Review of Operational Effectiveness, Part 1
In my last post, I began a discussion on the basic concept of operational effectiveness. I talked about the need to maximize effectiveness of equipment in the constraint operation, the need for a truly objective metric to gauge equipment effectiveness, and what it means for our equipment to be effective. I provided a formula for calculating Overall Equipment Effectiveness (OEE), and laid out six big losses and described #1, the breakdown losses. Finally, I called on our readers to make the “zero tolerance pledge” by implementing Total Productive Maintenance (TPM).
The remaining five of the “six big losses” which limit equipment effectiveness
In Part 2 of this series, I will describe the remaining five losses associated with the Overall Equipment Effectiveness (OEE) metric. Just as in the last two series of posts, much of what I will be presenting in this series of posts is taken from my second book,  The Ultimate Improvement Cycle – Maximizing Profits Through the Integration of Lean, Six Sigma and the Theory of Constraints.
In Part 1, I detailed breakdown losses. Let’s now look at the remaining five types of losses.
Setup and adjustment losses
This type of loss occurs after production of one type of product ends and the equipment is changed over and adjusted to meet the requirements of a new product. One clear example of this type of loss is extended changeover time, which we often see when manufacturers change dies in a stamping press. It is common to see changeovers lasting for hours, when these should be completed in minutes! In one of the next posts in this series, I will provide further analysis of this subject.
Reduced speed losses
When we purchase equipment, one of the key factors in the selection process is the design speed at which the equipment is intended to operate. When the equipment fails to operate at the design speed, then we have speed losses. Because speed losses occur gradually over time, they are often overlooked in the day-to-day operation of the plant. Speed losses can have a significant impact and should never be ignored.
There are several reasons why equipment might not operate at the design speed. Perhaps running at design speed produces defective product or results in mechanical problems. Or maybe operators fear that if the equipment is run at design speed, that will end up harming the machine. It is also possible that the reason for not running at design speed is that we don’t actually know the design speed. Whatever the reason, the goal must be to reconcile the difference between design speed and actual speed.
Idling and minor stoppages losses
Idling and minor stoppages result from production being interrupted by a temporary equipment malfunction. A typical example of this type of loss is a jam occurring somewhere in the operation. The equipment is still functioning, but it may be temporarily blocked and will sit idle until the jam is removed. These types of losses are typically never recorded on a downtime sheet, but can account for a significant amount of lost throughput if they are ignored. With an effective TPM initiative, this type of loss can be reduced to near zero.
Quality defects and rework losses
Whenever we have defective product and rework that is being caused by an equipment malfunction, we have this type of loss. If the defects appear suddenly and sporadically, we can typically tie them back to a change in how the equipment is operating, and we can usually can fix the problem in very short order. Unlike sporadic defects, chronic defects are not as easy to solve. Just like chronic breakdowns, these will require a thorough investigation and innovative solutions. Of course, the goal here is zero defects.
Startup (yield) losses
These are yield losses that occur in the early phases of production during the stabilization period. The extent of the loss is dependent upon several factors including process stability, the maintenance that has already been performed on the equipment, and the operator’s level of experience.
Coming in the next post
In Part 3 of this series, I will look at how these six losses relate to our measure of equipment effectiveness and the components of availability, performance rate, and quality rate. Then I will discuss how we can measure these three components.
Until next time.
 Bob Sproull, The Ultimate Improvement Cycle – Maximizing Profits Through the Integration of Lean, Six Sigma and the Theory of Constraints, CRC Press, Taylor & Francis Group, 2009
 Seiichi Nakajima, TPM Development Program – Implementing Total Productive Maintenance, Productivity Press, 1989
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