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Commentary & Analysis

Measuring Efficiency with Overall Equipment Effectiveness

Overall Equipment Effectiveness (OEE) can be used to both measure your production efficiency, as well as use it as a tool for making equipment purchasing decision.

By John Zarwan
Published: June 6, 2017

With increasing pressure on margins, and the on-going need to continue to invest in new technology and capabilities, running an efficient operation is even more critical to the success and health of any printing business. Packaging Converters and Commercial printers have always tried to utilize their equipment as much as possible and are well aware of their capacity utilization, which is typically measured as the number of hours a press is operating.

But this is really only part of the story. Plants can be more efficient and equipment can be utilized more effectively. Effectiveness is the relationship between the maximum that can theoretically be produced and what is actually accomplished. Overall Equipment Effectiveness (OEE) is a useful tool to measure and improve operations. Although the concept is more than 50 years old, and in the last twenty years it has become widely used in other industries, one increasingly hears printers and their suppliers talk about OEE.

OEE is as simple and useful as it is elegant. It is a performance indicator that combines three key production elements—equipment availability, performance, and quality—into a single number. It measures the time equipment is fully productive. It can be expressed as the product of three percentages:

OEE= Availability × Performance × Quality

As a rule of thumb, a perfect score is 100%. Anything over 70% is very good, as it means more than 90% in each measure; most businesses are in the 50% to 60% range.

Let’s take a closer look at each of the components.

  • Availability is really just downtime, anytime a press isn’t printing. This can be planned (regular maintenance) or unplanned (equipment failure). It also includes set-up and changeovers. For example, offset and flexo presses require plate mounting before and wash-up after. The faster this can be achieved, the more time the press is printing.
  • Performance is a measure of speed that excludes losses from quality or availability. It can be caused by small stops or slow cycles. A press might be rated for 18,000 sheets per hour or 130 pages a minute but cannot practically achieve that. Presses take time to come up to speed. Digital presses can jam or run more slowly with heavier stock.
  • Quality is the yield—how many saleable pieces were produced? What is the waste? This could come from make-ready waste or production rejects due to defects.

OEE is thus a function both of the equipment as well as work flow and operating efficiency. It can be used to understand how well you’re performing, identify and eliminate constraints, and look for areas of improvement.

It is important to remember that OEE is not an absolute measure. If you produce a lot of short runs, with a lot of change-overs, your OEE will be lower than a high volume operation. Similarly, performance and quality aren’t always independent. You might run a press at 300 fpm even though it can operate at 500 fpm in order to have better quality control and insure less waste. Moreover, as it is the product of three variables, it punishes variability. For example, 10% x 90% = 9%, while 50% x 50% = 25%. So if the cost of an error is high, then higher quality may be far more important than performance or availability.

OEE is useful as both a benchmark and a baseline. It can be used to compare performance of a comparable press to industry standards, or different production lines within a facility, or to different shifts using the same press. Even more useful, it can be used to track progress in eliminating waste and improving effectiveness and its components. OEE is best used as a way of measuring improvement, of identifying and changing the processes that cause the number to change, rather than a performance indicator.

Of course OEE doesn’t really indicate if your equipment is out-of-date or needs to be updated (except if it’s not possible to be more productive or improve quality) or if it meets the needs of your customers. But it does provide a simple and powerful tool that helps the production team identify and eliminate equipment losses and waste.

Future articles will focus on different types of presses and ways to improve performance of each.

John Zarwan is a consultant known for his insight and knowledge of industry trends.  He is currently working with a number of packaging and commercial printers to measure and improve their Overall Equipment Effectiveness.

 

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Label & Packaging Section

Jennifer Matt

David Zwang, Editor/Analyst
David travels the globe helping companies increase their productivity, margins and market reach.

 

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