I - Cost of Sales: Specific points
3. WCM procedure to calculate OEE
OEE = Overall Equipment Effectiveness ... see more on Internet
WCM = World Class Manufacturing ... see more on Internet
The objective of OEE is to measure technical performance and the level of utilisation of production capacity and as a result measure the efficiency with which an asset is used to create value. This indicator makes it possible to examine all causes of production losses, whatever their source.
The OEE is the ratio of good production (products of the specified quality) to the maximum production that could have been achieved during the same period.
- The maximum production represents the bottleneck.
- The total time is based on 365 days.
- It breaks down into the sum of availability, performance and quality (or compliance) rates. This is a global indicator that takes in account both quality and the period of time the technical performance is to be used. The performance rate is determined relative to the Maximum Daily Capacity (MDC), expressing all losses in terms of “time” or “capacity”.
- The MDC for a single product can be calculated and observed
- Continuous production: where the output is constant over time, the MDC is thus the best production achieved in a 24-hour period.
- Semi-continuous production: where the output is variable over a period of N days (between shutdowns to change the catalyst, between washes…), the MDC is also the best production achieved in a 24-hour period.
- Production batch: average production in the best 3 consecutive batches while respecting standard operating procedures, adjusted to a 24-hour period.
- The MDC for multiple products can be calculated and observed
- Sum of the proportional portions of the MDC of each single product. The proportional portion is that part of the day (theoretical time) allocated to the production of each single product.
- For example: 8/24 for product A, 10/24 for product B, 6/24 for product C. The MDC of the A-B-C mix is equal to: MDC (A)*8/24 + MDC (B)*10/24 + MDC(C)*6/24.
Calculation
where:
3 Categories | The 6 causes of a production shortage | Quantity | Time |
Availability | 1. External causes of shutdowns: lack of sales / supplies (materials, energy), force majeure, machinery not available for production (1, 2 or 3 teams, 5 or 7 days, manufacturing schedule of 220, 320 or 365 days) | Q1 | t1 |
2. Planned maintenance and annual shutdowns | Q2 | t2 | |
3. Inter-campaigns | Q3 | t3 | |
4. Breakdowns | Q4 | t4 | |
Performance | 5. Process / Operations | Q5 | t5 |
Quality | 6. Quality: rejects, or products that cannot be sold without rework or recycling | Q6 | t6 |
The inter-campaign transition time is included in the cycle time and is therefore not included as an OEE loss. If this inter-campaign time is longer than expected, the difference should be posted to the process / operations category.
Includes loss of speed due to the activity of the catalysts, problems, obsolescence for the semi-continuous production.
Seconds with an identified market are not considered to be production losses. If rework is necessary, then it is an OEE quality loss.
This is equivalent to:
See graph in HERE.
Net OEE is OEE excluding cause 1 (lack of sales / supplies, ...)
OEE can be broken down into three factors:
OEE = AVAILABILITY x PERFORMANCE x QUALITY x 100%
where:
The OEE is calculated monthly per item of equipment.