OEE ExampleLEAN Execution "Defining Excellence: Solutions in real time for real results"Vergence Business Associates - Manufacturing ConsultantsVergence Business Associates - Manufacturing ConsultantsRedge Semplonius - President & CEOToronto, Ontario, CanadaToronto, Ontario, CanadaFocus For SuccessLean Execution Advanced Strategy TeamProviding Solutions in Real Time for Real ResultsOEE is comprised of three factors: Availability, Performance, and Quality. While calculating these factors is fairly straightforward, it is important to recognize that a standard definition for OEE does notexist. It is important to understand the assumptions you are making to make sure that you understand the final OEE result.Focus For SuccessLean Manufacturing, Six Sigma, Quality Systems (TS-16949, ISO9001)OEE measures how effectively TIME is used to produce a quality product. We have established the following definitions of TIME to be used to calculate OEE:1. Scheduled Production Time or Planned Production Time2. Planned Down Time: Scheduled down time events3. Unplanned Down Time: Unscheduled down time events4. NAT = Net Available Time (Scheduled ProductionTime - Planned Down Time)5. NOT = Net Operating Time (Net Available Time - Unplanned Down Time)6. IOT = Ideal Operating Time (Time to Produce All Parts at Rate)7. LOT = Lost Operating Time Due to Production of Scrap or Non-Saleable Product.Although we will provide examples of these calculations, the following formulas are used to calculate each of the OEE factors and overall OEE:1. Availability % = NOT / NAT * 1002. Performance %= IOT / NOT * 1003. Quality = (1 - (LOT / IOT)) * 100 OR Quality = (IOT - LOT) / IOT * 1004. OEE = Availability * Performance * QualityYou will notice that a quick way to check your OEE result is to calculate the time required to make good partsdivided by the Net Available Time:OEE = (IOT - LOT) / NATCalculating OEE: A real life exampleAn8 hour shift is scheduled to produce three parts as shown in the schedule below. The shift has two 10 minute breaks and a 5 minute clean up period.Production Schedule:M/C: A Part #: A123, Cycle: 10 (seconds),Produced: 2240, SCRAP: 50, Unplanned Downtime: 32 minutesM/C:B Part #: B456, Cycle: 45 (seconds),Produced: 450, SCRAP: 25, Unplanned Downtime: 18 minutesM/C: C Part #: C789, Cycle: 70 (seconds),Produced: 229, SCRAP: 11, Unplanned Downtime: 22 minutesCalculating OEECalculating OEE starts by calculating the Net Available Time, Net Operating Time, Ideal Operating Team, and Lost Operating Time as shown in the table below.MachinePart NumberDepartmentCustomerCycle TimeSecondsProduction Time Report (Minutes)QuantityCalculated Times (Minutes)Planned Production TimePlanned Rest Periods (Breaks)Unplanned DowntimeTotalProducedScrapNAT - Net AvailableNOT - Net OperatingIOT - Ideal OperatingLOT - Lost OperatingVAT - Value AddedAA123WeldParadigm104802532224050455.0423.0373.38.3365.0BB456AssemblyACME45480251845025455.0437.0337.518.8318.8CC789AssemblyParadigm70360152222911345.0323.0267.212.8254.3Totals132065722919861255.01183.0978.039.9938.1Now we can calculate the OEE for each process and for the shift. We will also calculate the weighted factors and overall equipment effectiveness.MachinePart NumberDepartmentCustomerCycle TimeSecondsAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4AA123WeldParadigm1093.0%33.7%88.3%31.6%97.8%37.3%80.2%29.1%80.2%29.1%BB456AssemblyACME4596.0%34.8%77.2%28.5%94.4%32.6%70.1%25.4%70.1%25.4%CC789AssemblyParadigm7093.6%25.7%82.7%22.6%95.2%26.0%73.7%20.3%73.7%20.3%Totals94.3%94.3%82.7%82.7%95.9%95.9%74.7%74.7%74.7%74.7%NotesFormula to calculate weighted factors and Overall Equipment Effectiveness1Weighted Availability = Availability % * (Net Available Time / Total Net Available Time)The total weighted Availability is the SUM of the individual processes.2Weighted Performance = Performance % * (Net Operating Time / Total Net Operating Time)The total weighted Performance is the SUM of the individual processes.3Weighted Quality = Quality % * (Ideal Operating Time / Total Ideal Operating Time)The total weighted Quality is the SUM of the individual processes.4Weighted OEE = OEE % * (Net Available Time / Total Net Available Time)The total weighted OEE is the sum of the individual processes.Note that the weighted OEE and factors are not simply arithmetic averages. We have calculated the averages for each of the factors as an extension of the example above to demonstrate this fact.Averages94.2%82.7%95.8%74.7%74.7%Using the data from the example above we can easily calculate the OEE for each department as shown in the table below:Production Data and Time Calculations by DepartmentDepartmentCalculate Total Times for each Department. Note Quantities are shown for reference only.Production Time Report (Minutes)QuantityCalculated Times (Minutes)Planned Production TimePlanned Rest Periods (Breaks)Unplanned DowntimeTotalProducedScrapNAT - Net AvailableNOT - Net OperatingIOT - Ideal OperatingLOT - Lost OperatingVAT - Value AddedWeld4802532224050455.0423.0373.38.3365.0Assembly840404067936800.0760.0604.731.6573.1Totals132065722919861255.01183.0978.039.9938.1OEE Calculated by DepartmentDepartmentAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4Weld93.0%33.7%88.3%31.6%97.8%37.3%80.2%29.1%80.2%29.1%Assembly95.0%60.6%79.6%51.1%94.8%58.6%71.6%45.7%71.6%45.7%Totals94.3%94.3%82.7%82.7%95.9%95.9%74.7%74.7%74.7%74.7%The OEE calculations suggest that the Assembly process is not as effective as welding.Using the same base line data is possible for us to calculate the OEE for each customer. When reviewing the data note how the "weighted" factors have changed. Also note that the overall OEE remains the same.Production Data and Time Calculations by CustomerCustomerCalculate Total Times for each Customer. Note Quantities are shown for reference only.Production Time Report (Minutes)QuantityCalculated Times (Minutes)Planned Production TimePlanned Rest Periods (Breaks)Unplanned DowntimeTotalProducedScrapNAT - Net AvailableNOT - Net OperatingIOT - Ideal OperatingLOT - Lost OperatingVAT - Value AddedACME480251845025455.0437.0337.518.8318.8Paradigm8404054246961800.0746.0640.521.2619.3Totals1320657229198612551183978.039.9938.1OEE Calculated by CustomerCustomerAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4ACME96.0%34.8%77.2%28.5%94.4%32.6%70.1%25.4%70.1%25.4%Paradigm93.3%59.4%85.9%54.1%96.7%63.3%77.4%49.3%77.4%49.3%Totals94.3%94.3%82.7%82.7%95.9%95.9%74.7%74.7%74.7%74.7%The OEE calculations in this case suggest that the processes for Paradigm are more effective than ACME.What if we want to know what to focus on for the assembly operation or what if the customer only cares about their processes?To calculate the OEE for Paradigm alone, we use the same process as in the previous examples.In the Customer example below, the weighted OEE and factors are based on ALL processes.PARADIGM OEE CalculationsMachinePart NumberCustomerCalculate Total Times for all parts supplied to ParadigmProduction Time Report (Minutes)QuantityCalculated Times (Minutes)Planned Production TimePlanned Rest Periods (Breaks)Unplanned DowntimeTotalProducedScrapNAT - Net AvailableNOT - Net OperatingIOT - Ideal OperatingLOT - Lost OperatingVAT - Value AddedAA123WeldParadigm104802532224050455.0423.0373.38.3365.0CC789AssemblyParadigm70360152222911345.0323.0267.212.8254.3Totals8404054246961800.0746.0640.521.2619.3MachinePart NumberCustomerAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4AA123WeldParadigm1093.0%33.7%88.3%31.6%97.8%37.3%80.2%29.1%80.2%29.1%CC789AssemblyParadigm7093.6%25.7%82.7%22.6%95.2%26.0%73.7%20.3%73.7%20.3%Totals93.3%59.4%85.9%54.1%96.7%63.3%77.4%49.3%77.4%49.3%It appears that the assembly process for Paradigm parts should be improved compared to the welding operation. Focus should be applied to assembly performance from an efficiency perspective.If Paradigm is ONLY interested in how their processes are running, then the weighting of the OEE and factors should be calculated for their process as shown in the table below.Note that the only change is the Weighted OEE. Comparing this table to the above weighted calculations, you can see how Paradigms processes contribute to the overall OEE for the shift.MachinePart NumberCustomerAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4AA123WeldParadigm1093.0%52.9%88.3%50.0%97.8%57.0%80.2%45.6%80.2%45.6%CC789AssemblyParadigm7093.6%40.4%82.7%35.8%95.2%39.7%73.7%31.8%73.7%31.8%Totals93.3%93.3%85.9%85.9%96.7%96.7%77.4%77.4%77.4%77.4%ASSEMBLY Department OEETo calculate the OEE for the Assembly department, again, we use the same process as in the previous examples.Note that we have kept the weighted factors relative to the TOTALS for ALL parts in the first OEE summary table.MachinePart NumberAssembly DepartmentCalculate Total Times for all parts manufactured in the assembly area.Production Time Report (Minutes)QuantityCalculated Times (Minutes)Planned Production TimePlanned Rest Periods (Breaks)Unplanned DowntimeTotalProducedScrapNAT - Net AvailableNOT - Net OperatingIOT - Ideal OperatingLOT - Lost OperatingVAT - Value AddedBB456AssemblyACME45480251845025455.0437.0337.518.8318.8CC789AssemblyParadigm70360152222911345.0323.0267.212.8254.3Totals840404067936800.0760.0604.731.6573.1MachinePart NumberAssembly DepartmentAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4BB456AssemblyACME4596.0%34.8%77.2%28.5%94.4%32.6%70.1%25.4%70.1%25.4%CC789AssemblyParadigm7093.6%25.7%82.7%22.6%95.2%26.0%73.7%20.3%73.7%20.3%Totals95.0%60.6%79.6%51.1%94.8%58.6%71.6%45.7%71.6%45.7%MachinePart NumberAssembly DepartmentAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)OEE (VAT / NAT)ProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4ProcessWeighted 4BB456AssemblyACME4596.0%54.6%77.2%44.4%94.4%52.7%70.1%39.8%70.1%39.8%CC789AssemblyParadigm7093.6%40.4%82.7%35.2%95.2%42.1%73.7%31.8%73.7%31.8%Totals95.0%95.0%79.6%79.6%94.8%94.8%71.6%71.6%71.6%71.6%How do we determine which operation to work on? Based on the Assembly department above, it appears that Process B needs improvement in both performance and quality to improve the overall OEE.While there may be no "right" answer, we affirm that the opportunity to pursue is the one that will have the greatest impact to the bottom line.THE Cost FACTORS:Refer to the "OEE Documentation" Tab for a more detailed presentation using actual cost data.Availability:Availability will have a direct and indirect impact on both Labour and Burden. It could be argued that if a machine is down for an extended period of time, the direct labour could be redeployed to run another machine or work center. While this makes for a good business case, it also implies that the direct labour will be redeployed to run parts that weren't required to begin with. This isn't exactly Lean Thinking. Also, depending on the length of time that the machine is down, overtime costs may be incurred to make up for lost production.The point is that when a machine goes down, there is a price to be paid. The real question is, "How much?"Performance:Performance has a direct impact on the Labour and to some degree the burden costs of the operation. Again, this will depend on the net effect of the performance loss. If the loss is significant enough to drive your plant into working overtime, then there will be increased labour and burden costs.Quality:Quality impacts all three costs being considered. Material, Labour, and Burden are all lost when a part is scrapped. In addition to these process costs, there are the administrative and other handling costs associated with the scrapped materials. Even if the material is reworked, typically the only cost recovered is material. Reworking product also introduces new administrative and handling costs associated with the rework process. New burden costs not normally incurred in the original process are also introduced when repairing product.Sorting, Repair, or any other type of containment activitiy will result in NON-VALUE ADDED Costs. These costs should be part of the consideration when determining process improvements.MachinePart NumberDepartmentCustomerCycle TimeSecondsAvailability (NOT / NAT)Performance (IOT / NOT)Quality (VAT / IOT)OEE (A * P * Q)MaterialLabourOverheadProcessWeighted 1ProcessWeighted 2ProcessWeighted 3ProcessWeighted 4AA123WeldParadigm1093.0%33.7%88.3%31.6%97.8%37.3%80.2%29.1%BB456AssemblyACME4596.0%34.8%77.2%28.5%94.4%32.6%70.1%25.4%CC789AssemblyParadigm7093.6%25.7%82.7%22.6%95.2%26.0%73.7%20.3%Totals94.3%94.3%82.7%82.7%95.9%95.9%74.7%74.7%

OEE DocumentationOverall Equipment Effectiveness (O.E.E.)OEE is to be tracked for each major cell for every shift of production.OEEhttp://www.leanexecution.wordpress.comOverall Equipment Effectiveness is the measure of Productive Time / Planned Production TimeVergence Business Associates - Manufacturing ConsultantsIn other words, it is the measure of VALUE ADDED Time / Planned Production TimeRedge Semplonius - President & CEOToronto, Ontario, CanadaOverall OEE =Total Time To Make a Quallity Part @ StandardLean Execution Advanced Strategy TeamTotal Planned Production TimeProviding Solutions in Real Time for Real ResultsFocus For SuccessDefinitions:Lean Manufacturing, Six Sigma, Quality Systems (TS-16949, ISO9001)OEE - Overall Equipment Efficiency = Performance * Availability * Quality-World Class = 85%Availability:90.0%DOWNTIME LOSS - Breakdowns, StockoutsPerformance:95.0%SPEED LOSS - Cycle Time EfficiencyQuality (FTT):99.5%YIELD LOSS - Scrap, Rework, ContainmentOEE85.1%Performance-Cycle Time (Standard Labor)-Stampings - Actual Strokes per Minute-Assembly - Button to Button Cycle Time - NO Efficiency Factors Added-Standard Labor-Headcount of personnel required to staff each operation with no sort, rework, or containment-Acceptable = Rework included in Standard Process only or Customer mandated Product LaunchAvailabilityTotal Available Time-Gross Available Time = Actual SCHEDULED Time, Maximum 1 Shift480minutes-Planned DowntimeFrequencyTimeTotals-Breaks (10 minutes x 2)21020-Lunch (20 minutes x 1)12020-Clean Up (5 minutes x 1)155-Planned Downtime45-Net Available Time = Total Available Time - Planned Downtime435minutes-Unplanned Downtime-Changeover (Dies / Tools)-Breakdown-Tip Changes-Coil Changes-Material Handling-Any Other Unscheduled EventsQuality (FTT)-Parts Scrapped-Weld Destruct-Coil Ends-Rework on the Line-Containment-0% is automatically assumed for any product subject to:-Online or 3rd party containment-Rework that is not part of the standard processCalculating OEE-OEE = Performance % X Availability % X Quality %Note: Quantities of parts are a measure of TIME. Quantity X Cycle Time = Time Required to Produce PartsWeighted Average versus Straight Average-The weighted average will be used to calculate shift performance.Weighted/Straight Average Calculation ExampleStationNet Available TimeOEECell 115060Cell 210070Cell 36065Cell 415030Cell 52595Arithmetic Average:64Straight Average = 60+70+65+30+95/ 5 = 320 = 64% OEEWeighted Average :Net Available TimeOEE(NAT*OEE) /(Total Available)WeightedAverage15060(9000/485)18.610070(7000/485)14.46065(3900/485)8.015030(4500/485)9.32595(2375/485)4.948555.2% OEEConclusion: Arithmetic Average = 64% OEE, Weighted Average = 55% OEETotal Equipment Effectivenss Performance-TEEP = Asset Availability / Net Time Available * OEEThis provides a measure of how well the assets are being utilized in the plant or facility.-Weighted OEE factors for PERFORMANCE, AVAILABILITY, and QUALITYOEE = Productive Time / Planned Production TimeOEE % =Net VALUE ADDED Operating Time @ StandardPlanned Operating Time or Net Available TimeProductive Time ONLY occurs when a quality part is produced at rate. (Time to make parts that can be sold or used in subsequent processes).From the example below, the overall weighted OEE = (Total Time to Produce A Quality Part @ Standard) / (Total Planned Production Time)Although alternative methods are presented to calculate the weighted values for the OEE factors, all resolve back to the same fundamental formulas.OEE Measures how effectively the time for a piece of equipment or process is utilized. Be cognizant of processes that yield more than 1 part per machine cycle.Although Quality (FTT) appears to measure quality based on Quantity of parts, this is directly correlated to the TIME required to produce the parts.-EXAMPLE: (Working Model) Data input fields are indicated by the TAN BackgroundPartStandard Cycle Time(Seconds)Total PartsScrapTotal GoodScheduled Production Time(Maximum 1 Shift = 480 minutes)Planned Down Time(Minutes)A752901028048040B75150015024015C1512500125048040D17.510001000024015E152500500048040Total3190151016801. Parts D & E are ON CONTAINMENT = All Parts Scrapped-AVAILABILITYAVAILABILITY(Time Available to Produce Parts)Availability %PartNet Available Time

Total Available Time - Planned Down Time(Planned Production Time)

(Minutes)UnplannedDown Time

(Minutes)Actual Operating Time

(Net Operating Time Actual)(Minutes)Availability - (1&2)%

Actual Operating TimePlanned TimeAvailability Weighted%

Availability % * Planned TimeTotal Planned TimeA4401043097.73%24.29%B2253019586.67%11.02%C4402042095.45%23.73%D12259213359.11%7.51%E1440543598.86%24.58%Total1770157161391.13%91.13%Availability =91.13%-PERFORMANCEPerformance % =Actual Rate (pcs / hr)Standard Rate (pcs / hr)ORStandard Cycle TimeActual Cycle TimePerformance(Time to Produce ALL Parts @ Standard)Performance %PartActual Cycle Time

Actual Operating Time * 60Total Parts Produced

(Seconds)Gross Operating Time@ Standard

(Time to Produce Total Parts@ Standard Cycle)

(Minutes)Performance (1)%

Gross Operating TimeActual Operating TimePerformance (2)(%)

Standard Cycle Time Actual Cycle TimePerformance Weighted%

Performance % * Actual Operating TimeTotal Actual Operating TimeA88.97362.584.30%84.30%22.47%B78.0018896.15%96.15%11.62%C20.1631374.40%74.40%19.37%D17.9812593.98%93.98%7.75%E152.2043399.62%99.62%26.87%Total142188.09%88.09%88.09%Performance = 88.09%QualityTime to Produce Quality Parts @ StandardQuality %PartNet Operating Time@ Standard

(Time to Produce Quality Parts@ Standard Cycle)

(Minutes)Quality (1)%

Net Operating TimeGross Operating TimeQuality (2)(%)

Good PartsTotal PartsQuality Weighted%

Planned Operating Time * A% * P%Total Planned Operating Time * TA% * TP%Quality Weighted%

Gross Operating Time @ StandardTotal Gross Operating Time @ StandardA350.096.55%96.55%24.63%24.63%B187.5100.00%100.00%13.20%13.20%C312.5100.00%100.00%21.99%21.99%D10.00.00%0.00%0.00%0.00%E10.00.00%0.00%0.00%0.00%Total850.059.82%59.82%59.82%Quality = 59.82%PartOEE %AOEE (1)%

A * P * QOEE (2)%

A * P * QWeighted OEE

OEE % * Planned TimeTotal Planned TimeB79.55%79.5%19.77%C83.33%83.3%10.59%D171.02%71.0%17.66%E10.00%0.0%0.00%Total0.00%0.0%0.00%48.02%48.02%48.02%48.02%Total Net (VALUE ADDED) Time / Total Planned = 48.02%Using OEE to Manage ChangeGeneral:Understanding OEE and it's related factors, is key to managing "process" changes.While OEE determines how efficiently time is being used by a particular machine or across the entire plant - it doesn't measure the TOTAL cost of inefficiencies!Availability: DOWNTIME LOSSPerformance: SPEED LOSS (Cycle Time Inefficiency)Quality: YIELD LOSSLabour Variance:OEE can be used to measure Labour Variances: Availability X PerformanceAvailability: Time lost due to inability to produce parts.Performance: Time lost (for all parts) due to cycle time inefficiencyDirect Labour Impact:When deciding which process to address first, consider the total direct labour required to run it.Two processes running at the same overall OEE may have considerable cost implications (differences).Material Variance:Quality: Material lost due to scrap parts, coil endsWhen deciding which process to address first, consider the cost of material required to make the parts.Two process running at the same overall OEE and Quality may have significant differences with respect to cost impact.Salvage / Recovery revenue should also be considered in the overall part assessment.Learn to appreciate the difference in value of materials. Example: Gold and Silver.Burden Variance:Availability: Unexpected machine repairs, replacement partsPerformance: Equipment repairs required to address machines running at reduced speeds due to wear and tear.Quality: Rework, Containment, Inspection, Material Handling support.VOLUME:The effect of volume should be clear as the cost differences will vary accordingly.EXAMPLE of Cost Implications: NOTE That the OEE is the SAME for both processes.ProcessDirect Labour$27.20APQA8$217.6095%90%70%B2$54.4095%90%70%Direct Labour Cost - Variance CalculationsDirect Labour is Redeployed while machine is downProcessPDirect Labour Cost for Net Quantity Required (Performance)Labour VarianceA90%$241.78$24.18B90%$60.44$6.04Direct Labour Cannot be redeployed while machine is downProcessA * PDirect Labour Cost for Net Quantity Required (Performance)Labour VarianceA86%$254.50$36.90B86%$63.63$9.23Material Cost - Variance CalculationsProcessQStandard Material CostActual CostMaterial VarianceA70%$0.25$0.36$0.11B70%$150.00$214.29$64.29RECOVERY / SALVAGE CostsScrap material may be sold and as a result could return revenue to offset the overall cost impact.Putting it ALL Together: From the example above:ProcessVariancesSalvageLabourMaterialTotalA$24.18$0.11$24.28$0.02B$6.04$64.29$70.33$9.64A - B$18.13$(64.18)$(46.05)$(9.63)EFFECT of VolumeProcessAnnual VolumeTotal Cost Impact due to VariancesRecoveryNet Impact (Recovery)A170,000$4,128,436.51$2,732.14$4,125,704.37B50,000$3,516,507.94$482,142.86$3,034,365.08A - B120,000$611,928.57$(479,410.71)$1,091,339.29In this example, it is clear that while the labour cost for process A presents a cause for concern and should be addressed before looking at Process B, the material cost variance presents a much greater opportunity for process B.Putting it all together, based on Volume, the real process to focus on is Process A.Making it Happen - NEXT StepsEstablish Clear Standards - Material, Cycle Time, LabourQuick Die ChangeInventory Management Initiatives: Min-Max Targets, Inventory Turns, PULLQuality: Scrap, Rework, ContainmentProcess Cycle Efficiency (Lean Metric)Value-Added Time / Total Lead TimeTotal Equipment Effectiveness (Performance)-Definition:Measures how well assets in the plant are being utilized in an area or total plant. This is typically based on a 24 hour day, 7 days / week, 365 day base line.For a shift the TEEP will be based on a full 8 hour day (480 minutes).TEEPTotal Net Available Time * OEETotal Available Asset TimeORTotal Net Value Added TimeTotal Available Asset TimeIt is possible for OEE to show continued improvement, however, equipment utilization is affected by volume and product mix based on customer demand.The weighted OEE does not provide an indicator of how effectively the equipment is being utilized. Consider 1 High performance job running in 1 of 2 machines versus 2 Lower performance jobs running in 2 of 2 machines.Example: Shift ComparisonsExtreme caution should be exercised when comparing the OEE between two shifts, production areas, or plants based on overall performance unless they present the same "product / process" mix. In the example below, Shift A has a higher weighted OEE when compared to Shift B although there is real no difference between them. When considering the TEEP, Shift B actually outperforms shift A by a large margin because more asset capacity was used to make parts. When comparing line item processes, both ran equally well.SHIFT APart / ProcessOEE %Available Asset TimeNet Available TimeWeighted OEETEEP (Asset Utilization %)Weighted TEEPNet Available Time * OEETOTAL Net Available TimeNet Available Time * OEEAvailable Asset TimeNet Available Time * OEETOTAL Available Asset TimeA90%48044090%83%28%B85%48000%0%0%C80%48000%0%0%TEEPWeighted OEE usedfor Overall TEEP144044090%28%28%Shift BPart / ProcessOEE %Available Asset TimeNet Available TimeWeighted OEETEEP (Asset Utilization %)Weighted TEEPNet Available Time * OEETOTAL Net Available TimeNet Available Time * OEEAvailable Asset TimeNet Available Time * OEETOTAL Available Asset TimeA90%48044030%83%28%B85%48044028%78%26%C80%48044027%73%24%TEEPWeighted OEE usedfor Overall TEEP1440132085%78%78%-TEEP SummaryImproved OEE performance will yield a lower TEEP as more capacity is made available. The objective then becomes filling this available capacity.

&L&"Arial,Bold" Confidential&C&A&D / &T&RPage &PRefer to Notes for Unplanned Downtime event details.Actual Operating Time = Net Available Time - Unplanned Down TimeTotal Actual Operating TimeTotal Net Available TimeGross Operating Time = (Standard Cycle Time / 60) X Total Parts Made

Note: Unit of Measure = MinutesTotal Operating Time to Produce Total Parts @ StandardTotal Actual Operating Time(Cycle Time @ Standard / 60) X Good Parts MadeTotal Time to Produce Quality Parts @ StandardTotal Time to Produce Total Parts @ StandardNet Operating Time @ StandardTotal Net Available TimeTEEP (Asset Utilization %):

Total Net Available Time * WEIGHTED OEETotal Available Asset TimeTEEP (Asset Utilization %):

Total Net Available Time * WEIGHTED OEETotal Available Asset Timehttp://www.leanexecution.wordpress.com

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