OEE - One Metric to Rule them All

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OEE - One metric to rule them all.

The impact of Reliability on OEE.

Nelson RiveraReliability Director - CMRPMcNeil - a Johnson & Johnson Company

Abstract

• Reliability is a popular topic these days and is widely used on Manufacturing and Utilities Equipment. This presentation will focus on how equipment Reliability impacts OEE (Overall Equipment Effectiveness) a Productivity metric.

A Maintenance and Reliability improvement effort in 1 manufacturing area eliminated the monthly downtime loss of 3% OEE a $1MM Monthly Sales loss. Since then, Nofailures have occurred for the last 8 Yrs.

$96 MM Real Profit No Estimates!!!

Topics

• Maintenance Costs• Reliability• OEE• Highlights and Summary

Maintenance Costs

Maintenance is the foundation of equipment lifecycle and asset longevity

A sound maintenance program uses a variety of techniques (PM’s, PdM’s, CM’s and EM’s) to maximize equipment performance and lifespan while keeping costs to a minimum.

Maintenance Costs

• There’s more competition every day…– There is a need to produce

more with less.– How will you be more

competitive.– How will you stand out.

Maintenance Costs

• “Mainstream” Goal:– Reduce Costs– Increase Profits.

…99% of Management groups typically cut Maintenance budgets by 10% to improve the P&L.

What's the impact?…in the short term

Maintenance Costs Example: 10% Budget Cost reduction

• If your Budget is $20MM/Yr…– Fixed Costs $12MM– Variable Costs $8MM

Fixed Costs60%

Variable40%

A 10% Budget Cost reduction impacts a 25% reduction in the Variable spend.

Maintenance Costs Example: 10% Budget Cost reduction

• You’re accelerating the Asset End of Life

A 10% Budget Cost reduction impacts a 25% reduction in the Variable spend.

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Maintenance Costs

• “Mainstream” Goal:– Reduce Costs– Increase Profits.

– …99% of the time an uninformed decision will drive:

Maintenance Costs

• A Real Goal is:– Reduce failures (EM) and in

turn reduce downtimes.– Increase Available equipment

production time.– Reduce operating Costs.

Increase Long term Profit!!

…But How?

• How much do you spend on your cars Maintenance/day or Yr.?

• Why do you need a Car Available?– Get/Maintain Your Job, Better Salary – Emergencies, Necessity

• Rent a Car 10-50x & spend on high Maintenance Costs

Maintenance Costs

Per Day

Increase profits!! By optimizing your Maintenance

• Production Maintenance Labor Costs = $45/hr.• Emergency Event, EM spend = Labor + (Emergency) Parts.

• What’s 1 hour of Production downtime worth to Management?

• Production losses in a Consumer Environment need to include production times and shipments.

$200 DT/Mach./Hr.>$2000 DT/Mach./Hr.(if Back Ordered product or loss of sales).

Maintenance Costs

Increase profits!! By optimizing your Maintenance!!

Total Loss = EM spend($45) + Production Loss = $245/hr. or greater5X Real Loss vs what management previously believed!

• Every year in an effort to save costs… Equipment Owners face:

( - ) Budget reductions( - ) Aging equipment( - ) Higher productivity requirements( - ) Less time for maintenance( - ) Shutdown eliminations( - ) Production trumping maintenance

= Increased equipment failures and downtimes… …Hence long term increase in manufacturing costs!

Risk introduced by Management

Maintenance Costs

Increase profits!! By optimizing your Maintenance

A 10% cut in a maintenance program will increase production costs by at least 10x in the long run.

• Definition: have the confidence that your equipment is

ready to perform well and Available when needed,

Reliability

• Probability of Failure– Increases as factors increase

• Runtime• Run Speeds• Reduced maintenance• Age• Technical knowledge

Reliability

• Measurements:– Of Failure MTBF-Mean Time between Failures

• Direct cause of events (Not Times)

– Of Downtime MTTR-Mean Time To Repair • Downtimes occur as a consequence of failures.

Reliability

Time Between FailuresTBF TBFTBF TTRTTR

A Increased spending of 10% on Maintenance Best practices will reduce events and decrease costs by at least 10%.

Reliability

PM’s and PdM’s such as Predictive Wear indicators reduce events and costs.

Reduced Maintenance will Increase Failures, downtimes and costs.

Reliability

• By performing in a Reliability mindset:

– A criticality Assessment per equipment.

– Performing RCM, FMEA ‘s and other processes on CM’s, EM’s and Failures then developing PM’s, PdM’s, RTF, DOM’s, etc…

– Constant monitoring of MTBF and MTTR.

Equipment Asset # Year Installed Expected Life (yrs)

Estimated Remaining Life

(yrs)

Business Criticality

A=No. of major failures/

upgrades (Mech/Elec) to

date

Obsolecency Internal condition

External condition

% manhours spent on

breakdown work orders

B=Equipment Utilization

Maintenance cost index

D=Safety & Environmental

C=Product Quality – Events &

Deviations

TotaL PRIORITY SCORE =

Sum(G:O)*E*F

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LINE 31 10009131 A B C D E F G H I J K L M N 31 10009042 11/10/2008 25 1 3 1 1 1 1 1 4 1 1 1 36 4 5 2 1 10 40 2 1 80FILLER FOR PACKAGING LINE 31 10009044 11/10/2008 25 1 3 1 1 1 1 1 4 1 1 1 36 4 5 2 1 10 40 2 1 80CAPPER FOR PACKAGING LINE 31 10009045 11/10/2008 25 1 3 1 1 1 1 1 4 1 1 1 36 4 5 2 1 10 40 2 1 80NECKBANDER FOR PACKAGING LINE 31 10009047 11/10/2008 25 1 3 1 3 1 1 1 4 1 1 1 42 4 5 2 1 10 40 2 1 80LABELER FOR PACKAGING LINE 31 10009048 11/10/2008 25 1 3 1 1 1 1 1 4 1 1 1 36 4 5 2 1 10 40 2 1 80CARTONER FOR PACKAGING LINE 31 10009050 11/10/2008 25 1 3 1 1 1 1 1 2 1 1 1 30 2 5 2 1 10 20 2 1 40BUNDLER FOR PACKAGING LINE 31 10009051 11/10/2008 25 1 3 1 1 1 1 1 3 1 1 1 33 3 5 2 1 10 30 2 1 60 31 10009052 11/10/2008 25 1 3 1 1 1 1 1 4 1 1 1 36 4 5 2 1 10 40 2 1 80PALLETIZER FOR PACKAGING LINE 31 10009075 11/10/2008 25 1 3 1 1 1 1 1 4 1 1 1 36 4 5 2 1 10 40 2 1 80

Equipment Asset # Year Installed Expected Life (yrs)

Estimated Remaining Life

(yrs)

Business Criticality

A=No. of major failures/

upgrades (Mech/Elec) to

date

Obsolecency Internal condition

External condition

% manhours spent on

breakdown work orders

B=Equipment Utilization

Maintenance cost index

D=Safety & Environmental

C=Product Quality – Events &

Deviations

TotaL PRIORITY SCORE =

Sum(G:O)*E*F#VALUE!

5 2 1

10 ##### 0 0 #VALUE!LINE 2 10004826 A B C D E F G H I J K L M N #VALUE! 5 2 1 10 ##### 0 0 #VALUE!UNSCRAMBLER FOR LINE 2 7496 1/1/1995 25 3 3 2 2 3 1 1 4 1 1 1 144 8 5 2 1 10 80 4 4 1280BOTTLE CLEANER FOR LINE 2 7499 1/1/1995 25 3 3 2 4 3 3 1 4 1 1 1 180 8 5 2 1 10 80 4 4 1280FILLER FOR LINE 2 7505 1/1/1995 25 3 3 2 2 3 1 1 4 1 1 1 144 8 5 2 1 10 80 4 4 1280COTTONER LINE 2 12483 1/1/1995 25 3 3 2 3 3 3 1 4 1 1 1 171 8 5 2 1 10 80 4 4 1280CAPPER FOR LINE 2 7508 1/1/1995 25 3 3 2 2 3 3 1 4 1 1 1 162 8 5 2 1 10 80 4 4 1280LABELER FOR LINE 2 7514 1/1/1995 25 3 3 2 2 3 3 1 4 1 1 1 162 8 5 2 1 10 80 4 4 1280NECK BANDER FOR LINE 2 7520 1/1/1995 25 3 3 2 4 3 5 1 4 1 1 1 198 8 5 2 1 10 80 4 4 1280CARTONER FOR LINE 2 7529 1/1/1995 25 3 3 2 2 3 5 1 4 1 1 1 180 8 5 2 1 10 80 4 4 1280WRAPPER FOR LINE 2 7536 1/1/1995 25 3 3 2 2 3 3 1 4 1 1 1 162 8 5 2 1 10 80 4 4 1280CASE PACKER FOR LINE 2 7541 1/1/1995 25 3 3 2 2 3 3 1 4 1 1 1 162 8 5 2 1 10 80 4 4 1280

Plant XYZ Company Process Map Location Equipment Grp. ATTACHMENTSManufacturer JADE Description AUSW1 Function Model

TypeFailure Failure Failure Deterioration Failure Warning Warning Weeks Proj. E/H Occ Sev RPN Maint Maintenance TaskMode Effect Cause Characteristics Available/Possible? Detection MTBF MTBF Rtg Rtg Option

NEEDLE FEED

FEEDER BOWLS Bowl & Surface WEAR JAM WEAR

Fail to transfer needles at req'd rate 104 E 9 3 27 CBM Inspect & W/O if req'd

Vibratory unitELECTRIC SHORT STOP RANDOM STOPS 260 E 1 8 8 OTF

SHUTTLES Mechanical WEAR STOP WEAR/ JAM STOPS 52 E 3 4 12 OTF

Air cylinders WEAR STOPWEAR/ RANDOM STOPS 52 E 3 4 12 OTF

Sensors STOP RANDOM STOPS 4 E 7 4 28 OTFSolenoids WEAR STOP WEAR STOPS 52 E 3 4 12 OTF

BACKLIGHT CONVEYORS Belts

CONTAMINATED/ DAMAGED/RANDOM STOP WEAR

Fail to transfer needles at req'd rate/ STOPS 16 E 5 4 20 OTF

Replace and perform other PM tasks

Backlights BURN OUT STOP LIFE EXP


Ballest BURN OUT STOP LIFE EXP


sheaves/ bearings WEAR STOP WEAR

Fail to transfer needles at req'd rate/ STOPS 52 H 1 7 7 CBM

Monitor at belt change & W/O if req'd

Step Motors/ Gearbox STOP STOP RANDOM

Fail to transfer needles at req'd rate/ STOPS 16 E 4 7 28 DOM

Component Group Component

Reliability Example: MTBF

MTBF helps you focus on the problems.Line 1

A 10 minute DT per shift in a 5 day 3 shift operation.Line 2

A 10 hour DT once every 1 month.

= 60 hrs. in 6 months= MTBF of 8 hrs. (Poor)

= 60 hrs. in 6 months= MTBF of 480 hrs. (Better)

Reliability Example: MTBF Problem

• Using MTBF:– A equipment in a critical manufacturing area of a

diagnostic product was old and broke down once per month creating a production profit loss of $1MM per event.

– Maintenance had been cut back by 10% for several years saving roughly $1,000/Yr., but EM’s had increased costing $500/Month or $6,000/yr.

– A new approach with the Reliability team performing a FMECA with the OEM has eliminated the failure root cause and the equipment has been running constantly without breakdowns for 8 yrs.

– Performed a FMECA of CM’s, EM’s on Failures using MTBF, then modified or developed PM’s, PdM’s, RTF, and DOM’s.

= Production Profit Loss of $12MM/Yr.

= $1,000/Yr. Maintenance Savings???= $6,000/Yr. EM Spending

= $96MM in additional profit

• Improving MTBF improves equipment reliability and as a consequence …

Equipment Availability!

Reliability

OEE = Availability x Performance x Quality

Background– The measurement of OEE was developed by Seiichi

Nakajima in the 1960’s and deployed thru TPM.

– Mainly used as a continuous improvement metric now also used to evaluate the need of additional capacity spending.

OEE-Overall Equipment Effectiveness

OEE = Availability (Uptime) x Performance (Speed) x Quality (Good Product)

• Availability = Available production time– Equipment available whenever management needs it to perform.

LOSSES: • Planned Downtimes (Change Overs, Lunch or Shift Breaks…)• Unplanned Downtimes (Breakdowns, Missing materials/operators…)

• Performance = Ideal production output– Equipment performs at the correct output recommended by the equipment manufacturer.

LOSSES:• Minor Stops (Component jams, in-process inspections…)• Speed Losses ( Due to material variations, dirty filter CFM’s…)

• Quality = Real production output– Good product that passes inspection the first time.

LOSSES:• Scrap (Damaged, out of tolerance, or unknown) product to be discarded…• Rework (product that can be re-used for good production a second time around.


– What is the Best in Class OEE?


MTTR/MTBFEquipment Reliability


• Availability (B/A)-is usually the biggest loss of the 3 OEE factors.

• By Increasing the Availability (by 5%-10%) the equipment will be able to make more product in less time reducing costs, avoiding the need of additional capital or increasing sales.

• What is the best in class OEE?

– Many advertise its 85%, but this is typically driven by Ideal scenarios that drive spending in the wrong areas on consultants or companies with products to sell.


• The answer is:

…It depends!!!

• What is the OEE of:

– a Light Bulb 100% until it fails… by Availability– a Chiller 100% until it fails… by Availability– Continuous production lines 85% – a batch production Lines 30%-40%

• Where:– Availability is typically in the 40-50% Range– Performance is typically in the 85%-95% range.– Quality is typically in the 95%-100% range.

It is extremely common that Availability is the largest gap.


• High numbers sound great,…but in a batch process…

If a machine runs 100 products/hour and a 4 hour change over occurs every 800 parts then:

Increasing the production speed to 200 products/hour with the same 800 part limit…


Availability=8 hours out of 12=66%Assume:Performance = 100%Quality= 100%The maximum OEE will be: 66% BAD productivity

Availability=4 hours out of 8=50%Assume:Performance = 100%Quality= 100%The maximum OEE will be: 50% Good Productivity

OEE drives productivity within the Available time.

OEE-Overall Equipment EffectivenessExamples: OEE

• Site 1- PR-increased OEE by 14% in 7 equipment's avoiding the purchase of a $27MM new equipment.

(2%-Availability increase-from EM-FMECA reductions)• Site 2 PR-increased OEE’s in packaging by 10% increasing capacity and

absorbing $2MM of additional product on Site. (5% Availability increase-W.O. Planning PM’s, CM’s, PdM’s and EM’s)

• Site 3 CA-Increased OEE’s by 20% increasing output equal to $50MM in additional sales.

(5% Availability increase-MTBF, WO Planning)• Site 4 NJ- Profit increase of $12MM per year since 2006.

(3% Availability increase-EM reductions)

Maintenance Costs:• Warning: Analyze the budget and avoid cutting 10%.• A one time 10% maintenance Budget increase will drive best

practices and deliver at least 10% the failure cost.• Production Downtimes currently cost 5X+ the maintenance costs.Reliability:• MTBF helps focus efforts on deficient equipment.• Promote the use of PdM Technology to predict /prevent failures.Overall Equipment Effectiveness:• Multiple scenarios exist proving production benefits 10X thru 40X.• Reliability approaches reduce failures increasing OEE.

OEE One metric to rule them all.Highlights

Maintenance Costs:• Understand Spend per Maintenance Fingerprint (PM, PdM, CM and EM).• Understand the Production Downtime per Equipment of the Business.• Forecast Budget thru Maintenance enhancements and EM reduction costs.

Reliability:• Perform Site Equipment criticality Assessment.• Perform and Sustain Equipment MTBF Measurements and Identify Targets.• Identify a FMECA roll out plan and monitor MTBF progress.

Overall Equipment Effectiveness:• Identify OEE business needs/Targets: Cost Reduction or Capacity Increase .• Quantify OEE benefits due to Maintenance activities.• Monitor OEE improvements from Reliability improvements on Availability.

Summary

Thank You

OEE Best In Class Targets.

Maintenance Fingerprint.

Difficulties of Implementing and Sustaining OEE.

OEE vs. Lean Manufacturing – How to optimize both.

Other Topics to think about

[email protected]

Reliability

Time Between FailuresTBF TBFTBF TTRTTR

Reduced events= Reduced downtimes

OEE - One Metric to Rule them All

Engineering

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