This document discusses overall equipment efficiency (OEE) and identifies various losses that can impact efficiency. It defines OEE as a composite measure of availability, performance rate, and quality rate. Sixteen major losses are grouped into seven losses impacting equipment efficiency, losses impacting machine loading time, five losses impacting human work efficiency, and three losses impacting material and energy efficiency. Examples are provided to demonstrate how to calculate OEE based on various time and production metrics.

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SOP - OEE
OVERALL EQUIPMENT EFFECIENCY

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• Indicator is a composite measure of the process
performance and includes-Availability of
equipment,Equipment Performance and Quality
performance.
• It shows how well the company is utilizing
resources, which includes equipment, labour
and ability to satisfy the customer in terms of
matching the quality specification.
 This indicator should increase with time.
OVERALL EQUIPMENT EFFECIENCY (OEE)

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OBJECTIVES OF OEE
1. REDUCE BREAKDOWN
2. FREQUENT RESPONSE TO EQUIPMENT ABNORMALITIES
3. TO ELIMINATE QUALITY DEFECTS
4. IMPROVE PRODUCTIVITY
5. REDUCE FATIGUE
6. REDUCE UNNECESSARY FOLLOWUPS

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SIXTEEN MAJOR LOSSES THAT CAN IMPEDE EFFICIENCY IMPROVEMENT
The following 16 major losses can hamper efficiency improvement these individual losses are explained in
the subsequent sections.
1) Seven major losses that can impede equipment efficiency
 Failure Losses
 Setting up/adjustment losses
 Cutting –blade losses
 Start – up losses
 Minor stoppage/idling losses
 Speed losses
 Defect/rework losses
2) Losses that can impede machine loading time
 Shutdown (SD) losses
3) Five major losses that can impede improvement of human work efficiency.
 Management Losses
 Motion Losses
 Arrangement Losses
 Losses resulting from lack of automated systems
 Monitoring and adjustment losses

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4) Three major losses that can impede effective use of product resources
 Yield Losses
 Energy Losses
 Die, jig and fixture losses

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[Manpower Efficiency] [Equipment Efficiency]
5MajorLossesPreventingEfficiencyof
Manpower
Waiting
instruction loss
Waiting material
loss
Equipment
downtime loss
Equipment
performance
loss
Method/
procedures loss
Skills and morale
loss
Line organization
loss
Unautomated
system loss
9. Management
loss
12. Logistics loss
13. Measurement and
adjustment loss
Excluding man-
hour (Supported
by other
departments)
Production
Man-hour
loss
Line
organisa-
tion man-
hour loss
<Equipment>
Man-hour Elapsed time
<person>
8. Breakdown loss
1. Equipment
failure loss
2. Set-up loss
4. Start - up loss
Other downtime loss
5. Minor stoppage &
idling loss
6. Reduced speed
7. Defects and
rework loss
3. Cutting blade and
jig change loss
Operated man-hour
Duty hour
Loading man-hour Loading time
Net operational
Man-hour Operating time
Effective
man-hour
Net Operating
time
Valued man-hour
(man-hour for
turnout)
Valued
operating time
Scheduled
downtime
Scheduled
downtime
Downtime
loss
Performance
loss
Defects
quality
loss
(Adjustment of
measurement)
Cleaning
checking
Waiting
instruction
Quality
confirmation
Waiting
personnel
distribution
Waiting
materials
Start-up loss
Overload loss
Radiation loss
15. Energy loss
Input energy Loading time
Effective energy
No. of qualified
products
Weight of
qualified products
<Energy> <Materials>
Start-up loss
Cutting loss
Losses in weight
Losses in excesses
(increased commission)
14. Yield loss
Defects quality loss
[Efficiency of material and energy] ………
3 Major Losses Preventing Efficiency of Material and Energy.
16. Die and Tool loss
8MajorLossesPreventingEfficiencyofequipment
10. Operating
motions loss
Defects
in man-
hour
loss11. Line organisation
loss
Loss Structure During Production Activities (16 Major Losses)
[Manpower Efficiency] [Equipment Efficiency]
5MajorLossesPreventingEfficiencyof
Manpower
Waiting
instruction loss
Waiting material
loss
Equipment
downtime loss
Equipment
performance
loss
Method/
procedures loss
Skills and morale
loss
Line organization
loss
Unautomated
system loss
9. Management
loss
12. Logistics loss
13. Measurement and
adjustment loss
Excluding man-
hour (Supported
by other
departments)
Production
Man-hour
loss
Line
organisa-
tion man-
hour loss
<Equipment>
Man-hour Elapsed time
<person>
8. Breakdown loss
1. Equipment
failure loss
2. Set-up loss
4. Start - up loss
Other downtime loss
5. Minor stoppage &
idling loss
6. Reduced speed
7. Defects and
rework loss
3. Cutting blade and
jig change loss
Operated man-hour
Duty hour
Loading man-hour Loading time
Net operational
Man-hour Operating time
Effective
man-hour
Net Operating
time
Valued man-hour
(man-hour for
turnout)
Valued
operating time
Scheduled
downtime
Scheduled
downtime
Downtime
loss
Performance
loss
Defects
quality
loss
(Adjustment of
measurement)
Cleaning
checking
Waiting
instruction
Quality
confirmation
Waiting
personnel
distribution
Waiting
materials
Start-up loss
Overload loss
Radiation loss
15. Energy loss
Input energy Loading time
Effective energy
No. of qualified
products
Weight of
qualified products
<Energy> <Materials>
Start-up loss
Cutting loss
Losses in weight
Losses in excesses
(increased commission)
14. Yield loss
Defects quality loss
[Efficiency of material and energy] ………
3 Major Losses Preventing Efficiency of Material and Energy.
16. Die and Tool loss
8MajorLossesPreventingEfficiencyofequipment
10. Operating
motions loss
Defects
in man-
hour
loss11. Line organisation
loss
[Manpower Efficiency] [Equipment Efficiency]
5MajorLossesPreventingEfficiencyof
Manpower
Waiting
instruction loss
Waiting material
loss
Equipment
downtime loss
Equipment
performance
loss
Method/
procedures loss
Skills and morale
loss
Line organization
loss
Unautomated
system loss
9. Management
loss
12. Logistics loss
13. Measurement and
adjustment loss
Excluding man-
hour (Supported
by other
departments)
Production
Man-hour
loss
Line
organisa-
tion man-
hour loss
<Equipment>
Man-hour Elapsed time
<person>
8. Breakdown loss
1. Equipment
failure loss
2. Set-up loss
4. Start - up loss
Other downtime loss
5. Minor stoppage &
idling loss
6. Reduced speed
7. Defects and
rework loss
3. Cutting blade and
jig change loss
8. Breakdown loss
1. Equipment
failure loss
2. Set-up loss
4. Start - up loss
Other downtime loss
5. Minor stoppage &
idling loss
6. Reduced speed
7. Defects and
rework loss
3. Cutting blade and
jig change loss
Operated man-hour
Duty hour
Loading man-hour Loading time
Net operational
Man-hour Operating time
Effective
man-hour
Net Operating
time
Valued man-hour
(man-hour for
turnout)
Valued
operating time
Operated man-hour
Duty hour
Loading man-hour Loading time
Net operational
Man-hour Operating time
Effective
man-hour
Net Operating
time
Valued man-hour
(man-hour for
turnout)
Valued
operating time
Scheduled
downtime
Scheduled
downtime
Downtime
loss
Performance
loss
Performance
loss
Defects
quality
loss
(Adjustment of
measurement)
Cleaning
checking
Waiting
instruction
Quality
confirmation
Waiting
personnel
distribution
Waiting
materials
Start-up loss
Overload loss
Radiation loss
15. Energy loss
Input energy Loading time
Effective energy
No. of qualified
products
Weight of
qualified products
Input energy Loading time
Effective energy
No. of qualified
products
Weight of
qualified products
<Energy> <Materials>
Start-up loss
Cutting loss
Losses in weight
Losses in excesses
(increased commission)
14. Yield loss
Defects quality loss
[Efficiency of material and energy] ………
3 Major Losses Preventing Efficiency of Material and Energy.
16. Die and Tool loss
8MajorLossesPreventingEfficiencyofequipment
10. Operating
motions loss
Defects
in man-
hour
loss11. Line organisation
loss
Loss Structure During Production Activities (16 Major Losses)
1©ConfederationofIndianIndustry

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Unit of this measure is : % - percentage
OEE is calculated for critical machines by combining
three elements, as per flowchart.
Overall Availability Performance Rate Of
Equipment = Rate X Rate X Quality X 100
Effeciency
OVERALL EQUIPMENT EFFECIENCY

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Availability = (Loading time – Downtime) / Loading time.
Performance rate = Net utilization ratio x Speed utilization ratio
Where
Net operating rate means continuance, and minor stoppage losses are to be calculated.
Net Utilization Ratio = Output x Actual cycle time / (Loading time – downtime)
Speed operating rate indicates speed difference
Speed Utilization Ratio= Standard cycle time / Actual time.
 Quality products rate = No. of quality products / Input volume
Where
 No of quality product
= Input volume – Start – up defect volume + No. of process defects + No. of rework cases)
Overall equipment efficiency =
Availability x Performance rate x Quality products rate

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1) Working hours
Working hours is the amount of time equipment can operate in a day
or month.
2) Loading time
The loading time is the amount of time equipment must operate in a
day or month.
3) Operating time
The operating time is the amount of time the equipment actually
operates.
4) Net operating time
This is the net time that equipment is operated at a specific speed,
minus losses.
5) Valued operating time
This is the time derived by subtracting the time for manufacturing
defective / rework products from the net operating time; i.e the time in
which only excellent products were produced.
Structure of 7 Major Equipment Losses

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6) Availability
This is the ratio of the net time, excluding the equipment stoppage
time, to the loading time.
7) Performance rate
The performance rate is composed of the speed operating rate and
the net operating rate.
8) Rate of Quality
Rate of Quality is the ratio of produced quality products (good
output) to the number of processed products (which includes total
output including defectives).
9) Overall equipment efficiency
Overall equipment efficiency is a product of the availability, the
performance rate, and the quality products rate.

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(Example) Stoppage breakdown
Working hours per day : 60 min x 8 hours = 480 min
Loading time per day : 460 min
Operating time per day : 400 min
Output per day : 400 units
Availability = 400x100 / 460 = 87%
Standard cycle time 0.5 min/unit
Actual cycle time 0.8 min/unit
Speed performance rate = 0.5 x 100 / 0.8 = 62.5%
Net operating rate = 400 units x 0.8 / 400 min = 80%
(1-Net utilization ratio) represents minor stoppage losses.
Performance rate = 0.625 x 0.800 x 100 = 50%
Quality products rate = 98%
Overall equipment efficiency = 0.87x x 0.5 x 0.98 x 100 = 42.6%
Setting up … 20 min
Failures … 20 min
Adjustments … 20 min
Defects … 2%

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The improvement of production efficiency means obtaining maximum
output while minimizing required input (materials, manpower, equipment,
energy etc.) The key to this has in increasing added value and reducing
manufacturing cost. To attain these purposes, the following activities are
required :
1) Activities for quantitative expansion
 Activities to enhance equipment efficiency
 Activities to raise human work efficiency
 Activities to raise control efficiency
Activities for quantitative expansion depend on the means to reduce non operative
time of equipment and means to increase output per unit to time
2) Activities for qualitative improvement
 Activities to improve product quality
 Activities to promote unattended production
.Activities for qualitative improvement pursue reduction of defects through quality-
upgrading and quality-level improvement
What is the improvement of Production Efficiency?

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1) Failure Losses
As these losses are due to sporadic/chronic failures, they are
accompanied by time losses (output decline) and volume losses
(occurrence of defects.)
Therefore, the definition of defects is set as follows :
 Cases accompanied by function stoppage or decline (normally or typically
accompanied by production stoppage or output decline)
 Cases requiring replacement of parts or repair in order to recover function.
 Cases requiring 5-10 minutes or more for repair
2)Setup and adjustment losses
“Setup and adjustment losses” refers to time losses from the end of
the production of a previous item through product-change
adjustment to the point where the production of the new item is
completely satisfactory.
“One-shot machining in which quality production is possible” means a method of
manufacturing excellent products from the beginning without trial manufacturing
after the exchange of jigs.
Seven Major Losses That Can Impede
Equipment Efficiency

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3. Cutting – blade Losses
These are time losses due to regular cutting – blade exchanges and
extraordinary replacement necessitated by blade damage and volume
losses (defects and rework ) that arise before and after blade
replacement.
4. Start-up Losses
Start-up Losses are defined as time losses from
 Start-up after periodic repair,
 Start-up after holidays,
 Start-up after lunch breaks
5. Minor Stoppage / Idling Losses
The definition of these losses is a s follows :
 Losses that are accompanied by temporary functional stoppage
 Losses allowing functional recovery through simple measure
(removal of abnormal work pieces and resetting)
 Losses that do not require parts exchange or repair
 Losses that require from 3-5 seconds to less than 5 minutes for
recovery.)

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6. Speed Losses
The are losses that occur because the equipment speed is slow. They
can be defined as follows :
 Losses due to a difference between the design speed (or standard
speed for the item concerned ) and the actual speed
 Losses caused when the design speed is lower than present
technological standards or the desirable condition.
7. Defect/rework Losses
 Defect/rework losses are defined as volume losses due to defects
and rework (disposal defects), and time losses required to repair
defective products to turn them into excellent products.

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1) SD (Shutdown) losses
There are time losses occasioned when equipment is stopped for
planned maintenance, as well as volume losses that occur due to
equipment start-up. These are an unavoidable aspect of the
equipment.
Work during a shutdown involves cleaning, inspection, parts
replacement, overhauling, and precision checking.
Losses that can impede equipment operating rate

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Five Major Losses that can impede Human work
Efficiency
These are collectively called worker-hour losses. Such
losses can be divided into time losses resulting from wasted
motions and inefficient work methods or workers, as well as
inefficient plant lay outs, and time losses due to work other
than the target work (extraordinary work).
1) Management Losses
These are waiting time losses that occur during management,
such as waiting for materials, instructions, and defect repair.
2) Motion Losses
These include motion losses due to violation of motion
economy, losses that occur as a result of skill differences, and
walking losses attributable to an inefficient layout.

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3) Arrangement Losses
These are waiting time losses involving multi-process and multi-stand
operators and line-balance losses in conveyor work.
4) Losses resulting from Lack of automated systems
These are personnel losses resulting from non-replacement with
automated systems, although such replacement could be done.
e.g. : automated loading and unloading leading
5) Monitoring and adjustment Losses
These are worker-hour losses that result from frequent
implementation of monitoring and adjustment to prevent occurrence of
quality defects and flow-out.

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1)Yield Losses
These are volume losses stemming from weight differences between raw
materials and products or between all raw material input and the
products.
2)Energy Losses
These are losses of such energy as electric power, fuel, steam, air and
water (including wastewater)
3)Die, jig, and fixture losses (including sub-material losses)
These are monetary losses resulting from the manufacturing and repair
of dies, jigs, and tools necessary for the production of products.
Three Major Losses that can impede effective
use of production resources

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