Top 6 Losses in OEE

Tony Ferraro | June 30, 2014

OEE and Understanding the Most Common Areas of Loss

Tracking your facility’s productivity is an important way to keep up to date on how efficient your business is operating, and how to make improvements. The OEE standard helps manufacturing companies keep track of how things are going, and identify where they are experiencing excessive downtime or other inefficiencies.

While every company is unique in many ways, virtually all of them will struggle with the same six categories of efficiency problems. Understanding what these areas of loss are can help you to identify them in your facility, and take action to have them minimized or eliminated. So, let’s look at the six types of loss, in no particular order.

Loss #1 – Breakdowns

Breakdowns are one of the most frustrating types of efficiency loss because they are unexpected, and can often result in a complete stoppage of work. When an important tool, machine or other piece of equipment breaks down, it is necessary to take quick action to help get it fixed or replaced so work can begin again.

There are a number of ways you can prevent this type of issue, and minimize the impact when it does occur. Consider implementing these ideas to help limit the impact of any breakdown in your facility:

  • Regularly Scheduled Maintenance – All essential tools and machines should be inspected on a regular basis, and have maintenance performed on them. Preventing breakdowns is the best way to avoid work stoppages so always keep up on all necessary maintenance including changing fluids, replacing worn parts and doing any other maintenance recommended by the manufacturer. Its also important to think safety first, and make sure when a machine needs repair that you follow proper lockout/tagout procedures. For example, attaching a lockout hasp on a machine can prevent an injury from occurring when the machine is down for maintenance.
  • Replacements – For many tools and machines it may be a good idea to have replacements right on site. If a particular tool or machine is essential for production, you should have a backup on site that you can put into place to minimize the total down time.
  • Replacement Parts – For larger machines where having a full backup is not realistic, you should have replacement parts on site for key components. This will help to streamline the repairs so you can get up and running again fast.

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Loss #2 – Setup & Adjustments

Another thing that can really reduce the overall productivity of a facility is the down time experienced when doing any type of set up or adjustment. For example, if you have to retool a machine to begin making a different product; that is a time consuming task that can result in a significant amount of down time.

This type of loss is also caused by shortages in materials or inventory, or even insufficient staffing to get specific jobs done.

While these types of things are certainly necessary in most facilities, they should be minimized as much as possible. Some options when looking into reducing the down time loss related to set up and adjustment could include:

  • Planning for Future Orders – In many companies it may be possible to predict how many orders of a particular part or product will be made in the future. Creating them now and storing them for when those orders come in will limit the number of times you’ll need to go through the setup and adjustment process.
  • Like Order Scheduling – When you have similar orders from different customers, for example, you can process them all together so you can complete larger numbers of specific parts or products with fewer changes.
  • On Site Inventory Planning – When a facility runs out of one or more materials that are needed to complete a job, it can cause the entire line to have to shut down. While it is not a good idea to overstock on site inventory, you also never want to run out. This is a difficult balance, but with proper on site inventory planning and supply chain management you can avoid this down time.

Loss #3 – Small Stops

Despite the name, small stops are anything but small when it comes to creating down time and inefficiencies for the facility. Small stops are all the little things that cause a facility to slow their production. Some examples of this would include blocked sensors, conveyer belts backing up, jams in components, mis-feeds into or out of machines, and any number of other similar problems.

These types of issues typically only slow down or stop work for a very short period of time, but since they can happen at virtually any step in the manufacturing process, they can add up quickly. Most facilities will categorize any work stoppage that is under five minutes as a small stop. In addition, the majority of these types of stops don’t actually halt the entire production, but just one specific area of it.

While these small stops are difficult to eliminate because of their nature, there are some things that can be done to cut back on them quite significantly, including the following:

  • Standardize Best Practices – One of the best ways to ensure there aren’t any small stops related to human causes is to standardize how work is done, using best practices. When everyone is doing things the same way, there is less opportunity for mistakes to be made.
  • Immediate Notification – In the event that something does cause a small stoppage, it is helpful to be notified about it immediately so the down time is minimized. Setting up automated or manual processes of finding issues and responding to them quickly will limit the impact of any of these problems.
  • Authorize Intervention – Giving employees at every level the authorization to fix small issues as they see them can be a great way to reduce these types of problems. If someone sees a part going into a machine improperly, for example, they should be able to adjust it on the fly, even if it is not directly related to their job.

Loss #4 – Reduced Speed

This is perhaps the type of loss that can be the most difficult to identify or even notice while it is happening. Things can appear to be running smoothly throughout the facility, but when things are not operating at optimal speed, there is a significant loss in productivity.

Reduced speed is measured by taking the maximum speed, or ideal run rate, of the facility and then comparing it to the actual output that is being produced. While it is very difficult, if not impossible, to operate at 100% maximum efficiency for long periods of time, it should always be the goal to get as close to that as possible.

Some things that often cause reduced speed include operator’s performing their jobs improperly, or not according to established best practices, machines operating poorly due to mechanical problems, or any number of other things. Consider looking into the following ideas to help increase running speed of your facility.

  • Evaluate Best Practices – Your facility should be constantly evaluating the way jobs are performed to see if there are better ways to get things done. Having everyone operate according to uniform best practices will help dramatically improve efficiency.
  • Keep Machines Well Maintained – If a machine is operating poorly due to mechanical or other problems, make sure they are fixed as quickly as possible to they can run at or near the ideal run rate established by the manufacturer.
  • Avoid Intentional Speed Reductions – Some facilities will run particular machines at reduced speeds to avoid over production. It is better, however, to just complete the production quickly and shut down than it would be to stretch out any production operation.

Loss #5 – Startup Rejects

This type of loss often occurs when switching over to a new product or when other changes are made. In many cases the first set of products made have some sort of issue, so they can’t be used. This results in a lot of scrapped products, or items that need to be fixed or even rerun through the manufacturing process.

There are many causes of this type of loss, and they are often difficult to eliminate due to the fact that they are not seen until the damage is done. Taking the necessary time to ensure each new startup is performed properly, however, will help to reduce the amount of startup rejects. The following are other ways to lower this type of loss:

  • Small Initial Runs – In some facilities it is best to just run a small initial product line to identify any potential problems. Operating at low efficiency, in this case, may be better than having to scrap or rerun a full line.
  • Improve Startup Procedures – If you find that you experience startup rejects of the same type on a regular basis, you may need to reevaluate how things are done.
  • Implementing Improved Problem Monitoring – Implementing improved problem monitoring systems can help to identify the issues during the startup process as soon as they happen. This allows issues to be fixed more quickly so there is less loss and fewer products are impacted.

Loss #6 – Production Rejects

Production rejects are similar to the startup rejects, but they can occur at any time. These are often more difficult to fix because of this reason. Tracking down what is causing these rejects is extremely important, and making necessary changes to eliminate or at least reduce them will help ensure the facility is running more efficiently.

In order to address loss due to production rejects, facilities need to be constantly watching out for anything in common with the rejected items. In addition, this is a never ending process since rejects can begin occurring due to problems with a machine that may develop over time.

Some good ways to address production rejects in any facility include the following:

  • Reject Tracking – Tracking details about every rejected product will help to find the root cause more quickly. This is especially helpful for issues where you can’t pinpoint the exact cause of the problem. As you continue to gather more information, you will eventually be able to fix the real problem.
  • Downtime Inspections – If you find that a particular machine is causing rejected parts, make sure you take the time to do a detailed inspection of that machine. Unless it is causing frequent problems, this type of inspection can often take place during scheduled down time to help minimize the loss of productivity.
  • Active Monitoring – Another way to reduce the impact of production rejects is to find them as soon as they occur. This can not only help you to identify where the problem is occurring, but also make it so a product with a problem does not have to go through the entire production process. Rejecting it, or fixing it and sending it down the line, is much more efficient than only finding the problem at the very end of the process.

Impact of Loss

The six loss categories above can be separated into three different types of loss, and it is important to know about each of them:

  1. Down Time Loss – When production comes to a halt, it will be classified as down time loss. Typically, breakdown loss and setup & adjustment loss are classified as causing down time. This is typically the most serious type when it comes to requiring immediate action.
  2. Speed Loss – This classification is when the facility is still operating, but at a less than optimal rate. Small stops and reduced speed losses are classified here, and if ignored will have a major impact on the long term productivity of any facility.
  3. Quality Loss – When products aren’t meeting the right level of quality it can have long reaching impacts on the company. Products will either need to be reworked, or the end customers will complain and possibly find another company to make what they need. Startup and production rejects are classified in this type of loss.

Putting in the Effort to Limit OEE Losses

Understanding what each of these different types of OEE losses are, and how you can combat them is very important. Of course, no facility will ever be able to entirely eliminate all losses from their facility, but it is something that is worth working toward.

By staying constantly vigilant to any of these types of losses, and taking action to minimize or eliminate them, your facility will be able to operate much more efficiently. In addition, as you eliminate larger losses, you’ll be able to more easily identify smaller once, which helps to keep your company on the path toward realizing maximum productivity and profitability.

For all of your 5S and safety needs, make sure you contact Creative Safety Supply at 1-866-777-1360.

Source: The Fast Guide to OEE – by Vorne Industries

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