Advances in Science and Technology Received: 2020.01.

15
Revised: 2020.03.30
Research Journal Accepted: 2020.04.15
Available online: 2020.05.05
Volume 14, Issue 2, June 2020, pages 19–26
https://doi.org/10.12913/22998624/113617

Potential and Limits of OEE in the Total Productivity Management

Ivana Šajdlerová1*, Vladimíra Schindlerová1, Jiří Kratochvíl1

1
VŠB – Technical University of Ostrava, Faculty of Mechanical Engineering, 17. Listopadu 2172/15, 708 33
Ostrava – Poruba, Czech Republic
* Corresponding author’s e-mail: [email protected]

ABSTRACT
For years, management of companies has been turning to proven techniques and tools to achieve even
higher productivity. They hope for, if possible, all-inclusive, easy and efficient procedures to man-
age their production systems. In principle, this applies to all organizations, regardless of the sec-
tor or the company focus. Especially in industrial enterprises with different machines and equipment for
production processes, the quantitative indicator „Overall Equipment Effectiveness“ (OEE) has been used in recent
years as a key indicator to monitor their efficiency and process performance. This indicator provides relatively
simple information about the possibilities and utilization of machines and equipment as well as the quality achieved
in the production processes. If the OEE indicator is determined correctly, based on the available and correct data in
a system, processes can be better controlled, managed and improved. However, it is important to properly monitor
(decode) the data and to understand them. The paper presents the potential but also the limits (obstacles) of Overall
Equipment Effectiveness (OEE) on case studies in selected domestic enterprises in the Moravian-Silesian region.

Keywords: potential, limits, OEE, productivity

INTRODUCTION can be used to track the production cell or pro-

duction cycle of the line. The monitoring is fo-
The key performance indicators monitored cused on the identification and quantification of
by a company management include produc- losses, particularly when examining bottlenecks
tivity indicators and value added processing. in the production flow in three main directions
Companies are forced to pay the utmost atten- (areas): Availability, Performance and Quality.
tion to all processes and to the entire production The OEE indicator can be meaningful not only
system in the sense of the need to continuously in connection with the TPM itself but also in
increase productivity. Productivity means the terms of planning and managing the production
relationship between the outputs produced (the process with regard to the three above-mentioned
effort to maximize them) on the one hand, and directions. The OEE-based monitoring and con-
the inputs needed to implement them (the effort trol looks simple but it actually is not. It has to
to minimize them) on the other. Here, the com- considered how will the individual sub-indicators
mon factor is time. The logical endeavour of the (values) be determined, if enough information is
company management is the way of minimising available, how often and where will the data be
costs while shortening the times for the produc- evalauted, etc. Determining the OEE indicator
tion itself [1, 5, 13]. does not mean the end of the work, but rather its
If the equipment and its operation are the pri- beginning. The work with OEE should change to
mary factor of the value added during the manu- OEE benchmarking [3]. In case the OEE results
facturing process, it is clear that it is necessary and thus its individual parameters are not satis-
to pay attention to this area. The Overall Equip- factory enough, it is necessary to use additional
ment Effectiveness (OEE) performance indicator tools to analyse and identify the problems, which

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will lead to the proposals of possible solutions. the production itself, but it entails the application
Here, the time-proven tools and approaches as- of many of tools (Figure 1). There is a wide range
sociated with the methodology of lean production of tools available, and each enterprise has to de-
or tools used within Six Sigma can be success- termine if it is advantageous for them to use the
fully employed. In today´s world, lean produc- given tools in their processes, and to what extent,
tion (manufacturing) is used in all branches. It especially due to the cost-benefit balances which
represents an approach which should help busi- are involved in each of these tool implementa-
nesses respond flexibly to the current and future, tions [6].
ever-changing and growing customer demands
in a competitive environment. This corresponds
to the access to costs and their minimization to BASIC METHODOLOGY
the necessary amount regarding the value added
through processing. Figure 1 summarizes the selected main no-
Lean manufacturing is associated with the tions and connections of various known tools, ap-
Toyota production system (TPS) developed after proaches and methodologies which can be used
World War II. Lean manufacturing, or lean en- and have the impact on the company effectiveness.
terprise, uses a variety of techniques, tools and Quantitative indicator OEE, as an integral
methods to operate, such as 5S, Kaizen, Kanban, part of the total productive maintenance (TPM)
Total Productive Maintenance (TPM), Structured concept, is connected with the name of Seiichi
Problem Solving, etc. [13]. Nakajima [7]. Nowadays, OEE is widespread in
Studies have shown that the application of repeated production (middle- , large-volume or
the lean production principles still takes place in mass) all around the world. If potential produc-
a fragmented manner, frequently without logi- tion time, theoretical outputs and its full quality
cal continuity [8]. The principle of continual im- are considered as a base, then max. 100% can be
provement is one of the inseparable approaches to gained (it means indicator 1). The best world-class

Fig. 1. OEE in context

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companies achieve OEE value of 85%, but some organization as well” [15]. Some authors consider
of the companies achieve, for example, only 65% benchmarking a part of continuous improvement
[4] or less [11]. The result of OEE depends on the [3]. Internal or external benchmarking can be dis-
type of production, sufficient production require- tiguished. The basis of the term „benchmarking“
ments, real situation, and other conditions and is a word which can be understood as “standard“,
variables. “comparative point” or “scale”.
Implementation and monitoring of OEE is the
source of many benefits, as many authors have
shown. [2] These benefits include: A CASE STUDY ON THE APPLICATION
•• Identification of losses and their quantity;
OF OEE IN PRACTICE
•• Reduction of total downtime;
•• Better equipment utilization; The contribution presents the results based on
•• Shorter lead times;
the analyses conducted in 4 different national and
•• Higher productivity;
international companies.
•• Better results in quality;
The first company produces seat and drive
•• Cost reduction etc.
systems. This type of production represents a
The question is if it is also possible to use the middle- or large-volume manufacturing. The
benefits of OEE indicator in another type of pro- company has been keeping track of the OEE
duction for example for planning and control in indicator for a long time. OEE is measured af-
piece production and to what extent; or, if it is ter the output from the final assembly. The data
possible to employ the results of OEE in another are obtained directly from the assembly station
area than usual. programmable logic controller (PLC). The data
In fact, in practice it is possible to find differ- depend on set standard (MTM) and time when in-
ent tools (or meanings) with relationships which dividual final assemblies go out from the station.
are based on (derived from) OEE like TEEP (To- Adjusting the lines from one variant to anoth-
tal Effective Equipment Performance), PEE (Pro- er product takes about 5 minutes, on average. It is
duction Equipment Effectiveness), OFE (Overall automatically included in line availability when
Factory Effectiveness, OAE (Overall Asset Ef- the PLC indicates that the station is not in auto-
fectiveness), OPE (Overall Production Effective-
matic mode.
ness) etc. [9, 12]. They can be used not only for
The production line is comprised of 8 stations
monitoring and control of the equipment perfor-
where individual operations are performed, see
mance but also for measuring the processes or uti-
Figure 2. Manufacturing of the product is thus
lization of an entire system.
The OEE indicator can also be used for composed of machine operations and manual op-
benchmarking. The term benchmarking has nu- erations (handling) which are performed by op-
merous definitions [18] It could be defined as: erators. It is obvious from Figure 3 that the pro-
“Measurement and process analysis and perfor- portion of manual operations in production is sig-
mance of the organization and finding the best nificantly higher than the proportion of machine
solutions through systematic comparison with the operations.
performance of others. It is the sharing of experi- Machine times are mostly overlapped by
ences and the best practices of comparable orga- other necessary working operations carried out
nizations and the opportunities can be identified by operators. Operation 8 is fully automated (the
to improve processes and procedures within your operator only deploys and removes products).

Table 1. Monitored companies

Number
Type of company Industry Production
of employees
Multinational company (GE) branch in CZ Automotive Production of seat and drive systems 3 000
A subsidiary of an international company (USA) Automotive Assembling recirculation of exhaust gases 130
Production of machine parts, equipment
National company (CZ) Engineering and steel structures; maintenance and 705
service of technological equipment
National company (CZ) Engineering Steel cut shapes production 49

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Advances in Science and Technology Research Journal Vol. 14(2), 2020

Fig. 2. Layout 1[10]

Fig. 3. The ratio of machine and hand times [10]

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As can be seen in Figure 3, station 7 and sta- contingency tables. An example of the avail-
tion 8 are bottlenecks due to its machine times. In able data from the enterprise system is shown in
both cases, the OEE indicator is monitored in the Figure 4.
enterprise. The results achieved before and after The OEE potential to increase productivity is
optimization are shown in Table 2. The optimiza- obvious from the above. However, at this point
tion proposals concerned the introduction of reg- it is good to mention the difficulties (obstacles)
ular weekly maintenance and maintenance plans, which the system set up in the company involves.
process control for adjusters, setting up cleaning The established used OEE tracking system is the
plans and cleaning the machines for operators, same for both machine and manual operations.
elimination of redundant steps and transfer of at the stations with manual operations, it would
be useful to follow or work with a different indi-
operators, reduction of the distances and check-
cator, such as Production Equipment Efficiency.
ing the process data. The OEE was increased in
With manual operations, the MTM method was
both stations. At station 7, the availability was de-
used for determination of time standards. De-
creased due to the introduction of downtime for
termination of the right standard depends on the
regular weekly maintenance. On the other hand, experience and practice of the person setting the
the performance can be increased compared to standards. It can be seen that a standard can be in-
the current state. The original weekly outputs (15 creased to 130%. It would mean that the standard
shifts) of 7.212 pieces could be increased to the was not set precisely or appropriately.
final 11.839 pieces. The second company produces recirculation
of exhaust gases. The layout of workplaces is
Checking of data obtained from the process shown in Figure 5 [17]. The situation is similar
to the example above. Figure 6 shows the ratio
The data obtained from the Company Ma- of machine and hand times. The proposals for the
chines Data Collection System are stored in stan- implementation of KANBAN and FIFO systems
dard MySQL database [14]. Afterwards, they are led to improvement of availability from 89.285%
exported into the Excel sheet and large amounts to 94.047%, which meant increasing of volume
of data are checked (their trends by linear ap- per shift production by about 207 products to the
proximation) in a longer period (week) by using required volume of 2784 products. Individual

Table 2. OEE [10]

before

Station
7

after

before

Station
8

after

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Advances in Science and Technology Research Journal Vol. 14(2), 2020

Fig. 4. Data collection [14]

designs were preceded by mapping of the value The next company which uses the OEE in-
flow and VSM and VSD processing. This led dicator produces machine parts, equipment and
to a better balance of workplaces on the line, steel structures; it also provides maintenance and
resulting in a reduction of the number of opera- service of technological equipment. The data in
tors on the line and annual wage cost savings of the table were gained from the company’s inter-
CZK 600.000. nal system for all machines and equipment [15].
The data from Table 3 show a low OEE value.
Within the performed analyses it was found
Tracking of the OEE indicator is not very suitable
out that inaccuracies occur when monitoring and
for the company, as it focuses mainly on piece
recording data, some changes are not recorded production. These indicators are intended espe-
with all the data needed, it is more complicated cially for serial or mass production. Meaningful
to search for historical data or time load of work- OEE monitoring would be possible on condition
ers for monitoring of OEE (approx. CZK 150.000 that the calculations cover a correction indicator
was spent only on rewriting the OEE forms by the including the number of individual orders, in-
company). cluding their range (number of pieces) and labour

Fig. 5. Layout 2 [17]

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Fig. 6. The ratio of machine and hand times [17]

intensity on a device in the given period. This facilities and information system. The company’s
would lead to the balance of the values between management does not avoid any possibilities how
individual periods, which could then be com- to improve the production system and remain a
pared with each other and serve as a benchmark competitive company. Therefore, the company
indicator. However, this does not change the fact considered the possibility of taking advantage of
that the achieved OEE would remain low due to the OEE monitoring in the manufacturing pro-
the production type. cess. In this case, it was not possible to determine
However, another problem has been identi- the OEE because, in principle, all the required
fied in this case, namely that if we assume that the data could not be obtained from the newly built
maximum value of the OEE coefficient equals 1 information system (first deployed in 2016). This
(100%), then it is obvious that the quality indica- was caused by insufficient or sometimes even
tor must be higher than 100%, which is a non- incorrect records into the system, by a system
sense. This implies that the setting of the internal which was not connected with the system used at
system to calculate the OEE is poor and therefore the workshop etc., but also by an inappropriately
the information for the management is misleading selected information system that is not primarily
(Table 4). designed to control production and will be dif-
The last monitored company is engaged in ficult to modify for that purpose. Here, the high
the production of steel cut shapes. It is a piece to importance of choosing the right ERP system that
small-scale production in a traditionally managed will support business planning and management
company which tries to invest in new production can be seen.

Table 3. Value of OEE [15]

CONCLUSIONS
Availability Performance
Equipment OEE (%)
(%) (%)
The achieved results demonstrate and prove
Lathes 43 77 41
that the OEE indicator has a great significance
Milling for monitoring and control of production per-
32 58 29
machines
formance. Using the OEE and its visualization
Carousels 48 57 36
has brought positive results with an impact on
Others 22 100 22
efficiency of the production process. The OEE

Table 4. Value of OEE [15]

Equipment Availability (%) Performance (%) OEE (%) Quality (%)
Lathes 43 77 41 124
Milling machines 32 58 29 156
Carousels 48 57 36 132
Others 22 100 22 100

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