OEE & Six Loss Model
The Theory of Constraints (TOC):
I’ve taken this definition of TOC from Wikipedia:
“According to TOC, every organization has – at any given point in time – at least one constraint which limits the system’s performance relative to its goal (see Liebig’s law of the minimum). These constraints can be broadly classified as either an internal constraint or a market constraint. In order to manage the performance of the system, the constraint must be identified and managed correctly (according to the Five Focusing Steps below). Over time the constraint may change (e.g., because the previous constraint was managed successfully, or because of a changing environment) and the analysis starts anew.”
In a manufacturing context our role as operational managers is to identify what we ( and the business) want to achieve, identify the constraint to this, work out which measures most accurately measure our progress to this goal, and then manage that constraint accordingly.
Therefore if what you want to achieve is: “Optimise a production line to increase production output” we probably want some form of OEE or mechanical efficiency measure in our management dashboard.
If our goal is “reduce cost to produce product in an overly-capable plant” then we may want some form of cost/tonne, tonne/man-hour, or takt time/cycle time adherence metric in our management dashboard.
So let’s look at the first example and use OEE as a method of managing our constraint.
I don’t believe it’s the OEE of the constraint that you really want to know as this will just tell you what you’ve made….it won’t tell you where you need to work to improve. What you really want to know is how your losses to OEE caused the constraint to run slowly or stop.
So which part of my plant I need to get my measure from?
When you’re running individual machines it’s pretty easy to create an OEE measure for each machine. But what about if you run a series of machines connected by conveyors? Or more specially, what about getting a single OEE figure for an entire production line?
Here are a few examples of how people have measured OEE that we’ve come across over the years…and they have varying degrees of accuracy!
- Cases produced at the palletiser
- Units produced on the most expense machine
- The slowest running piece of equipment
- Raw materials consumed in the process area
- Labels applied to products
- Count at a particular machine not at the end of the line
- Averaging the OEE’s of every machine
Based on TOC the right point to have your measure is the point at which your goal is being confined. In the majority of FMCG plants that I’ve worked in with a goal if increasing output the constraint has typically been the filling machine.
So here are a few TOC questions for you:
- Do your teams know which machine or process is the real constraint to your goal?
- Are your measures targeted on this constraint (really check – I’ve visited plants in which labour is the biggest constraint only to find an OEE measure ruling the site. The outcome; few operators running few machines into the ground to get high OEE’s. Imagine now if this was an aerospace plant – surely as a potential plane passenger you’d want the primary metric to be a defect or quality metric rather than OEE!)?
- Are these measures giving you the information you need to help your teams make the right decisions to reduce loss to your goal?
Please feel free to get in contact if you would like to discuss this further. At OptimumFX we spend most of our time helping sites to identify the real bottlenecks to their processes, and then apply the right tools to that bottleneck to measure performance and improve decision making, We regularly help sites create manual collection processes, quick bolt on solutions such as the XL800, or fully integrated enterprise solutions such as LineView and MachineView.
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What does OEE stand for?Correct
What are the 3 elements of OEE?Correct
What are the 2 Availability losses?Correct
What are common reasons for Minor Stops?Correct
Which method is recommended for reducing Planned Downtime/Changeovers?Correct
The answer we were looking for is SMED (Single Minute Exchange of Dies)