OEE improvement strategy

Strategy for OEE improvement via Industry 4.0


OEE, or Overall Equipment Effectiveness, is a brilliant invention that, in a single number, tells you how much waste there is on your shop floor. It is merely the ratio of what you produced to what you could have produced – the actual output to the theoretical maximum capacity. It is a direct measure of your profitability and return on investment. OEE improvement directly translates to profitability improvement.

OEE improvement using machine monitoring system
OEE – how it is calculated


Availability: Is the machine operating or not? The ratio of the time that the machine was running, to the time that it could have actually run. The difference is because of idle time caused by breakdowns, setup, shift-change, etc.


Performance: How fast is the machine running? The ratio of the number of parts produced to the number of parts that theoretically could have been produced in the time that the machine was running. The difference could be because of inspection, insert changes, tool breakage, etc. between the start and end of a cycle. On a CNC machine, the difference could be due to using the feed rate or spindle speed override.


Quality: How many good parts were made? The ratio of the number of parts that pass quality inspection to the total number of parts made. The difference is the number of parts rejected. OEE allows you to measure and reduce waste (of available time, machine capacity, raw material) on the shop floor. It is a single number that you can communicate to, and is understood by, everybody from the machine operator to the President. It can be tracked month-on-month, improved upon.

Example:
Available time in a day = 20 hours (minus meal breaks and shift changes).
Running time = 16 hours (4 hours lost due to breakdowns, setup change).
Theoretical production=200 parts
Real production=180
parts Good production=160 parts Availability= 16/20 = 0.8
Performance= 180/200 = 0.9
Quality=160/180=0.88 OEE = A x P x Q = 0.8 x 0.9 x 0.88 = 0.63


Notice how fast we go from “Ah, those are great numbers for A, P and Q” to “Oh man, this OEE kind of sucks” ? This number means that only 63 % of the available capacity is being used, and there’s a 37 % wastage. That’s awful, but it’s way better than the number in an average shop floor. In terms of return on investment, 63 % OEE is like paying for a banana, and getting only 2/3 of it.

OEE improvement needs a good knowledge of its components
OEE – what you get vs what you expected


OEE improvement is only possible if you continuously measure and track it and its components A, P and Q. Your OEE improvement strategy must include a machine monitoring system that automatically tracks production, machine downtime and rejections.

OEE improvement: How do Industry 4.0 and a machine monitoring system help ?

This is what typically happens on a manufacturing shop floor:
The scheduling guys make a production schedule for a particular product based on sales, and pass it on to the shop floor guys. They then fold their hands, sit back and relax, thinking that stuff is being made according to the schedule. The story on the shop floor is however different. The machine on which the part is to be made has a breakdown, and the part is not actually being made according to schedule. This is not known till the next morning, when various departments have a meeting. You can change ‘breakdown’ to ‘operator absent’ or ‘no raw material’ or ‘accident’, and the story remains the same. This story can be changed with a machine monitoring system.

Accurate data is a must for OEE improvement

This is happening because on the shop floor you may have computers, but these are not talking directly to the machines. People collect data, then enter this data in the computers. This is not done in real time (‘real time’ = the actual time at which an event occurs). The updating of data may be done once a day or once a shift. It may also be manipulated, falsified (and often is). In a manufacturing company, the shop floor is the heart of the company, the place where money is actually made. For OEE improvement you need accurate and instant numbers, and this can only come from monitoring 24/7.


How do you get data accurately and instantly ?
You do this by making your computers talk directly to the machines, instead of to the people running the machines. People cannot continuously collect data and feed it into into computers 24/7, but machines can, in an Industry 4.0 system. You cannot connect a computers and software directly to most machines (unless the machine itself is computer controlled). This is where a sensor comes in.

A sensor in Industry 4.0 is a piece of electronic hardware that has inbuilt, or ‘embedded’ software. The sensor senses what the machine is up to at any given instant – what is the production quantity, is the machine running or idle, etc. – and transmits this data through the Internet (this is called IIOT, or Industrial Internet of Things), to a remote computer on the Cloud. Software on this computer analyzes the data and displays reports or generates alerts in case it finds some big problems. So a monitoring system based on Industry 4.0 design principles has the basic Industry 4.0 components shown in this picture.

machine monitoring via industry 4.0


What can be monitored in a manufacturing shop floor ?
Machines in ANY manufacturing company can be monitored, and Industry 4.0 examples can be found in industries like food, pharmaceuticals, metal parts, plastic parts, textiles, garments, paper, etc. The machine monitoring system tracks the production quantity, machine uptime, machine downtime, reasons for downtimes, and part quality. It reports the production quantity, quality, uptime, downtime, OEE and maintenance parameters. It provides data for preventive maintenance and predictive maintenance. It alerts (through SMS or email) when there’s a production shortfall, too high downtime, too high rejections, breakdown, etc. The reports can be seen on any PC, tablet or mobile phone. The alerts can be seen on a mobile phone or PC.

Strategy for seeing rapid OEE improvement – tackle the low hanging fruit first


You have two types of machine downtime on the shop floor – the low hanging fruit that can be plucked easily, and the high hanging fruit that require some time and money to pluck. The low hanging fruit is downtime caused by poor work ethics, while the high hanging fruit is system and process issues (that’s a litchi tree in the picture, by the way). In your OEE improvement plan, ensure that you minimize the downtime due to work ethics issues first.

OEE improvement plan based on machine monitoring system - low hanging fruit


To reduce downtime, attack the low hanging fruit first. Examples:
1. Operator starts the machine late at the shift start. E.g., shift starts at 6 AM, machine starts at 6:30 AM. 
2. Lunch and tea breaks extend beyond the allotted time.
3. When there’s a machine breakdown, the maintenance guy arrives happily after half an hour.
4. Operator stops the machine early at the shift end. E.g., shift ends at 2 PM, machine stops at 1:45 PM.
5. Machine works for the first half of the night shift, the operator then sleeps for the rest of the shift.


Let’s say your shop is working 22 hours a day in 3 shifts (minus the lunch and tea breaks). Downtimes 1 to 4 in the list above can add up to 1 hour per shift on a lot of shop floors – that’s a massive 13 % of available time, accounting for 13 % reduction in OEE. Downtime 5 alone is 18 %. Your low hanging fruit here is between 13 % and 31 %. If you eliminate this, it can do wonders for your profitability. If you are in the 31 % bracket (a surprisingly large numbers of shops are), these are your possible benefits if you cut this downtime to zero:
1. Do the same production in 2 shifts instead of 3. Reduce the number of operators, supervisors, energy cost for running machines, lighting, etc., reduced canteen bills for food in the night shift.
2. Do the same production with 69 % of the machines. Reduce , space, operators, supervisors, energy cost.
3. Increase your revenue by 29 % with the same number of machines.

See these actual case real of LEANworx users:
OEE improvment of 23 % in 5 months
Big downtime eliminated with a simple fix


To pluck this low hanging fruit in OEE improvement, all you have to do is invest in an Industry 4.0 based machine monitoring system that tells you when each machine is running, when it is idle, the production quantity, etc. Once such a system is in place, people automatically fall in line without you having to tell them anything. I have seen this happening in just 2 weeks after installing our LEANworks Industry 4.0 system. LEANworx has reports that highlight downtimes at shift changes and in the night shift. We just recommend to our users that they print these reports and put them on the shop notice board each day. The poor work ethics vanishes automatically, without anyone having to talk to or reprimand anybody.


Etc

Speaking of low hanging fruit and litchis…


Did you know that Muzaffarpur, in Bihar, is India’s litchi (also spelt lychee) capital ? 75 percent of India’s litchi production is from Bihar, and most of this again is from Muzaffarpur (not to be confused with Muzaffarnagar, which is in UP). India is the second largest producer of litchis in the world, after China. Muzaffarpur is Bihar’s largest city and is named after Muzaffar Khan, an Amil (Revenue Officer) in the British Raj in the 18th century. The National Research Centre on Litchi, quite appropriately, is based in the city.

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My home in Bangalore has a rather unhappy litchi tree that yields about 50 fruits every summer, instead of the thousands that the ones in Muzaffarpur do. No idea why it’s unhappy – doesn’t like the weather, doesn’t like the pollution, wants to go back to its home town in Bihar, who knows ? The tragedy is not that there are just 50 fruits. The tragedy is that even these are eaten up by monkeys and squirrels, and we haven’t eaten a single one of them, ever.

This guy in the picture was polishing off the crop last summer with a pensive look on his face, from our tree that is just a few feet away from a balcony in the living room. We kind of coexist with the monkeys – we let them eat our litchis and mangoes, in return for the joy of watching their antics.


About his blog from LEANworx: Plug-and-play Industry 4.0 system for MSMEs.



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