OVERALL Equipment Effectiveness A Powerful Production/Maintenance Tool for Increased Profits By Robert C. Hansen Industrial Press Inc. Library of Congress Cataloging-in-Publication Data Hansen, Robert C. Overall equipment effectiveness: a powerful production/maintenance tool for increased profits / Robert C. Hansen. p. cm. Includes bibliographical references and index. ISBN 978-0-8311-9115-3 1. Total productive maintenance. 2. Industrial equipment. I. Title. TS192 .H363 2001 658.2’02--dc21 2001051667 Industrial Press, Inc. 200 Madison Avenue New York, NY 10016-4078 First Edition, November 2001 Sponsoring Editor: John Carleo Interior Text and Cover Design: Janet Romano Developmental Editor: Robert Weinstein Copyright © 2002 by Industrial Press Inc., New York. Printed in the United States of America. All right reserved. This book, or any parts thereof, may not be reproduced, stored in a retrieval system, or transmitted in any form without the permission of the publisher. Printed in the United States of America 10 9 8 7 6 5 4 3 Overall Equipment Effectiveness (OEE) began to be recognized as a fundamental method for measuring plant performance in the late 1980s and early 1990s. It was a period that saw the emergence of serious big company maintenance benchmarking, the introduction of Total Productive Maintenance (TPM) in America, and the founding of the Society for Maintenance & Reliability Professionals. At first, OEE was closely bound to TPM and often was seen as a vague defining measurement for winning the TPM Prize. Then, as more practitioners were exposed to OEE in TPM-related articles and seminars, it was viewed as a standalone tool for measuring true performance by merging performance indicators for availability, efficiency, and quality. OEE came to be further valued as a change agent for bringing maintenance, operations, and engineering together to address the higher-level issues of plant performance. Now, it is accepted by management consultants as a primary performance metric. Recognizing OEE as an effective productivity management metric is one thing, using it effectively is another, as many practitioners have found out. The OEE learning curve can be steep. Bob Hansen has been there, climbed over the obstacles, and survived to develop a practical how-to approach to using OEE which he lays out in Overall Equipment Effectiveness: A Powerful Production/Maintenance Tool for Increased Profits. I’ve known Bob for a number of years as a maintenance and reliability practitioner, seminar leader, and author of magazine articles. I’ve found his analysis of OEE and related productivity processes insightful and practical, as have members of the maintenance and reliability community. Now, he has put everything together to build this comprehensive reference. Not only does he cover OEE, but he presents related productivity and reliability tools in a format for quick application. He provides practical tips on what to do and how to do it. As such, the book becomes a must-have desk reference for maintenance managers, production foremen, reliability engineers, manufacturing executives, and plant leadership teams. Robert C. Baldwin, CMRP Editor, Maintenance Technology Magazine Barrington, IL Overall Equipment Effectiveness: A Powerful Production and Maintenance Tool for Increased Profits brings together both the social and technical aspects of successful manufacturing and processing. I would have paid many times over to have such a book at the start of my manufacturing career. The book is a practitioner’s primer; it demonstrates how to apply and improve overall equipment effectiveness at your factory or processing plant. Picture yourself facing a majestic mountain that represents performance excellence at its peak. Every factory or processing plant represents a mountain and no two are exactly the same. In fact, each changes whenever its products, processes, materials, or people change. Achieving excellence is a continuous climb. You have many decisions: where to start climbing the mountain, what to take with you, how to use your resources, and which tools to use to measure your progress. A wise person would first engage those who have made the climb before and learn from them what worked and what didn’t work. This book lays out guidelines and strategies for a successful climb. It is not the only way to success; however, it can reveal new trails that help shorten the journey. Every department and area where I have worked has demonstrated some level of progress over its years of operation. When significant jumps in productivity were made, I thought about the vast amount of income that could have been realized had the practices and procedures that identify and leverage the “hidden factory” been implemented years earlier. I hope that plant and corporate managers accountable for production operations not only learn the concepts and theories but also take the responsibility to personally champion OEE. If you are not supporting reliability, then you are supporting failures. The concept of true OEE is the most important aspect of this book. This book is worth its weight in platinum if all it does is help you discover your plant’s true position relative to its current performance. This potential is determined by taking the actual quantity of good product transferred out and dividing it by the total amount that could be made in all the hours of scheduled production. This amount is what could be made without any losses due to quality, speed rate, equipment downtime, changeovers, start-ups, shutdowns, or lack of materials and supplies. If your plant is in the envious position of selling everything it can make, then your hidden factory is the difference between what good product was transferred out in the past twelve months and what could be made in 8760 hours of perfect production. Parts of this book focus on collecting data, generating information, prioritizing, and selecting ways to significantly improve the bottom line. A major goal is to show how to identify the improvements a project should yield in financial terms, then to actually generate those results. I have outlined a methodology that links OEE and equipment reliability improvements to bottom line increased income for operations. This methodology is a powerful tool that should assist every engineer, foreman, department head, and manager in selecting the right projects and then communicating the benefits in financial terms. A portion of this book provides tools and techniques for examining the inherent reliability of existing or proposed equipment systems and design for reliability methodology. These include reliability block diagrams and computer simulations of modeled systems. The book refers to software that can be freely downloaded from the Internet. The examples demonstrate practical applications that investigate possible improvements. The software program can perform the vast majority of that provided by highly-priced commercial simulation software. Another useful
