Efficient Plant March 2018 - 8

column | implementations

OEE
Provides
ROI to
Management
Dr. Klaus M. Blache
Univ. of Tennessee Reliability
& Maintainability Center
(RMC)

Address OEE's Big Losses

W

HEN YOU TRY to
justify any reliability/
maintainability implementation, your management is always
going to ask for some kind of return on
investment (ROI). If you know what
1% of OEE (Overall Equipment Effectiveness) or TEEP (Total Equipment
Effective Performance) is worth and
can explain how you plan to attain it,
then you have a much better chance of
receiving project approval.
What is it that you most need to accomplish? Is it implementing predictive
maintenance, raising machine reliability,
getting more operator involvement,
eliminating downtime, increasing machine performance (to enable production
at or near design capacity), improving
bottleneck operations to increase overall
production line throughput? Improving
OEE can help you achieve all of those
goals because it is designed to improve

Metric

Loss
Category

Six Big Losses

Examples

Availability

Downtime

Setup and
Adjustment

Material shortage, machine
changeover, process warm-up
after shutdown

Downtime Breakdowns

Equipment failure, unplanned
maintenance, damaged tooling

Defects

Startup
Rejects

Setup issues, product rejects,
improper assembly

Defects

Production
Defects

Product damage/scrap from
improper assembly

Performance Speed

Small Stops
and Idling

Misfeeds, cleaning, material
jams, checks, tolerance fixes

Speed

Process
Defects and
Rework

Operator efficiency, machine
wearing down or running slower
than capacity, age of equipment

Quality

This table defines the losses that apply to the three factors used to determine OEE. Understanding and
addressing these losses can play a major role in improving OEE and, ultimately, TEEP.

8

| EFFICIENTPLANTMAG.COM

operation efficiency and effectiveness.
This is accomplished by addressing the
Six Big Losses in an ongoing quest to
eliminate waste.
To calculate OEE, multiply availability x quality x performance. These three
categories account for downtime losses
(availability), defect losses (quality) and
speed losses (performance). If you have
no losses of any kind , then your OEE is
100%. Multiply OEE by utilization and
the result is TEEP, which is simply the
ratio of fully productive time to total
time. If your OEE is 100% and utilization
is 71.4% (running 5 of 7 days each week),
your TEEP is 71.4%.
Let's assume that you did this calculation and your actual TEEP is 50%.
If your plant produces $20 million of
product revenue each week (in 40 hr.),
then each percentage of TEEP is worth
$400,000. Similarly, each hour of uptime
is worth $500,000, assuming there is
product demand.
Establish an OEE baseline, if you've
not done so already, then calculate your
TEEP. Once you know where you stand,
work on the Six Big Losses because
they'll put money on your company's
bottom line and give you concrete
numbers to justify additional reliability
improvements.
The nuts and bolts of OEE are discussed in the "On the Floor" article on
p. 38 in this issue. EP

Based in Knoxville, Klaus M. Blache
is director of the Reliability &
Maintainability Center at the Univ. of
Tennessee, and a research professor
in the College of Engineering.
Contact him at kblache@utk.edu.

MARCH 2018


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