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TPM Chapter 4 - OEE

In my previous blog I talked about the concept of 5S and how it can be used as an effective management tool. In this blog, I’ll be talking about Overall Equipment Efficiency (OEE) which forms the key measuring indicator of the entire TPM activity in an organization. OEE tells you about your equipment’s efficiency by determining the losses associated with it.
According to TPM, there are 16 major losses in any manufacturing unit as mentioned below:
Breakdown Loss

Losses that impede equipment efficiency
Setup & Adjustment Loss
Cutting Blade Loss
Start-up loss
Minor Stoppage/Idling Loss
Speed Loss
Defect/Rework Loss
Scheduled Downtime loss or Planned Downtime
Management Loss

Losses that impede human work efficiency
Operation Motion Loss
Line Organization Loss
Logistic Loss
Measurement and Adjustment Loss
Energy Loss

Losses that impede effective use of production resources
Die, Jig and Tool breakage Loss
Yield Loss

But out of these 16 losses, the top 7 losses are used to calculate OEE. The 8th loss – Scheduled downtime/ planned downtime loss is not considered while calculating OEE. The formula of OEE and the 7 losses associated with it are shown as follows:
Source: Internet
·         Loading Time = Available Time – Planned/ Scheduled Downtime
o   E.g. Available Time = 24*60 = 1440 minutes
o   Planned Downtime = 120 minutes
o   Then, Loading Time = Available Time – Planned Downtime
= 1440 – 120 = 1320 minutes

OEE can be calculated for an equipment, a line or an entire plant.
Few points to be noted here are as follows:
·      Cutting-tool replacement loss is not necessarily applicable in all industries/processes, so it can be ignored depending on one’s machinery and processes.
·     Minor Stops and Idling loss are those that are normally less than 5 min (however some industries also consider stops of up to 10 minutes in this category)

The top 4 losses mentioned in the table above are referred to as Availability Losses, the next two losses are referred to as Performance Losses and the last loss is referred to as Quality Loss. OEE gives you an idea about the losses taking place in your equipment. Based on these losses, you need to take necessary actions so as to improve your OEE.
According to TPM concept, the OEE of a good manufacturing unit should be above 85%. To achieve this, a general rule of thumb is that Availability > 90%, Performance > 95% and Quality > 99%. However the basic idea is to identify the losses and work towards them to eliminate or reduce them.
To calculate OEE accurately, you need to have accurate data available with you and you can have accurate data available with you only if you maintain all the required data either manually or through a software. But first you need to be clear about which downtime to be put under which head.
Once the OEE calculation is over, the next and the most important step is to use it as a tool to improve the efficiency of the machines. Merely calculating OEE and displaying in your plants and presentations will do no good to you unless proper actions are taken based on it.

In my next blog, I’ll be talking about how to effectively use OEE to achieve your targets.

TPM & Business Development Manager
SKAPS Industries


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