Month: May 2020

What is Overall Equipment Effectiveness?

Posted: 5/14/2020

Close up of a CNC punching machine with a metal plate, part of a production line whose productivity is measured using overall equipment effectiveness.

Organizations that practice lean manufacturing seek to maximize output and work as efficiently as possible. However, manufacturing is a complex process that has many sources of waste, including equipment, machine operators, and production processes. In order to identify and reduce losses, organizations must be able to measure the efficiency of their manufacturing process. That’s where overall equipment effectiveness comes in. This article explores overall equipment effectiveness and its relation to maintenance.

What is Overall Equipment Effectiveness?

Overall equipment effectiveness (OEE) is a business metric that compares your equipment’s ideal performance to its actual performance. “Ideal performance” is considered to be a manufacturing process in which productivity is 100% – meaning that only good parts are produced, as fast as possible, without stopping. However, this level of perfection is impossible. In the real world, equipment fails, employees require breaks, and production processes are imperfect. Therefore, OEE measures how close your “actual” production process is to an ideal one.

What does OEE Mean for Maintenance?

As its name states, OEE is a measure of equipment effectiveness, not maintenance effectiveness. So, why then, should the maintenance team care about OEE? Maintenance activities influence an asset’s availability and reliability, which affect its OEE rating. Conversely, an asset’s OEE rating may change the way you schedule, manage, and carry out maintenance tasks.

Calculating overall equipment effectiveness may not be maintenance’s responsibility, but it is still valuable to learn how OEE is calculated and its significance. As you continue through this article, keep in mind that tracking and monitoring OEE is a company-wide effort, and that the activities of other non-maintenance departments factor into the OEE calculation.

Download our Common Asset Management KPIs Infographic for a quick reference to OEE.

How is OEE Calculated?

Before we jump into OEE calculations, we have a few words of caution. In order to calculate OEE, your organization should have the following in place:

OEE calculations require that you track and monitor certain data related to your manufacturing process and equipment. Each of these data points is outlined in its corresponding section below. If you are not currently tracking these values, you will need to collect this data before calculating your OEE. Once you have this information available, you may proceed.

OEE Formula

Overall equipment effectiveness formula – availability times performance times quality

Overall equipment effectiveness is the product of three factors: availability, performance, and quality.  Therefore, the OEE formula is availability multiplied by performance multiplied by quality. Each of these factors is explored below.

When performing the calculations listed, use the smallest unit of measurement you can and apply it consistently throughout. For example, if time is measured in seconds, every other time measurement should also be measured in seconds. Some time conversion may be required. Failing to use the same units of measure throughout will lead to inaccurate and useless results.

Availability

Availability formula for oee calculation – uptime divided by the sum of uptime plus downtime.

Availability is a measure of an asset’s actual runtime compared to its planned production time. To calculate availability, divide the runtime (i.e., uptime) by the planned production time (i.e., sum of uptime plus downtime).

In this formula, runtime is the amount of time when the asset is actually running and not experiencing downtime, also called uptime. Planned production time covers the entire time period the asset was expected to run, even if it did not. Therefore, planned production time is the sum of uptime plus downtime.

Asset availability takes into consideration any events that cause downtime and stop planned production for a significant amount of time. How “significant” downtime is defined depends on your organization, but it is commonly any stops that are several minutes long or long enough to warrant the tracking of the downtime event.

Downtime includes both planned and unplanned downtime. Planned downtime includes events such as setup, changeovers, adjustments, cleaning, and planned maintenance. Unplanned downtime is caused by equipment failures leading to unplanned maintenance.

Quick Reference: Data Required to Calculate Availability

  • Runtime: The amount of time the asset is not experiencing downtime; uptime.
  • Planned Production Time: The amount of time the asset was scheduled to perform its intended function.

Performance

Performance formula for oee calculation – the product of the ideal cycle time times the total count of product divided by total availability

Performance is a measure of how long it takes to complete a process, such as producing a single unit of a product, compared to the ideal time. To calculate performance, multiply the ideal cycle time by the total count of product, then divide by the runtime. The ideal cycle time is the theoretical maximum speed at which a single unit can be produced.

The performance metric takes into consideration anything that causes production to run at less than maximum speed, such as small stops and reduced operating speed. Small stops are caused by events such as misfeeds, jams, or misaligned sensors, and typically do not require maintenance to intervene. Organizations that employ autonomous maintenance as part of a total productive maintenance (TPM) program are able to greatly reduce small stops. Slow cycles are caused by normal wear and tear, poor lubrication, dirt and debris, and other factors that account for a less-than-ideal cycle time.

Quick Reference: Data Required to Calculate Performance

  • Ideal Cycle Time: The theoretical fastest time in which a single unit can be produced.
  • Total Count: The total number of units produced, including scrap and defects.
  • Runtime: The amount of time the asset was running during planned production time (derived from Availability)

Quality

Quality formula for oee calculation – divide the number of good units produced by the number of total units produced.

Quality is a measure of how many good units are produced compared to the total number of units produced. “Good” units are considered those that meet quality standards. It excludes scrap, defects, and units that require rework. Total count includes all units produced, regardless of quality.

Poor quality occurs when imperfect units are produced during startup or stable production. During startup, equipment may run through a warm-up cycle where non-usable units are produced. Additionally, human error can lead to incorrect equipment settings or problems during a changeover, which also affect quality. During stable production, incorrect settings and operator error can be responsible for scrap or rework.

Quick Reference: Data Required to Calculate Quality

  • Good Count: The total number of good units (i.e., units that meet quality standards) produced.
  • Total Count: The total number of units produced.

Putting It All Together: Calculating OEE

Let’s calculate OEE for a fictional production asset using the following information:

  • Planned production time was an 8 hour shift (28,800 seconds).
  • An asset experienced 1 hour (3,600 seconds) of downtime.
  • The fastest a good unit can be produced is 3 seconds.
  • Out of 7,000 units produced, only 6,500 met quality standards.

Availability

To find the runtime, subtract the downtime from the planned production time. In 8 hours of planned production time (28,800 seconds), there was one hour (3,600 seconds) of downtime. Therefore, there were 7 hours (25,200 seconds) of runtime.

Availability = 25,200 seconds / (25,200 seconds + 3,600 seconds) = 0.875

Performance

Under ideal conditions, it takes 3 seconds to produce a single unit. 7,000 units are required. As established in the availability calculation, runtime is 7 hours (25,200 seconds).

Performance = (3 seconds/unit * 7,000 units) / 25,200 seconds = 0.833

Quality

Of the 7,000 units produced, 500 were considered defective.

Quality = 6,500 units / 7,000 units = 0.928

Overall Equipment Effectiveness

With values for availability, performance, and quality, you can now calculate OEE by multiplying the values together.

OEE = 0.875 * 0.833 * 0.928 = 0.676

Multiply the result by 100 to express OEE as a percentage. In this example, the OEE rating is 67.6%

How to Interpret OEE Rating

Your first OEE calculation provides a benchmark against which to compare future OEE ratings. Since the rating is broken down into three parts (i.e., availability, performance, and quality) you can focus on factors that are lagging. After changes have been in place for some time, calculate OEE again and compare the results. Try not to get too hung up on the number itself – what’s important is that the number improves over time.

World-Class OEE

When reading about overall equipment effectiveness, you will often see a cited world-class OEE rating of 85%. While it is tempting to compare your OEE to this number, keep a few things in mind.

First, it is very challenging to achieve a high OEE rating. Consider a production line whose availability, performance, and quality are all 90%. Sounds pretty good, right?  Based on the formula used earlier, the OEE rating for this production line is 72.9% – well below the 85% world-class rating.

Second, the development of world-class OEE was based on experience working in plants that had successfully implemented total productive maintenance (TPM). Organizations that have not done so are unlikely to come close to 85% OEE. In reality, the OEE in most organizations is closer to the 45% – 60% range.

Last, OEE ratings are only true for the exact assets or production processes being measured. OEE ratings should not be compared asset-to-asset or process-to-process unless they are identical. You should not compare OEE between dissimilar assets, processes, organizations, or industries given their numerous differences.

How Maintenance Can Improve Overall Equipment Effectiveness

One of the most important ways the maintenance team can improve OEE is to use a computerized maintenance management system (CMMS). CMMS software tracks critical data about your assets and maintenance process, helping you better manage, organize, and document maintenance activities. Leveraging a CMMS enables you to easily make changes to maintenance operations that contribute to OEE improvements.

A CMMS can be used to collect data about asset failures, maintenance history, and unplanned downtime, useful for improving availability and performance. In terms of performance, organizations can use CMMS software to optimize preventive maintenance schedules, provide technicians with checklists for completing maintenance tasks, and track failure trends.

Proactive maintenance activities planned and managed through a CMMS keeps equipment in optimal condition, thereby impacting quality. In addition, CMMS software functions as a maintenance request system that allows machine operators or others to submit service requests directly to the maintenance department, increasing the awareness of maintenance needs.

Improve Equipment Maintenance with FTMaintenance Select

Though effectively utilizing overall equipment effectiveness is a company-wide effort, the maintenance team has a big role to play in improving asset availability and performance. FTMaintenance Select computerized maintenance management system (CMMS) software provides a single platform for documenting, managing, and tracking maintenance activities, and can be useful tool for OEE calculations. Schedule a demo today to learn more about FTMaintenance Select.

COVID-19’s Impact on Manufacturing

Posted: 5/7/2020

gears-metal-tools-machinery-manufacturing-covid-19 impact

Manufacturing makes up 16% of the global economy. The COVID-19 pandemic has rapidly and increasingly impacted manufacturers in many countries. Some of these impacts will be temporary and some permanent.

Ties to China Causing Delays

As you probably know, the first outbreak of COVID-19 occurred in China. Even though they are closer than other countries to returning to normal, many supply chains are still shut down, causing disruptions for those receiving the supplies. Many manufacturers in other countries depend on China for raw materials, plastics, textiles, and electronics. Although suppliers in China are beginning to lift restrictions, there is no telling when they will be able to resume full production capacity.

Steep Decrease in Demand

There is a steep decrease in product demand throughout many industries as people are staying home, stores are closed, and restaurants move to take-out and delivery only.

  • Some organizations have been forced to shut down or have shifted a portion of their production to personal protective equipment (PPE).
  • The demand for consumer goods has declined, so these manufacturers will suffer.
  • Smartphone, television, and vehicle production, for instance, have been greatly affected.

Food manufacturers face unique challenges.

  • They still produce items for restaurants that will be used in to-go orders, but it is nowhere near the same quantity as when they supply restaurants for sit-down dining.
  • On the other hand, demand for groceries has increased by 25%.

Other industrial decreased demand issues:

  • The demand for fuel has gone down significantly, making gas prices extremely low—great for consumers, not so great for the oil industry.
  • Because all manufacturers use vehicles and machinery that require fuel, what’s going on in the oil industry affects everyone.
  • Slowed economic activity reduces demand for industrial products.
  • As the crisis goes on, there will be continued weakening of links in the supply chain because suppliers and vendors might face operational and financial struggles.
  • Manufacturers should prepare for supply chain bottlenecks.

Other Industries Affected Overall

The automotive industry is one of the largest contributors to ventilator and PPE production because they have the materials to do so. Other industries greatly impacted (more so than others) by the pandemic include chemical, machinery, electrical, electronics, metal, pharmaceutical, and medical equipment.

Legal and Productivity Challenges

Some businesses are dealing with legal and productivity challenges.

  • Even though so many businesses are sacrificing some of their production levels to produce PPE, hand sanitizer, and ventilators, they may face patent infringement lawsuits when the pandemic is over.
  • Some organizations are forced to focus on essential business needs and processes, so they don’t have the resources to do any other projects such as remodeling or training, leading to possible code violations and less knowledge among newer employees.
  • There will be significant decreases in productivity if numerous employees get sick.
  • What’s more, if organizations are following all of the sanitation and social distancing measures and an outbreak still occurs, the company may receive criticism or even be subject to legal action for not doing enough to protect their workers.

Read more: Shifts in Manufacturing Product Production to Combat COVID-19

Most manufacturers often run lean (especially in times of crisis) and have limited backup inventory, which makes this time period even more difficult. The value of investments is shrinking and globally, investments in the manufacturing sector could shrink by up to 15% by the time normal operations can resume. While recovery from this recession may be faster than the recession of 2008, the short term impact is worse. Recovery will take some time.

Truckers Face Unique Challenges

While manufacturers and employees in many industries are facing decreased product demands, delays, and layoffs, trucking companies are facing unique challenges.

  • They are experiencing high demand and a shortage of drivers.
  • There has been a 22% increase in demand for essential goods, and grocery stores have greatly increased their orders for food.
  • There have been longer load and unload times at distribution centers. The shift towards more online shopping and the increased the need for home delivery has also increased the volume of transported goods from suppliers to distribution centers.

Another unforeseen effect on trucking companies is a consequence of people hoarding goods such as water and toilet paper. When consumers realized they would still be able to shop on a regular basis, they continued to buy more at regular amounts (due to stores limiting quantities on certain items). This means those consumers will have a surplus of goods once the pandemic is over and won’t need to buy these items for a while, hurting the revenue of trucking companies and other manufacturers. Trucking companies were already short on drivers before COVID-19, but now the increased demand has put even more strain on this industry.

FasTrak SoftWorks, Inc. is Open for Business

Though the current crisis has presented many challenges, manufacturers have adapted to continue serving the global communities. With more focus placed on providing essential products and services, the need for proper maintenance management has also been heightened. FasTrak SoftWorks, Inc., provider of FTMaintenance, continues to support customers in essential industries like manufacturing.

As a supplier of computerized maintenance management system (CMMS) software to essential businesses, we are taking all possible actions to remain 100% open during the COVID-19 crisis to ensure that we will be able to maintain our operations and service to our customers. We are in this together, and we will get through this, together.

Shifts in Manufacturing Product Production to Combat COVID-19

Posted: 5/7/2020

clean-linens-shelves-scrubs-ppe

Companies Producing Medical Supplies

When supplies need to be made quickly during a shortage, activities that normally take months must be completed in weeks or even days. The only way to do this is to sacrifice efficiency for effectiveness, meaning companies need to step back and evaluate each step of their process, from reviewing existing solutions to defining requirements, designing product and supply chains, developing the product, and figuring out how to ramp up production before proceeding.

Many companies in the beauty industry have stepped up and decided to focus their production on medical supplies. LVMH and L’Oreal have switched from making perfume and hair products to producing hand sanitizer. Estee Lauder is making less perfume to accommodate production of hand sanitizer as well. Garnier is also producing other sanitation products for food distribution companies.

In the food and beverage industry, Bacardi is redistributing some raw alcohol materials from their normal spirits production to aid in making hand sanitizer. They have partnered with Olein Refinery to provide the raw materials needed for Olein Refinery to produce over 1.7 million units of sanitizer in their facility. Half a million units will be donated to communities in Puerto Rico.

Olein began this shift in production on March 17th and will continue it as long as there is a need. It will not disrupt the production of Bacardi’s rum products. The rum manufacturer is used to stepping up in times of crisis—they have donated money during Hurricane Maria and Irma, and have donated to disaster relief organizations around the world as well.

Jose Class, VP of Supply Chain and Manufacturing, said in a press release,

“In the 158 years of Bacardi, we’ve endured our share of challenging times and have learned that resilience, optimism and community are what will help us come out stronger.”

Jose Gonzalez, President of Olein Refinery also discussed his thoughts in the same press release: “We are extremely grateful to Bacardi for adjusting its production to provide us with raw material so that we may ramp up production of the disinfectants we need to help keep the people of Puerto Rico safe.”

Companies Producing Medical Devices

In general, there are few things to keep in mind when organizations shift their production to creating medical products, including lifesaving devices. Repurposing manufacturing lines to produce medical devices takes time and is a complex process. Meeting new production standards and receiving regulatory approval are challenges faced by these companies. Without this, organizations could face lawsuits when the pandemic is over. Despite these challenges, organizations have not hesitated to move forward.

The automotive industry has some of the best machinery and raw materials to be able to manufacture ventilators and many automotive brands have done just that since the COVID-19 crisis began. Ford and GM have been producing ventilators and ensuring they are shipped to hospitals quickly and affordably.

Though Nike is not an automotive company, they are also making ventilators, in this case, with air purifiers in them.

Another company that has switched their production to ventilators is the popular vacuum brand Dyson. CEO James Dyson designed a ventilator in 10 days and is now working towards the goal of producing 15,000 of them. They will be distributed in the UK first, and more will possibly be distributed to other countries as they are able to produce them.

James Dyson told CNN Business, “The new device can be produced quickly, efficiently, and at volume.” It has been “designed to address the specific needs of coronavirus patients.” They started production in mid-March and the ventilators went on the market in early April.

James also said in the CNN article, “The core challenge was how to design and deliver a new, sophisticated medical product in volume and in an extremely short space of time.” So while they are in a time crunch and also need to make sure the product meets safety requirements, the company is working hard to get as many units out as quickly as possible.

Companies Producing Personal Protective Equipment

Assistance during this crisis is coming from organizations in all industries. Baur, a hockey equipment manufacturer, switched from creating hockey masks to making medical shields. When hockey games came to a halt, Baur faced the possibility of closing. To save their business and help out the community, they came up with a prototype for the medical shield within two weeks. Starting in early April, they were able to make 2,000 shields a day, then 3,000, and have perfected the process enough to make up to 4,000 shields per day as of now.

Mary-Kay Messier, VP of Global Marketing, told Associated Press, “There’s a real shortage, a dire shortage of medical devices and gear that’s needed to keep people on the front lines safe. We all want to figure out how we can make a difference.” Though it was challenging to put aside their need to compete with other similar manufacturers, they did so to come together and offer an example for other organizations to follow, putting helping medical professionals before their typical marketing efforts.

Carhartt is making gowns and masks. On their website the company states their reasoning and passion behind this shift in production to help everyone they can in this crisis. “Our factories in Kentucky and Tennessee have successfully completed the first of 50,000 gowns! These gowns will be delivered to all of those who continue to fight on the frontline. We are so honored to help and will continue to do everything we can to contribute. This kind of fight is in our heritage, having produced for the frontline during two World Wars.” It did not take long to adjust their production process since they had the materials already—they just needed to be sown in a new way.

The challenge for Carhartt was to bring in enough employees from their closed retail stores to both give them a job during this time and produce enough PPE while maintaining safe social distancing. They overcame this challenge by creating a rotating weekly schedule and modifying production line components to keep workers six feet apart. After a few weeks of adjusting starting on April 6th, they perfected the process by April 20th and will continue to produce PPE as long as the need exists.

American Apparel, Zara, Prada, and Eddie Bauer are all making masks to protect medical professionals and the public. Zara is also making medical gowns for professionals and patients, while Prada is producing medical overalls in addition to masks. Gap, Inc. and Brooks Brothers are making gowns, masks, and scrubs. Under Armour is busy making masks as well as fanny packs filled with hygiene and other care package supplies for doctors and nurses. Vera Bradley is making masks and scrubs while KEEN is making shoes for medical professionals.

Not only is Ralph Lauren making isolation gowns, they have also donated a total of $10 million to people affected by the pandemic. Nike is also making masks. My Pillow is making masks along with mattress manufacturer Eclipse International. Protolabs, Inc. of Minnesota, 3M and Apple are also producing masks. Johnson & Johnson is busy making goggles. General Motors of Shanghai has been making masks from material previously used in car interiors since the pandemic started.

Doing our Part

As a provider of industrial software to essential businesses, FasTrak SoftWorks is here to support manufacturers as they face the challenges of shifted production.