1

OEE y KPI´S
EDSON
ORBE SANCHEZ JORGE EMMANUEL
OROZCO PIÑA BRANDON
VEGA VENTURA LUIS RICARDO
EQUIPO 7
Who created the OEE? 2

It was used for the first time by

Seiichi Nakajima as the
fundamental measurement
tool to meet the productive
performance of industrial
machines.

Seiichi Nakajima (1919 to 2015)

What is Overall Equipment Effectiveness (OEE)? 3
Is the gold standard for measuring manufacturing productivity. It
identifies the percentage of manufacturing time that is truly
productive.

 OEE=100% =Quality (only Good Parts).

 OEE= 100%=Performance (as fast as possible).
 OEE=100%=Availability (no Stop Time).
 Objective of OEE
4
When you measuring OEE , you will gain important insights on how to systematically
improve your manufacturing process. OEE is the single best metric for identifying losses
and improving the productivity of manufacturing equipment (i.e., eliminating waste).

 Eliminate what are called the Six Big Losses.

 Find the hidden factory.
 Where do we start? 5

Let’s start with All Time. This is also called 24/7 time (it includes every minute of every day).

From All Time, you subtract Schedule Loss, which includes all time that should be excluded
from OEE analysis because there is no intention of running production during this time
(e.g., plant shutdowns, breaks/lunches, or periods where there are no orders).

Now we will look at the three OEE factors, each of which takes into account a different type
of loss. They are Availability, Performance and Quality.
 The three OEE factors
6
 Availability
Availability Loss, which includes any events that stop planned production for an
appreciable length of time, such as equipment failures and material shortages,
and Planned Stops (such as changeover time).

 Performance
Performance Loss is anything that causes the manufacturing process to run at less than
the maximum possible speed when it is running (including both Slow Cycles and Small
Stops), such machine wear, substandard materials and jams.
 The three OEE factors
7

 QUALITY
Quality takes into account Quality Loss, which accounts for manufactured parts that do not
meet quality standards.
Examples of things that create Quality Loss include scrap and parts that need rework.
8
Six Big Losses 9
 Six Big Losses 10

 Equipment Failure
It’s any significant period of time in
which equipment is scheduled for
production but is not running due
a failure of some sort.
Examples of common reasons for
equipment failure include tooling
failure, breakdowns, and
unplanned maintenance.
 Six Big Losses 11

 Setup and Adjustments

It’s any significant periods of
time in which equipment is
scheduled for production but is
not running due to a
changeover or other equipment
adjustment.
Examples: setup, changeovers,
major adjustments, and tooling
adjustments, cleaning, warmup
time, planned maintenance,
and quality inspections.
 Six Big Losses
12
 Idling and Minor Stops
It’s the time where the equipment stops for a short period of time (typically a
minute or two) with the stop resolved by the operator.
Examples: misfeeds, material jams, obstructed product flow, incorrect settings,
misaligned or blocked sensors, equipment design issues, and periodic quick
cleaning.
Six Big Losses 13
 Reduced Speed
It’s the time where equipment runs
slower than the Ideal Cycle Time (the
theoretical fastest possible time to
manufacture one part).
Examples: dirty or worn out
equipment, poor lubrication,
substandard materials, poor
environmental conditions, operator
inexperience, startup, and shutdown.
 Six Big Losses 14
 Process Defects
Are the defective parts produced during stable production. This includes scrapped parts as
well as parts that can be reworked, since OEE measures quality from a First Pass
Yield perspective. Process defects are a Quality Loss.
Examples: incorrect equipment settings, operator or equipment handling errors, and lot
expiration (e.g., in pharmaceutical plants).
 Six Big Losses 15

 Reduced Yield
It describe defective parts produced
from startup until stable (steady-
state) production is reached. This
includes scrapped parts as well as
parts that can be reworked.
Examples: suboptimal changeovers,
incorrect settings when a new part is
run, equipment that needs warmup
cycles, or equipment that inherently
creates waste after startup (e.g., a
web press).
 16

Hidden factory
 WHAT IS THE HIDDEN FACTORY? 17
 The term “hidden factory” was popularized by Armand
Feigenbaum in the late 1970’s. Feigenbaum’s concept of the
hidden factory was primarily focused on quality, specifically the
waste and costs caused by “bad work”, much of which is “hidden”
below the surface of day-to-day operations.
 Hidden factory 18

 The hidden factory represents the untapped capacity of your

manufacturing plant,the maximum amount of additional
production that can be unlocked without capital investment. Fully
utilizing your hidden factory means around the clock perfect
production
 Manufacturing only good pieces, as fast as possible, with no
downtime, every hour of every day.
 Hidden Factory calculation 19

 The untapped production potential in the hidden factory is

typically very significant. Many manufacturers are surprised to learn
that they have more capacity in their hidden factory than they are
using in their actual factory.
Four areas of lost (or hidden) production
potential 20
four areas of lost
21
 How to calculate the hidden
22
factory?
 The fastest way to discover how much potential is in your hidden factory is to
perform two very simple calculations:

 Good Pieces are pieces that pass through the manufacturing

process the first time without needing any rework.
 Ideal Cycle Time is the theoretically fastest cycle time your process
can achieve under optimal conditions
How to calculate the hidden factory? 23

 Fully Productive Time represents how close you are to perfect

production - manufacturing only good parts, as fast as possible,
with no downtime.
 How to calculate the hidden 24

factory?
 Second, calculate your Hidden Factory by subtracting Fully
Productive Time from All Time (24/7). This Hidden Factory time
represents the untapped capacity of your manufacturing plant.
 How to calculate the hidden 25

factory?
 The hidden factory takes into account all four types of lost time
described earlier: Schedule Loss, Availability Loss, Performance Loss,
and Quality Loss.
BENEFITS OF TAPPING INTO YOUR HIDDEN FACTORY 26
The most significant benefit of tapping into your hidden factory is that you can
increase throughput without additional capital expenditures. Simply put – making
more with what you already have. When you increase throughput, this enables
three big benefits:
 Decreased Conversion Cost: Fixed costs are spread over more output (increasing
profitability)
 BENEFITS OF TAPPING INTO YOUR HIDDEN
27
FACTORY
 Increased Flexibility: Shorter production runs are possible, improving lead times
and reducing inventory.
 Deferred Spend: Increase throughput on existing assets and defer spending on
new equipment or facilities.
 BENEFITS OF TAPPING INTO YOUR HIDDEN 28
FACTORY
 At the factory-floor level, tapping into your hidden factory can decrease
overtime or eliminate outsourced production.
 29

OEE calculation
 SIMPLE CALCULATION 30
 The simplest way to calculate OEE is as the ratio of Fully Productive
Time to Planned Production Time.
 PREFERRED CALCULATION 31
 The preferred OEE calculation is based on the three OEE
Factors: Availability, Performance, and Quality.
Example 32
33
 What is KPI ?
34
KPI means: Key Performance Indicators.
KPI’s characteristics
35
• A KPI must be measurable 36
• A KPI is expressed as a percentage. 37
• KPI’s must be achievable. 38
 39
• Any KPI must be relevant
 40
• A KPI is measured very frequently
 41
• We must have a KPI available on time
 42
• KPI’s always promote actions
Questions we must ask to know how to
choose KPI’s correctly.
43
• What goals and objectives do we pursue? 44
• Do such KPI’s influence the goals of the 45
company?
 46
• Are our indexes are comparable?
• Which department of the company will be the 47
manager of the KPI?
• How often are the progresses going to be evaluated? 48
 49
• Who will measure the KPI’s and with what tools?
 50
What personnel will take the actions based on the result of
the KPI’s?
 51
• Will the KPI help us calculate the ROI (Return On investment)?
 52

Example of
performance
monitoring
Example Machine
53
with quick
change of
tooling
 taking into account that
a SMED work has been
carried out on the
production line shown,
to try to reduce the tool
change time from A to
B, which initially was 15
minutes.
Example  Indicates that there is something that
affects the improvements introduced,
54
and that should be worked on, or the
performance is not sustainable

KPI-tool change time

current go
al
 55
Dashboards QCDSM
Dashboards 56

 Quality:Provides information about

the quality level of the section
Dashboards 57

 Cost:Displays information regarding the

manufacturing cost
Dashboards 58

 Delibery:It presents information referred to the

level of service provided to the client or relative to
variables that may affect that level of service.
 Dashboards 59

 Safety:It collects information related to the

evaluation of safety in the area.
 Dashboards 60

 Moral:Reports on the involvement or

motivation of the team of people
assigned to the area
 information sources 61
 https://www.oee.com/
 ruiz, m. and sánchez, j. (2010). Lean manufacturing la evidencia de
una necesidad. 1st ed. España: diaz de santos, p.259.
 Socconini, L. (2009). "Lean manufacturing" paso a paso.
Tlalnepantla, Estado de México: Grupo Editorial Norma.
 https://manuelguerrerocano.com/kpi-metricas-lean-
manufacturing/