2.6 Reconciliation and Loss Analysis

Once OEE is calculated, the various losses are computed from the summary sheet information. Analyzing these losses will help you identify areas that have major opportunity for improving OEE. Obviously, improvement in any area will help OEE. However, the greatest opportunities for OEE improvement are those areas with large losses.

OEE is not the only factor behind company productivity. Therefore, the different potential programs must be ranked for their overall benefit. For example, some industries may have specific quality or financial considerations that must be incorporated into their lists of priorities. All programs should not only be evaluated for their anticipated benefits, but also be congruent with the goals of the company. When completed, they should be measured for evidence of their success. Evaluating the trends of most key parameters will usually identify the impact of a program before and after its completion. Chapter 5 discusses a value fulcrum, a concept that can help rank nearly equal projects on a reactive to proactive scale.

When setting goals, you should link throughput improvement with desired progress of other parameters. Take this step when you initially assess the current baselines of all parameters. It often takes creativity to define the relationship between parameters. However, by clearly communicating the desired outcomes, the priorities are understood and supported by the entire community. I recommend that you focus on no more than three key projects at a time and complete them as quickly as possible. Do not let your resources be diffused on a multitude of jobs. Good progress will occur if you select and eliminate the right limiters.

In general, the loss analysis step is a point where synergy between OEE and other key parameters occurs. During this step, the detailed equipment performance records will help identify significant root cause limiters. Cross-functional teams properly trained in objective problem solving and focused on the areas of large losses often make breakthrough gains in OEE improvement. Detailed observations that are provided by an effective equipment performance system database will be of assistance. Once the key root cause limiters are identified and eliminated, significant improvement in performance will occur.

Section 2.1 identified several types of loss that together equal total loss. These are waste loss, speed loss, ST (stop time) operational loss, ST induced loss, and DT (downtime) loss. Examine the example that has been used throughout this section. Note that 4680 units were produced and 4362 units were good units. The difference in these numbers (318 units) is the quality loss and the theoretical factory time to produce these units is the lost time due to quality. Also, 340 minutes were used in operating at 1/2 rate (2 units/min) which results in1/2 of this time (170 minutes) as 100 percent speed loss. Therefore the losses are as follows:

Recall from the previous section that OEE = 59.6 percent.

Therefore,

The reconciliation is complete.

This reconciliation step should be completed on a routine basis. If the OEE values do not correlate with factory output, then the lowest value should be assumed until the discrepancy is resolved. It takes discipline to correctly collect data and to confirm that the database is correct. But this discipline is necessary to be sure everyone is working with good information.

A sample report follows (see figure 2-5). The values are filled in for the results of the practice example. This type of form is useful when you are looking at similar process systems and developing areas for best practices. It is also useful for demonstrating improvement over time for the same equipment system.

The report displays various losses and OEE, showing that they can be reconciled to 100 percent. Also, the input for simple computation of OEE is available and can be used to confirm that true OEE is provided. If this format is used for monthly reports, the various OEE values can then be properly weighted relative to Scheduled Time to determine OEE for the quarter or year. You may also want to incorporate the number of frequencies of each category into the report. This information is necessary and valuable in computing reliability parameters.

Reference:

1. Nakajima, Seiichi. Introduction to TPM: Total Productive Maintenance. Cambridge, Massachusetts: Productivity Press, 1988.

Copyright 2004, Industrial Press, Inc., New York, NY