First of all what does it mean? It means that before talking about Industry 4.0, we should see if the basis of our company is able to deal with implementing something that can really be referred to as Industry 4.0.

It’s like saying you want to win a race by driving a Ferrari, but without having taken particular lessons on the track, without ever having driven a sports car.
But now let’s leave the metaphors and go straight to the point.

Before talking about the Internet of Things, about vertical and horizontal integration of the systems, before talking about the Cloud, etc … let’s ask ourselves a question: do I really have the production efficiency under control? Can I activate continuous improvement processes? Based on what data do I decide on what to intervene? What are the critical points of my production plant?

If I don’t have the clear answers to these questions, let’s forget about Industry 4.0 for a while and just think about getting all this information. Once this is done, Industry 4.0 will really seem less distant to us.

The software tool that should not be missing in every company, especially those that deal with production, is a complete OEE calculation that can also supply not only numbers, but reasons and data representing the basis of certain decisions.


KPI monitoring: the OEE

  • Benefits of OEE:
  • Provides a picture of the actual production situation.
  • Highlights the causes of waste
  • Highlights where wastes occur most often and therefore where action is needed in order to improve efficiency
  • It represents a valid support tool for decision makers

The OEE can be divided into three main steps:

  1. Machine availability monitoring (stops)
  2. Process performances monitoring (speed)
  3. Quality monitoring (waste)


Monitoring of stops

The data that can be obtained from this type of monitoring is completely objective.
First of all, a defined timeline is taken into consideration: short or medium interval.
The time dedicated to the scheduled stops is subtracted from this defined time (for example the meal breaks). The resulting time is entirely considered available for production: any other event that causes a machine shutdown is counted as a stop, which is also configured.
IMPROVE has three possibilities to capture stops:

  1. The machine communicates directly the beginning of the stop, the end of the stop and the cause
  2. The machine communicates directly the beginning and the end of the stop. The cause is determined by the operator.
  3. The operator communicates the beginning of the stop, the end of the stop and the cause.

In the end, everything is summarized through a Pareto chart.

The frequent problems of stops describe a problem that concerns the maintenance of the machines: therefore it is necessary to implement CIL.


Process performances monitoring

This type of monitoring is more difficult to manage and answers the question: “How am I performing when I can work?

Once again, we find ourselves working in a defined timeline.

In order to calculate this time segment, both the scheduled and the unscheduled stops must be subtracted.

The data that must be taken into consideration, (and is acquired from the machine) is the number of pieces produced.

The pieces produced are compared with the pieces provided through the takt time (cycle time). Takt time is a non-objective element: this is the source of the difficulty in managing this type of monitoring.

There are two types of takt time:

  • The standard takt time: defined by the management
  • The ideal takt time: defined by speculating the perfect functioning of the process.

The ideal takt time should be used for a truly correct OEE calculation (generally 15% lower than the standard takt time).

Since the value of the OEE is an asymptotic value, i.e. it tends to get closer and closer to 100% without ever reaching it, and it follows that the ideal value of takt time becomes an objective.

The process performance value is the result of the following formula:

(no. of pieces produced * takt time)/actual production time

Understanding the reasons for the 100% failure may also be complicated.

The system we have implemented provides for the consideration of lost pieces, thus going to aggregate the pieces lost with the cause: in this way we can objectively know the causes of the delay.

So, for example, every hour the operator will be required to enter the cause of the failed production of the number of pieces.
This objectification allows us then to generate a Pareto chart again


Quality monitoring

This type of monitoring is easy to objectify.

Based on this type of monitoring we can obtain the number of pieces that were not considered to be compliant and to define the reasons.

In an ideal situation, the OEE value of this type of monitoring is obtained by the following formula:

(no. of pieces produced – no. of discarded pieces)/no. of pieces produced

Once you define this situation, you need to understand where the losses are.


Loss identification

The following formulas can be used to find the losses in those three phases:

  • Loss of machine availability (stops) = 1-Availability yield
  • Loss of process performance = Availability yield * (1-Performance yield)
  • Quality loss = Quality yield*(Availability yield*Performance yield*(1-Quality yield))

It goes without saying that the sum of the value of the OEE plus the values of these losses must return a value of 100%


The OEE: in-depth analysis

When we talk about OEE, we are essentially talking about three elements:

  1. The registry
    • the structure (hierarchical) of production (company, plant, department, sub-department, lines);
      the reasons: downtimes, delays, non-compliance
    • The Products: these, together with the lines give us the takt time
    • Production Order
  2. Real time management: what’s happening now? This moment is divided into three elements, two line elements and one outside the line:


Touch operator panel

Touch operator panel

 The touch panel (line element): the operator panel allows us to change the Production Order; to transfer the information to the management system; to collect information on what I am producing, the causes of the production status (why am I stopped?) Why is there a waste? Why am I in setup?


Andon board

Andon board

The Andon board (line element): shows the production performance in real time, while you are online. What does it display? Pieces produced, those expected, the residuals of the production order, the waste, the performances in the form of indicators, the time bar (which highlights how the brake and production moments have developed over time). The board must be visible even from a distance. The graphic can be customized.

Aggregate display of line status

Aggregate display of line status

 The aggregate display of the line status by department, in real time (element outside the): each square informs about the status of a line. This display can be accessed by department and/or maintenance and/or quality managers. The immediately visible information is performance, downtime and quality. The display of these data is brief and immediate in such a way as to allow a sudden intervention by the manager. This element is particularly useful because it allows you to become aware of problems, without going online and to immediately analyze specific problems: the maintenance manager immediately notices that the machine is stopped; the quality manager immediately becomes aware of the waste in real time; the production manager notices a lower number of pieces than those expected.


3. Short and medium interval OEE analysis. Detailed analysis of what happened and why, to enable the continuous improvement processes. The analysis can take place on the day, or on the current month. IMPROVE can calculate OEE for timelines that we can freely establish.

This page displays:

  • The OEE
  • The Pareto chart of stops and non-compliances (the Pareto chart of delays will also appear shortly)
  • Possibility to see the OEE analysis in tabular format, exportable in excel
  • The OEE stratification: further stratification of the causes of losses, based on some standard items of the WCM. In this way, for example, it is possible to distinguish the stop causes due to setup, from those due to other causes (minor stops, downtime, etc.). Strategic tool to understand where to intervene to improve process productivity.
  • Production: a table in which it is possible to see all the production orders, the planned takt times and those actually detected, the planned and actually detected setup time, the pieces produced, the pieces expected, the non-compliances, the planned and effective duration of the production. All information easily expressed into costs.
  • It is possible to trace the entire hierarchy of the business structure present in the registry, aggregating the data by lines, departments, plants… and even by corporations. Data can be aggregated for specific production areas, product sector or geographical area.All in all, the company has a complete after the fact evaluation of everything that has happened: KPI, Pareto analysis and the minimum details of each movement. All this at various levels: from the single line, to the department, to the plant and beyond.

Ultimately, the OEE is an essential tool in 2018. It provides strategic tools that everyone must absolutely possess: it is perfectly useless to talk about Big data, if we are not able to capture, monitor and aggregate the minimum information that represents the basis of continuous improvement.

Hoping we have kept you interested, we would like to discuss these topics with you. You can do this by following us on Linkedin or here, on our Smart Factory Blog!


Ascoltando: Pink Floyd – “Confortably numb
Lettura in corso: “Una storia semplice” by Leonardo Sciascia
Mood: Analytical


Digital strategist

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