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OVERALL
EQUIPMENT
EFFECTIVENESS
Eliminate Losses, Improve OEE

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Learning Objectives
1. Understand the concept and philosophy of TPM and its
relationship with OEE
2. Explain the importance of OEE and how it relates to value-adding
work of the factory
3. Understand OEE concepts such as Availability, Performance,
Quality and the Six Major Losses
4. Describe the steps of collecting and processing OEE data and
reporting results
5. Define approaches for reducing equipment-related losses to raise
OEE

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Outline
Copyrights of all the pictures used in this presentation are held by their respective owners.
Understanding Equipment-related Losses
2
Introduction to TPM and OEE
1
Improving OEE
4
Measuring OEE
3

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What is OEE?
• Overall Equipment Effectiveness (OEE) is a measurement used in
TPM to indicate how effectively machines are running
• OEE is calculated from three underlying factors:
§ Availability
§ Performance
§ Quality
• Each of these factors represents a different perspective of how close
your manufacturing process is to perfect production

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What is OEE?
• Availability
§ A comparison of the potential operating time and the time in which the
machine is actually making products
• Performance (Efficiency)
§ A comparison of the actual output with what the machine should be
producing in the same time
• Quality
§ A comparison of the number of products made and the number of
products that meet the customer’s specifications
OEE = Availability X Performance X Quality

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Why is OEE Important?
• OEE is expressed as a percentage
§ It gives a complete picture of the machine’s “health”
§ Indicates not just how fast it can make parts but how much the potential
output is limited due to lost availability or poor quality
• Effectiveness focuses on the equipment, not the person
• OEE measurement helps us to direct improvement efforts on the
equipment or process

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OEE: An Indicator of Equipment Health
Overall Equipment
Effectiveness
Availability
Breakdowns
Setups &
Adjustments
Performance
Reduced Speed
Minor Stops &
Idling
Quality
Defects &
Rework
Startup &
Yield Loss
Six Big Losses
Source: Japan Institute of Plant Maintenance (JIPM)

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Equipment Losses & OEE
Six Big Losses
Downtime
Losses
Quality
Losses
Speed
Losses
Fully
Productive
Time
Net Operating
Time
Planned Production Time
Operating Time
Equipment
Average total operating loss
30-50%
Breakdowns
Setups &
Adjustments
Reduced
Speed
Minor Stops
& Idling
Defects &
Rework
Startup &
Yield Loss
Breakdowns per machine
(stopped longer than 10 mins)
– less than once a month
Setup/adjustment time – less
than 10 mins
Achieve ideal cycle times
(design speed); increase 15%
or more
Minor stoppages and idling
per machine – under 10 mins
Rate (including products to be
reworked) – less than 0.1%
Startup yield – 99% or more of
lot
Ideal Cycle Time x Total Pcs
Operating Time
Good Pieces
Total Pieces
Operating Time
Planned Production Time
Availability
Quality
Performance
Greater than 90%
Throughput process
- Greater than 99%
Greater than 95%
OEE Factors
OEE = Availability x Performance x Quality
Source: Adapted from ‘TPM for Supervisors’, Productivity Press Development Team

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Six Big Equipment Losses
Breakdowns
Setups &
Changeovers
Reduced Speed
Idling &
Minor Stoppages
Defects &
Rework
Startup (Yield)
Loss
6 Big Equipment
Losses
§ Conveyors
§ Transport
§ Automatic welders
§ Presses
§ Paint processes
§ Molding machines
§ Machine tools
§ Presses
§ Transfer devices
§ Sensors
§ Automated assembly
§ Grinding
§ Presses
§ Seam welding
§ Raw material
§ Components
§ Fuel
Frequent Sites
Function
Maintenance
Manufacturing
Inspection
Technical
services
Production
engineering
Source: TPM Team Guide, Productivity Press Development Team

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Breakdown Losses
• Largest of the six major equipment losses
• Caused by equipment defects which require any kind of repair.
Examples:
§ Tooling failures
§ Unplanned maintenance
§ General breakdowns
§ Equipment failure
• Losses consist of downtime with labor and spare parts required to fix
the equipment
• Magnitude is measured by downtime

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Minor Stoppage Losses
• Caused by events such as machine halting, jamming, idling,
misfeeds, blocked sensors, etc.
• Generally, these losses cannot be recorded automatically without
suitable instruments
• Formula: Losses = 100% - Performance Rate
• Many companies regard such minor stoppages as breakdowns in
order to emphasize their importance, even though no damage has
occurred to the equipment

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Approaches for Eliminating Minor Stoppages
Steps Hints
1. Get a clear idea of the loss Take a closer look at the losses from minor stoppages. See if you
can express them numerically.
2. Take care of slight
abnormalities
Slight abnormalities in the product or the processing equipment
(ones that may or may not cause trouble) should be looked at one by
one and treated as real problems.
3. Analyze the current situation Observe the situation carefully and analyze it. Consider every
condition you find, without worrying about how likely it is to cause
trouble.
4. Investigate every factor;
identify and treat all abnormal
conditions
Don’t be bound by previous criteria for judging what’s important.
Analyze not only the malfunctions but also everything that might be a
symptom as a malfunction.
5. Determine optimal
conditions
Don’t assume that machine or conveyor parts and units are currently
attached and assembled in the most appropriate ways.
Source: Focused Equipment Improvement for TPM Teams, by JIPM

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Steps for Dealing with Speed Loss
Compare the specifications
and the current state
Pinpoint the problem areas
Take measures against the
problem areas
Confirm the results
Maintain optimal conditions
Investigate the
current state
Investigate the
process principles
Investigate the
equipment idle time
•Failure records
•Defect records
•Cycle diagram
•Vibration
•Current value
•Static precision
Investigate past
problems
•Types of
breakdowns and
their handling
•Shifts in the
defect rate
•Time series-type
speed shift
•Restore
•Get rid of slight abnormalities
•Modify equipment as needed
to maintain conditions
•Design specifications
•Ideal Values
•Manual for daily inspection
standards
•Manual for periodic
inspection standards
•Problems with the
principles
•Machining conditions
Source: Focused Equipment Improvement
for TPM Teams, by JIPM

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Quality Defect & Rework Losses
• Caused by off-specification or defective products
§ Rework
§ Scrap
• Losses consist of labor required to rework the products and the cost
of the material to be scrapped
• Measured by the ratio of quality products to total production
• Sometimes designated as “quality defects in process” in order to
distinguish from defective products during start-up and adjustment
operations

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Ideas for Reducing Chronic Defects
Ideas for Reducing Chronic Defects
Look beyond the obvious • Don’t worry too much about what has the most influence
• Think systematically and take measures against every
abnormality
Review all factors carefully • Think systematically about the form the defects took to
understand what the factors are
• Give all the possible reason for them
Take abnormal conditions
seriously
• Quantify the abnormality
• Use the inspection technology for your equipment to find signs of
abnormal conditions
Clarify the relationship between
equipment and quality factors
• Determine the proper condition for each component to produce a
quality result
• Manage the components according to those principles
Monitor changes in the factors
that need to be managed
• Understand changes over time through examination,
measurement, and spot checks
• Determine treatment thresholds
Source: Focused Equipment Improvement for TPM Teams, by JIPM

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Strategies for Zero Breakdowns
• Restore equipment
• Maintain basic equipment conditions
• Adhere to standard operating procedures
• Improve operator maintenance skills
• Don’t stop at quick fixes
• Correct design weaknesses
• Study breakdowns relentlessly

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Measuring OEE
Collecting OEE
Data
Processing OEE
Data
Reporting OEE
Results
• Define what to
measure
• Make data
collection simple
• The OEE
calculation
• Storing OEE
data
• Share OEE
results
• Use charts for
visual impact

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1. Collecting OEE Data
• Make data collection simple
§ The purpose of tracking OEE is
not to make extra paperwork for
operators
§ Most likely you are already a lot
of the data required for the OEE
calculation
§ One well-designed form can
make it easy to log the OEE
data as well as other data you
need to register during daily
production

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2. Processing OEE Data
Availability = Operating Time / Planned Production Time
Performance = (Ideal Cycle Time x Total Pieces) / Operating Time
Quality = Good Pieces / Total Pieces
OEE = Availability X Performance X Quality

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3. Reporting OEE Results
• Sharing OEE information is
critical for reducing equipment-
related losses
• Operators – the people who are
closest to the equipment – need
to be aware of OEE results
• Reporting OEE information on
charts in the workplace is key to
improving future results

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Discussion Questions on OEE
1. Is it practical to use OEE as a regular measurable?
2. Should OEE number be as high as possible?
3. Is it possible to have OEE higher than 100%?
4. Should you deduct certain periods (e.g. meetings,
planned maintenance) when counting available time?

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Improving OEE
• We measure OEE to monitor
the condition of the equipment
• The purpose of measuring OEE
is to drive improvement
• Sustained improvement
requires a dedicated approach,
with management support

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Improvement Goals for the 6 Big Losses
Type of Loss Goal Explanation
1. Breakdowns 0 Should be zero for all equipment
2. Setups and adjustments minimize
As short as possible; less than 10 mins with
zero adjustments
3. Reduced speed 0
Should match or – with improvements –
exceed equipment specifications
4. Minor stoppages 0 Should be zero for all equipment
5. Defects and rework 0
Extent may vary, but goal should be
expressed in parts per million (ppm)
6. Startup loss minimize
Source: TPM for Every Operator, Productivity Press Development Team

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Approaches to Improving OEE
1. 5 Why Analysis
2. Autonomous Maintenance
3. Focused Equipment &
Process Improvement
4. Quick Changeover
5. Poka Yoke (Mistake-Proofing)
6. P-M Analysis

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5 Whys Analysis – Example 1
Why? Answer
1
Why is there oil on the
floor?
Oil leaks from the cylinder rod
when activated.
2 Why did oil leak? The O-ring was cut.
3 Why was the O-ring cut? The rod was flawed.
4 Why was the rod flawed? Dirt in the oil abrades the rod.
5 Why did dirt get in the oil?
There are holes and gaps on the
upper plate of the tank.
Source: OEE for Operators, Productivity Press Development Team

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The Three Stages of SMED
Before SMED
Internal and
external setup not
differentiated
Stage 1
Separate
internal &
external
setup
Stage 2
Convert
internal
setup to
external setup
Stage 3
Streamline
all aspects
of setup

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Improving OEE through Kaizen Event
Focused Improvement
Source: TPM Team Guide, Productivity Press Development Team
1. Set TPM Targets
2. Form a Team &
Collect Data
3. Analyze
Breakdowns &
Suggest
Improvements
4. Track & Record
Performance
5. Achieve & Verify
Targets
6. Report Results &
Recognize Team

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The 8 Steps of P-M Analysis
Identify Constituent Conditions
3
Conduct a Physical Analysis
2
Clarify the Phenomenon
1
Study 4Ms for Causal Factors
4
Determine Abnormalities to be Addressed
7
Survey Causal Factors for Abnormalities
6
Establish Optimal Conditions (Standard Values)
5
Propose and Make Improvements
8
Source: Based on Kunio, et al.

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How to Sustain TPM & OEE
• Engaging employees
• Aim for early success
• Providing active leadership
• Share success stories
• Rewards and recognition
• Continuously improve OEE
• Evolving the TPM initiative over time
and integration with Lean

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Operational Excellence Consulting is a management training and consulting
firm that assists organizations in improving business performance and
effectiveness. Based in Singapore, the firm’s mission is to create business
value for organizations through innovative design and operational excellence
management training and consulting solutions. For more information, please
visit www.oeconsulting.com.sg