All Member Open Forum

Hi Everyone, 

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Hi Jesus, how are you?

There is a couple of things to check in the operational context to answer the question.

1. Are those external reasons unplanned?
2. Are those external reasons in a process upstream or downstream from the measured process or equipment?
3. Are those external reasons within the measured process or equipment?
4. Is the OEE measured at equipment, process, or line level?

To put it simply. Let's suppose we have a series process A-B-C, with 100% availability and quality =)

If the best or design capacities of A and C processes are 10. But the B process is restricted to 8 due to an external steam flow restriction coming from the utilities; the OEE would be as follows:

OEE Process A = 80% due to bottleneck on the downstream process. 

OEE Process B = 80% due to external restriction on steam flow.

OEE Process C = 80% due to the upstream process restriction.

OEE Process A-B-C = 80% x 80% x 80% = 51%

I suggest looking at the process flow diagram and check the depth level for the OEE measurement. Then you can apply the same approach used for system reliability for equipment in series, parallel or partial redundancy, etcetera if necessary.

Let me know if you have any questions or need a quick chat.
Best,


------------------------------
Daniel Rojas
Guelph ON
------------------------------

Original Message:
Sent: 12-12-2022 10:20 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Hi Daniel, thanks for your reply, and I also take this oportunity to wishing you a happy new year. Answering your questions:

1. Yes, we can use unplanned external reasons.
2. Upstream.
3.  Yes it is.
4. Measured at process. Just an inlet / outlet stream without other process linked.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Original Message:
Sent: 12-13-2022 07:27 AM
From: Daniel Rojas
Subject: OEE Considerations

Hi Jesus, how are you?

There is a couple of things to check in the operational context to answer the question.

1. Are those external reasons unplanned?
2. Are those external reasons in a process upstream or downstream from the measured process or equipment?
3. Are those external reasons within the measured process or equipment?
4. Is the OEE measured at equipment, process, or line level?

To put it simply. Let's suppose we have a series process A-B-C, with 100% availability and quality =)

If the best or design capacities of A and C processes are 10. But the B process is restricted to 8 due to an external steam flow restriction coming from the utilities; the OEE would be as follows:

OEE Process A = 80% due to bottleneck on the downstream process.

OEE Process B = 80% due to external restriction on steam flow.

OEE Process C = 80% due to the upstream process restriction.

OEE Process A-B-C = 80% x 80% x 80% = 51%

I suggest looking at the process flow diagram and check the depth level for the OEE measurement. Then you can apply the same approach used for system reliability for equipment in series, parallel or partial redundancy, etcetera if necessary.

Let me know if you have any questions or need a quick chat.
Best,


------------------------------
Daniel Rojas
Guelph ON

Original Message:
Sent: 12-12-2022 10:20 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Hi Jesus, happy Friday! 

In a nutshell, the process performance is restricted to a rate of 6 due to an unplanned reason in an upstream process. The process design or best rate hasn't changed by any modification or re-design in the process, so I think you should use 10 in the denominator and explain the gap using the external reason.

Kind Regards,

------------------------------
Daniel Rojas
Postgraduate in Applied Manufacturing Management
Conestoga College
Guelph, ON. Canada
------------------------------

Original Message:
Sent: 01-05-2023 09:38 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Daniel, thanks for your reply, and I also take this oportunity to wishing you a happy new year. Answering your questions:

1. Yes, we can use unplanned external reasons.
2. Upstream.
3.  Yes it is.
4. Measured at process. Just an inlet / outlet stream without other process linked.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM

Original Message:
Sent: 12-13-2022 07:27 AM
From: Daniel Rojas
Subject: OEE Considerations

Hi Jesus, how are you?

There is a couple of things to check in the operational context to answer the question.

1. Are those external reasons unplanned?
2. Are those external reasons in a process upstream or downstream from the measured process or equipment?
3. Are those external reasons within the measured process or equipment?
4. Is the OEE measured at equipment, process, or line level?

To put it simply. Let's suppose we have a series process A-B-C, with 100% availability and quality =)

If the best or design capacities of A and C processes are 10. But the B process is restricted to 8 due to an external steam flow restriction coming from the utilities; the OEE would be as follows:

OEE Process A = 80% due to bottleneck on the downstream process.

OEE Process B = 80% due to external restriction on steam flow.

OEE Process C = 80% due to the upstream process restriction.

OEE Process A-B-C = 80% x 80% x 80% = 51%

I suggest looking at the process flow diagram and check the depth level for the OEE measurement. Then you can apply the same approach used for system reliability for equipment in series, parallel or partial redundancy, etcetera if necessary.

Let me know if you have any questions or need a quick chat.
Best,


------------------------------
Daniel Rojas
Guelph ON

Original Message:
Sent: 12-12-2022 10:20 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

I believe what you are referring to is asset utilization also called Total Equipment Effective Performance (TEEP).  This metric includes OEE and also considers losses for external reasons.  Ideally, the design rate is still used in the calculation, but the losses are attributed to external reasons thereby lowering asset utilization.  It is important to track lack of utilization even if it is out of your control to have a solid understanding of where the losses truly are.  To pull this out of your data, you may have to look at each part as a percentage.  Example as follows:

24 hr period > max production is 240 units
Availability = 100%
Performance = 100%
Quality = 100%
Utilization = 60%

OEE = A*P*Q = 100%, 
TEEP=OEE * Asset Utilization=60% or 144 units

------------------------------
Tanner Samuelson BSME, PE
Reliability Engineer
CHS Inc
Kennedy MN
------------------------------

Original Message:
Sent: 12-12-2022 10:20 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Hi Tanner, thanks for your explanation. The use of the TEEP could be a better alternative as you comment. But for this reason in particular, the external reason is only affecting the rate, not the availability. So then, taking this condition into account, the denominator used in the Performance calculation should be the design rate, or the adjusted rate due to the external reason?

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Original Message:
Sent: 12-13-2022 07:51 AM
From: Tanner Samuelson
Subject: OEE Considerations

I believe what you are referring to is asset utilization also called Total Equipment Effective Performance (TEEP).  This metric includes OEE and also considers losses for external reasons.  Ideally, the design rate is still used in the calculation, but the losses are attributed to external reasons thereby lowering asset utilization.  It is important to track lack of utilization even if it is out of your control to have a solid understanding of where the losses truly are.  To pull this out of your data, you may have to look at each part as a percentage.  Example as follows:

24 hr period > max production is 240 units
Availability = 100%
Performance = 100%
Quality = 100%
Utilization = 60%

OEE = A*P*Q = 100%,
TEEP=OEE * Asset Utilization=60% or 144 units

------------------------------
Tanner Samuelson BSME, PE
Reliability Engineer
CHS Inc
Kennedy MN

Original Message:
Sent: 12-12-2022 10:20 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Original Message:
Sent: 12/12/2022 10:21:00 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone, 

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Dear Jesus

When calculating key performance indicators (KPIs), it is important to use accurate and relevant data in order to obtain reliable results. In the case you describe, where external factors are limiting the production rate, it would be appropriate to use the actual production rate of 6 in your calculations. This will give a more accurate representation of the performance of your production process.

It is also worth considering whether the external factors that are limiting the production rate are within your control. If they are, it may be necessary to take steps to address the issue and improve the production rate. If they are not within your control, it may be necessary to adjust your KPI targets to account for the impact of these external factors.

Overall, the most important thing is to use accurate and relevant data in your KPI calculations, and to ensure that your KPIs are meaningful and actionable for your organization.

Regards,

---------------------------------
Hasan Putra BEng
Maintenance Planner and Scheduler
PT Paiton Operation and Maintenance Indonesia
---------------------------------



Original Message:
Sent: 12-13-2022
From: Ron Moore
Subject: RE: OEE Considerations

Jesus - 

 

The purpose of measuring OEE is to allow for, and focus on, managing the losses.  As such, and based on your brief description, I would continue to use 10 as my maximum, demonstrated, sustainable rate, given that it fits that description.  The difference of 4 represents a strategic opportunity for improving capacity with minimum additional capital, if you can bring the affected parties into a discussion about how to minimize those losses.  

 

I'm happy to discuss this if you like. 

 

Ron Moore

The RM Group, Inc. 

Knoxville, TN 

Original Message:
Sent: 12/12/2022 10:21:00 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone, 

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Hi Ron, thanks for your response. In this particular case, there is no strategic opportunity for improvement due to an uncontrollable external reason. Taking this into account, the denominator of the "performance" calculation should be the design rate or the rate adjusted to the maximum rate that can be produced due to this external factor?

Regards.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Original Message:
Sent: 12-13-2022 09:17 AM
From: Ron Moore
Subject: OEE Considerations

Jesus - 

 

The purpose of measuring OEE is to allow for, and focus on, managing the losses.  As such, and based on your brief description, I would continue to use 10 as my maximum, demonstrated, sustainable rate, given that it fits that description.  The difference of 4 represents a strategic opportunity for improving capacity with minimum additional capital, if you can bring the affected parties into a discussion about how to minimize those losses.  

 

I'm happy to discuss this if you like. 

 

Ron Moore

The RM Group, Inc. 

Knoxville, TN 

Original Message:
Sent: 12/12/2022 10:21:00 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------

Jesus,

It would be worth your time to discuss your situation with Ron Moore. Your statement about no strategic opportunity forces me to think that a different method(s) may be needed to look at this situation. Ron is very capable of "stretching" the way you look at these situations.

Just my 2 cents worth (or free advice)...

------------------------------
W. Wayne Vick, Jr. EE, CMRP, CRL, ARP-IIIX
President/CEO
Infralogix
Williamsburg VA
------------------------------

Original Message:
Sent: 01-05-2023 10:08 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Ron, thanks for your response. In this particular case, there is no strategic opportunity for improvement due to an uncontrollable external reason. Taking this into account, the denominator of the "performance" calculation should be the design rate or the rate adjusted to the maximum rate that can be produced due to this external factor?

Regards.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM

Original Message:
Sent: 12-13-2022 09:17 AM
From: Ron Moore
Subject: OEE Considerations

Jesus - 

 

The purpose of measuring OEE is to allow for, and focus on, managing the losses.  As such, and based on your brief description, I would continue to use 10 as my maximum, demonstrated, sustainable rate, given that it fits that description.  The difference of 4 represents a strategic opportunity for improving capacity with minimum additional capital, if you can bring the affected parties into a discussion about how to minimize those losses.  

 

I'm happy to discuss this if you like. 

 

Ron Moore

The RM Group, Inc. 

Knoxville, TN 

Original Message:
Sent: 12/12/2022 10:21:00 AM
From: Jesus Banda Dominguez
Subject: OEE Considerations

Hi Everyone,

I have some doubts about the considerations used for the KPI "Performance". The "Best Practices handbook"  says that we must use the "Best rate" or the "Design rate", the higher.
But in cases that for external reasons we must decrease the production rate, Do we still use the "Best or Design rate"? Or  Are we need to "justify" this losses due to external reasons?

For example, The design rate is 10, but due to external reasons, the max rate we can achieve is 6, what number should we use?

Regards,
J. Dominguez.

------------------------------
Jesus Banda Dominguez
Alpek Polyester
Altamira TAM
------------------------------