OEE 101 - Tracking Performance
Why track performance?
If you’re reading this, there’s a good chance you already recognize the need to track performance and are looking for some further insight.
We will explore some of the starting steps on the hows, whys, and next steps to get your operations to the next level.
Without performance tracking, there is no way to improve your operations, or for that matter, know if you’re doing well.
Having a target and tracking to it is a good start, but are you tracking the right things?
Is tracking output enough? How and why are you setting targets?
Let’s start by taking a look at what performance means in terms of Overall Equipment Effectiveness (OEE).
In the context of OEE, Performance is the ratio of units produced to the units a machine/process is capable of producing.
Essentially this is a measurement of output/total possible output or:
A process in an 8-hour shift, 480 minutes, with staggered breaks (all time is operational) has a 1 part per minute cycle time.
The process produces 460 parts.
Performance in this scenario would be:
If the same scenario with a 2 parts/minute cycle time, you'd have:
This highlights the importance of calculating performance correctly is setting the right target.
So, how to set your targets. Do you use your historical best? Contracted output? So many manufacturers set these too low, too high or never adjust. But how to choose?
For machinery or equipment with no manual operations, setting the target is a little easier. The manufacturer provides the cycle time information or it is part of your upfront specifications at purchase. You may choose to set a lower takt due to demand, cycle times in other parts of the operation, etc., but this is straight forward.
Operator dependent cycle times or completely manual processes get trickier. Most companies take an average or a best historical output and target to that, or to what’s needed to meet demand.
But what’s most needed is a true understanding and evaluation of the time it takes to perform a process.
Start with a detailed process map, broken down into minute detail.
Understand all the steps in the process and that these processes are actually followed. It’s common when doing process and cycle time analysis to discover unfollowed processes or unnecessary steps. Perform time studies of the perfectly performed process. You can also go further using method time measurement methodologies.
If you can’t do this internally, companies like Seraph can support these activities at the required level of detail. Regardless of your method, understanding the true time needed to perform a process is critical to setting the right targets.
Notice I mentioned the perfectly performed process, does this mean you should set unachievable targets? No, but you should know what is realistically possible. Unachievable targets hurt morale and lead to “red” statuses that become the norm to which no one reacts. Numerous time studies should be conducted over various shifts and conditions to set a realistic target. These should be performed periodically as processes can change or drift over time.
Reviewing and updating targets, creating a review of the process must be a part of the standard process. Targets that are always achieved should be re-evaluated to ensure they aren’t too low. It’s possible to perform at a high level and hit targets, but it should be a moving target.
Your competition is always improving. Are you?
Why use OEE and not output or performance alone?
The answer is simple, without the details behind what’s causing low output it will be incredibly difficult, if not impossible, to improve.
OEE takes into account your performance, quality and availability.
Looking at the first example, a performance of 95% seems good, right? Maybe. Maybe it’s representative of your overall operations. But it could mean that you are hitting your target and in doing so are sacrificing cost through poor quality, excessive downtime or a host of other issues.
OEE measures the effectiveness (as indicated by the name) of your operations and the degree to which you are successful. You may also be tracking quality and downtime separately, but without looking at all 3 variables as a whole you will miss the impact that “OK” processes are having.
OK quality, OK availability and OK performance = poor effectiveness.
The necessity is clear, so let’s briefly review the other components of OEE.
Availability is the percentage of time a piece of equipment or process is "available" or running during the planned runtime. When measuring availability for OEE, you would use the following:
A planned 8-hour shift (480 min) with two - 10-minute breaks, a 30-minute lunch and 30-minutes of downtime yield the following:
For many operations, any downtime, including a planned break, is considered downtime, in this case changing the availability to 83%. Calculating in this way would be something to consider if capacity or overtime is an issue.
Quality in terms of OEE is:
A process that produces 80 good parts out of 100 total parts produced has a quality score of 80%. This is typically referring to first-pass quality and would include defective parts that can be reworked.
Why companies are turning to tracking tools
Manual collection methods can be a good way to keep operators in touch with how they are performing in the process. But collecting (and losing) manually recorded data can provide gaps in your performance tracking. Often, manually recorded pass down reports pile up on a desk to be recorded too late to react or not at all.
Once data is entered it has to be converted into a universally understood format. By the time reports are published, if they are consistently published, root causes may be lost in the normal hustle and bustle of a busy operation.
Most operations want real-time data and real-time notification. There is nothing worse than a phone call from a customer due to a production issue you weren’t aware of and can’t explain.
The Seraph team developed a tool, ProductionNet that provides real-time visibility to all three components of OEE, providing users with an overall ranking (OEE) of their process. ProductionNet allows users to access their data and reports remotely on any device. Detailed reporting can be viewed by shift, by work center, or by part.
OEE is the key to effective operations
Find out more at ProductionNet
ProductionNet was created by our team of senior operations experts who needed something better, faster, and more relevant than what was commercially available.
The tool has been used in everything from general operational improvement work to high-stakes crisis management situations across numerous industries, including automotive, medical device, and general manufacturing. We are U.S. based, but our software is deployed worldwide. We have offices in Michigan, California, and Ireland. Our goal is to help you save time by providing the cleanest, best operational tracking software available.
It has become a standard tool of choice for our customers, and we would be happy to meet with you and demo the product.