implementation involves applying continuous improvement methods to reduce losses. Because the actual process of

adding value to products usually involves machines and equipment, TPM focuses its improvement activities

on equipment-related losses.

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 is rare. The difference between the ideal and the actual situation 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.

THE SIX BIG LOSSES

Looking at machine operation, we distinguish six types of waste we refer to as losses, because they reflect lost

effectiveness of the equipment.

These six big losses are grouped in three major categories: downtime, speed losses, and defect losses.

The Six Big Losses

Loss Categories The Six Big Losses

Downtime Equipment failures

(lost availability) Setup and adjustments

Speed losses Idling and minor stoppages

(lost performance) Reduced speed operation

Defect losses  Scrap and rework

(lost quality)  Startup losses

 

DOWNTIME
Downtime refers to time when the machine should be running, but it stands still. Downtime includes two main types of

loss: equipment failures, and setup and adjustments.

EQUIPMENT FAILURES
Sudden and unexpected equipment failures, or breakdowns, are an obvious cause of loss, since an equipment failure

means that the machine is not producing any output.

SETUP AND ADJUSTMENTS

Most machine changeovers require some period of shutdown so that internal tools can be exchanged. The time between

the end of production of the last good part and the end of production of the next good part is downtime. This downtime

loss often includes substantial time spent making adjustments until the machine gives acceptable quality on the new part.
SPEED LOSSES
A speed loss means that the equipment is running, but it is not running at its maximum designed speed. Speed losses

include two main types of loss: idling and minor stoppages, and reduced speed operation. 

IDLING AND MINOR STOPPAGES

When a machine is not running smoothly and at a stable speed, it will lose speed and obstruct a smooth flow. The idling

and stoppages in this case are caused not by technical failures, but by small problems such as parts that block sensors

or get caught in chutes. Although the operator can easily correct such problems when they occur, the frequent halts can

dramatically reduce the effectiveness of the equipment.

REDUCED SPEED OPERATION

Reduced speed operation refers to the difference between the actual operating speed and the equipment’s designed

speed (also referred to as nameplate capacity). There is often a gap between what people believe is the "maximum"

speed and the actual designed maximum speed. The goal is to eliminate the gap between the actual speed and the

designed speed. Significant losses from reduced speed operation are often neglected or underestimated.

DEFECT LOSSES
A defect loss means that the equipment is producing products that do not fully meet the specified quality characteristics.

Defect losses include two major types of loss: scrap and rework, and startup losses. 
SCRAP AND REWORK
Loss occurs when products do not meet quality specifications, even if they can be reworked to correct the problem. The

goal should be zero defects —to make the product right the first time and every time.

STARTUP LOSSES
Startup losses are yield losses that occur when production is not immediately stable at equipment startup, so the first

products do not meet specifications. This is a latent loss, often accepted as inevitable, & it can be surprisingly large.

OVERALL EQUIPMENT EFFECTIVENESS AND THE TPM VISION

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.

In the West, the measure of whether an improvement process is succeeding often rests on the ultimate result of the

process: the money it makes or loses. This seems rational, since making money is the ultimate goal of industry. The

financial bottom line, however, provides little or no information about what is actually going on within the process;

Thus it gives little real feedback and focus to the things we actually need to do to improve the process. If there is a gap

between our daily process and the ideal situation, it makes sense to focus on this gap & look for ways to eliminate it.

TPM helps us do this by focusing on the six big losses—the gaps—to improve the effectiveness of the equipment. By

applying a gauge that measures the six big losses, we can focus on improving the right things—the losses we want to

eliminate.

THE OVERALL EQUIPMENT EFFECTIVENESS METRIC

Most industries have some kind of gauge system on their equipment that measures quantities such as uptime, units

produced, and sometimes even the production speed. These are appropriate things to look at if the focus is on what’s

coming out of the machine.

TPM takes a slightly different approach. Besides what’s coming out of the machine, we also want to know what could

have come out, and where we are losing effectiveness. Overall equipment effectiveness, or OEE, offers a simple but

powerful measurement tool to get inside information on what is actually happening.

The OEE calculation is a metric that gives us daily information about how effectively the machine is running and which of

the six big losses we need to improve. Overall equipment effectiveness is not the only indicator to assess a production

system, but it is certainly very important if our goal is improvement.

THE ELEMENTS OF OVERALL EQUIPMENT EFFECTIVENESS

The three main categories of equipment-related losses—downtime, speed loss, and defect or quality loss—are also the

main ingredients for determining the overall equipment effectiveness. Overall equipment effectiveness is calculated by

combining three factors that reflect these losses: the availability rate, the performance rate, and the quality rate.

The availability rate is the time the equipment is really

running, versus the time it could have been running.

A low availability rate reflects downtime losses:

• Equipment failures

• Setup and adjustments

The performance rate is the quantity produced during the

running time, versus the potential quantity, given the

designed speed of the equipment.

A low performance rate reflects speed losses:

• Idling and minor stoppages

• Reduced speed operation

The quality rate is the amount of good products versus the

total amount of products produced. 

A low quality rate reflects defect losses:

• Scrap and rework

• Startup losses

 
To calculate OEE, we multiply the three factors together:

OEE = Availability Rate x Performance Rate x Quality Rate

The Goal and Benefits of OEE Measurement

The goal of measuring OEE is to improve the effectiveness of your equipment. Since equipment effectiveness affects

shop floor employees more than any other group, it is appropriate for them to be involved in tracking OEE and in

planning and implementing equipment improvements to reduce lost effectiveness. Let’s look at some of the benefits of

OEE measurement for operators and shift leaders or line managers.

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

OCCUPATION HEALTH AND SAFETY ASSESSMENT [OHSAS]:-

The OHSAS 18000 series is the emerging standard set occupational safety and health. It consists of two publications, as

follows:

OHSAS18001 
This is the "Occupational Health and Safety Management Systems Specification". It was developed in response to urgent

demand for a recognized standard against which occupational safety management systems can be assessed. It is

compatible with ISO 9001 and ISO 14001.

It covers issues such as planning for hazard identification, risk assessment/control, OHS management, awareness and

competence, training, communication, emergency preparedness and response, performance measuring and improvement

Elements of OHSAS 18001:-

 Occupational Health and Safety Policy

 Planning

 Implementation and Operations

 Checking and Corrective Actions

 Management Review

 Continual Improvement

It covers issues such as planning for hazard identification, risk assessment/control, OHS management, awareness and

competence, training, communication, emergency preparedness and response, performance measuring and improvement.

OHSAS18002 
This provides guidelines for the implementation of OHSAS 18001. It explains the requirements of this and how to work

towards implementation/registration.
WHO SHOULD APPLY:- Organizations of all size and type (manufacturers or service providers) willing to improve
their health and safety performance. Organizations who want to demonstrate their health and safety sensitivity and

responsiveness to their customers, employees and society at large.

How Can OHSAS Help :- 

 Establish an OH&S management system to eliminate or minimize risk to employees and other interested parties

who may be exposed to OH&S risks associated with its activities

 Assure itself of its conformance with its stated OH&S policy

 Demonstrate such conformance to others

 Implement, maintain and continually improve an OH&S management system

 Make a self-determination and declaration of conformance with this OHSAS specification.

 Seek certification/registration of its OH&S management system by an external organization.

Essentially, OHSAS helps in a variety of respects it helps: minimize risk to employees/etc; improve an existing OH&S

management system; demonstrate diligence; gain assurance; etc. The benefits can be substantial. 

BENEFITS:-
 Enhanced employee motivation and acceptance regarding occupational health and safety

 Reduction in possibilities of accidents and incidents

 Reduced health and safety related risks resulting in reduced costs

 Improved legal compliance

 Improved image and competitive ability by way of sustained OH&S performance

 Reduced material and man-days loss due to accidents and production breakdowns

 Lower insurance costs

 Better identification of hazards and risk management.

 Involving all levels of the organization through setting objectives, targets and documented responsibilities.

 Promotion of teamwork through improved communication at all levels, with relevant business partners and third

parties