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TPM Chapter 5 - How To Use OEE As KPI

In my previous blog, I talked about the definition of OEE, the losses associated with it and the calculation of OEE. In this blog I’ll be talking about how to effectively use it to create an action plan for your plant. I’ll explain the calculation of OEE with the help of some dummy data of my plant so that everyone has a better understanding about it.
Let’s say we have the following data for a particular day of a month.
Loading Time
Down Time
Operating Time
Total produced bale weight/day
Std. Cycle Time
Defective quality bale weight
Good Quality Bale weight/day
Time is in minutes, Weight is in Kg
Let’s look at each of the above column and how it is determined.
1.      Loading Time:
Loading Time = Available Time – Planned Downtime
Now, if we consider one day then Available time = 24 * 60 = 1440 minutes 
Let’s say our Daily Preventive Maintenance is 2 hours i.e 120 minutes for my line which                     would be my Planned downtime. This figure varies from equipment to equipment and                         industry to industry.
Planned Downtime includes following:
·         Daily/Weekly/Monthly/Yearly PM
·         Any other major work that you are planning to do in your equipment, line or plant for which your plant needs to be shutdown
So my Loading Time = 1440 – 120 = 1320 minutes
            2.       Down Time:
As mentioned in my previous blog, 4 types of losses fall under downtime which are as follows:
Breakdown Loss: All kinds of stoppages whose duration is more than 5 minutes are part of Breakdown loss. Breakdown loss can be further bifurcated into following (The bifurcation shown here is applicable to our industry but it is more or less the same everywhere):
Mechanical Faults
Electrical Faults
Process related faults
Utility related faults
Human Error

Setup & Adjustment Loss: Changeover loss is taken over here. Starting from the end of the previous product to the start of the next good product. Since I’m calculating for a day, I’ve assumed that no changeover took place and hence this loss is taken as zero.
Startup Loss: Normally when you start your line or machine, it takes some time to reach steady conditions, hence this loss is called startup loss. It may not be applicable in all industries like in our case it is negligible and hence it is taken as 0.
Cutting-tool replacement Loss: The loss incurred when you stop the machine in order to change die, cutter etc. is called cutting-tool replacement loss. For this example it is considered to be zero. However, in many plant this activity is normally done whenever there is product changeover or in the PM activity. In such case it needs to be separately shown so as to have an idea about the time taken in performing this activity.
Thus the downtime in this case will be 200 minutes as explained above.
          3.       Operating Time: Operating time is nothing but the machine run time.
Operating Time = Loading Time – Downtime
i.e  1320 – 200 = 1120 minutes
Based on the above data, we can calculate the availability.
Availability = Operating Time/Loading Time = 84.85%

           4.       Total produced bale weight (in Kg)/Day:
Here I have shown that 48000 kg was produced on a particular day.

     5.    Standard Cycle Time:
            Let’s assume that the designed capacity of the equipment shown here is to produce 65000                kg per day.
            This means 65000 kg in 24 hours i.e. 24 x 60 = 1440 minutes
Hence Std. Cycle Time = 1440/65000 = 0.022 minutes/Kg
This shows it takes 0.022 minutes to produce 1 Kg of the product.
Performance= (Actual Output x Standard Cycle Time)/Operating Time = 94.28%

           6.      Defective products:
            The defective product assumed here is 1000 Kg.

                 7.      Good quality products:
                 The good quality products is 48000 – 1000 = 47000 Kg.
Quality = 47000/48000 =97.91%

So now we have calculated all the three parameters which are needed to calculate OEE: Availability, Performance and Quality.
OEE = Availability*Perfromance*Quality
        = 84.85% * 94.28% * 97.91%
        = 78.32%

As mentioned in my previous blog, merely calculating OEE is of no use to us. We need to further analyze this OEE data and take actions based on it. Here we have obtained the OEE as 78.32% which means that we are having 21.68% losses in our equipment/line.

Now, let’s look at the following chart:

So from this data we come to know that our major losses are our Availability losses then performance losses and then quality losses.
If we further breakdown availability losses, we come to know that mechanical faults have the maximum share followed by process related faults and electrical faults. One needs to go into detail of each of these faults, find out the reason behind the same and then take action so as to ensure that the same fault is not repeated again.
So based on this data you can create your action plan. You know that your OEE should be 85%, so you can set individual targets for each of the availability losses. E.g Bring down your Mechanical faults from 100 to 50, Process related faults from 70 to 50 and electrical faults from 30 to 20.
Similarly you can set targets for performance losses and quality losses as well once the reasons for the losses have been known.
Thus, OEE gives you an idea about the losses in your equipment and where you need to focus to bring your OEE up and hence it is the most important indicator of TPM.
In my next blog, I’ll be talking about Autonomous Maintenance Pillar of TPM.

TPM & Business Development Manager
SKAPS Industries


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