Cooked up OEE formula is a bad idea

Cooked up OEE formula – why it’s a bad idea

Cooked up OEE formula – the recipes and tastes

In devising an OEE formula, it is important that you are truthful about losses like downtimes, rejections and rework. OEE is not a number that you flaunt to others. It is a mirror that helps you evaluate and improve the performance of your shop. It is a number that you constantly strive to improve, not a number that you achieve and then sit back and relax. This is why a cooked up OEE formula makes no sense.

Cooked up OEE formula is a bad idea
Cooked up OEE calculation – a bad idea

A lot of firms consider most downtimes as part of the process, and NOT as downtimes. E.g., part unloading / loading, inspection, setup change. This flies against the logic of the use of OEE calculation. It artificially inflates the OEE number, but is counterproductive.

Availability is defined as = Run time / Planned production time.
Run time = Planned production time – Downtime.
Downtime is the time when the process was supposed to be running but did not run. This includes part unloading and loading, inspection, setup changes, breakdowns, etc.

Here’s why you must consider ALL downtimes as downtimes
I can get an artificially high Availability of 95 % by excluding some down times, and making the numerator in the Availability equation go up. However, if I do this, I’ll just assume that there is very little further improvement possible, and just sit back and relax. Let’s say the setup time for a part on a CNC lathe is 2 hours. If I do not consider this as downtime, this setup time is going to remain constant for years together. If I do consider it as downtime, I’ll keep on trying to reduce it, by using quick change tooling, automatic tool presetter, etc. Similarly for other downtimes. The fact is that there are a huge variety of OEE formulae for calculating A,P, Q and OEE. Each firm defines its own cooking formula, and does the OEE calculation to get OEE numbers to suit its own taste.

Cooked up OEE formula – examples

The formula of OEE calculation can devised in various ways to cook up good looking OEE numbers. Here are some recipes, and what each dish tastes like.

Cooking up OEE formula - recipes
Recipes for cooking up OEE formula
OEE Recipe 1

In the Availability part of the formula for OEE calculation, do not consider setup change times as downtime, because “How can you consider this a downtime ? After one batch of parts is done, you have to do a setup change and it takes time, right ? So it’s actually part of the cycle”. The taste: Maybe you can reduce a 2 hour setup time to 15 minutes by the use of quick change tooling, or by using a tool presetter, or by work and tool offset probes. You’ll never do this, because you have hidden this downtime waste forever and will never know that it exists.

OEE Recipe 2

In the Performance part of the formula for calculation of OEE, make the part change time a part of the cycle time, because “How can you consider this a downtime ? You have to unload the completed part and load a new part, right ? So it’s actually part of the cycle”. The taste: Maybe you can reduce the part change time by using a pallet changer, or with better and faster clamps on the fixture, a better and faster crane, or a robot. You’ll never do this, because you have hidden this manufacturing downtime waste forever and will never know that it exists.

OEE Recipe 3

In the Availability part of the formula for OEE calculation, do not consider chip cleaning, insert changing and part inspection times as downtime, because “All these are part of the process. They are not downtimes.” The taste: Maybe you can eliminate the chip cleaning time by using better chip breaker geometry and cutting parameters, reduce the frequency of insert changes by using an insert with a better life. Maybe you can speed up the inspection or reduce its frequency. You’ll never do this, again because you have hidden these downtime wastes in manufacturing forever and will never know that they exist.

As you can see, the taste in all these recipes is uniformly bad. These are only some examples of bad practices in the OEE formula. There really is no point in hiding downtimes to inflate OEE numbers. This comes from an obsession with the absolute value of the OEE. Instead, use it as a measure of productivity that needs to be improved. Set a target for periodic improvement, not an absolute value. Just let ALL the downtimes be visible, out there, so that you will keep reducing them and never forget them.

This is the key tenet of LEAN – be honest about your wastes. Do not hide them.


My (almost) daily encounter with lotus flowers

A few streets away from my home is a footpath shop selling lotus flowers, that I pass every day on my way to work. The shop only has lotus flowers and nothing else, they’re always the same colour, and they seem to get sold out by the evening.

Calculation of OEE - 1

The lotus happens to be the national flower of India, and for good reason – it is a stunning looking flower. It also has some peculiar qualities that very few other plant species have. The lotus has the ability to control the temperature of its flowers between 30 and 35 degrees C even though the ambient temperature may be higher or lower, just as humans and other warm blooded animals do. Scientists think this is for attracting insects for pollination. The flowers are hermaphrodite (have both male and female organs) and are pollinated by insects. The flowers and leaves are water-repellent, and exhibit something called the ‘lotus effect’. They never get wet, and water droplets roll off them like balls of mercury, washing away all dirt.

Lotus flowers in pond
Lotus stem

The roots of the plant are inside the soil at the bottom of the pond, and the leaves float on the surface. The stem has holes that run right through, providing a pathway for air from above the water surface to reach the underwater parts. Dried lotus seeds (Makhana in Hindi, Fox nut or Gorgon nut in English) are a great snack, lightly roasted with some salt and a couple of spices. The lotus stem (Kamal Kakdi in Hindi) too is eaten in many parts of the world. In India it is made into sambar, sabzi and pickle.

lot1 (1)

All in all, a remarkable plant !

lot2 (1)
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