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Asian Research Consortium

Asian Journal of Research in Business Economics and Management
Vol. 5, No. 9, September 2015, pp. 95-120
ISSN 2249-7307

Asian Journal
of Research in
Business Economics
and
Management
www.aijsh.org

Proposing Leanness Measures in Equipment Level for LowVolume Make-to-Order Production Environments – The
Complementary Tools for OEE
KhodayarSadeghia,Mohammad Aghdasib
a

PhD Student of Industrial Engineering, Tarbiat Modares University, Tehran, Iran.

Associate Professor of Industrial Engineering, Tarbiat Modares University, Tehran, Iran.

b

DOI NUMBER-10.5958/2249-7307.2015.00176.0

Abstract
This article presents two new assessment models to investigate the performance of production in a low
volume make-to-order production environment. These tools can help companies running these production
strategy to measure and monitor the degree to which implementation of lean discipline to be
successful.Overall Equipment Effectiveness (OEE) is an important part of the proposed concepts. OEE is
originally used as a measure for evaluation of utilization effectiveness of manufacturing operation, but it
can also be used as an indicator of performance within a manufacturing environment.However, according
to our experiences and research results, using OEE as a performance indicator is not appropriate for lowvolume make-to-order production environments. This is mainly because, OEE has been, originally and
historically, developed and used for mass-production environments and due to high amount of Typ-1
losses in low volume make-to-order environments, it cannot be considered as a proper tool for assessing
leanness of a production environment in equipment level.Therefore, we propose Overall Equipment
Deficiency (OED) and Overall Equipment Inertia (OEI) as two simple metrics to investigate Type-2 and
Type-1 losses. Especially, the purpose of OED is to measure all hidden type-2 waste related to an
equipment in the shop floor of the production environment. It is also used for diagnostic purposes such as
finding root causes of waste.

Keywords:Lean production, waste measurement, low volume make-to-order production, Overall
Equipment Effectiveness (OEE), Overall Equipment Deficiency (OED)

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Sadeghi& Aghdasi (2015). Asian Journal of Research in Business Economics and Management,
Vol. 5, No. 9, pp. 95-120

1. Introduction
This article aims at introducing assessment tools to investigate the performance of production in low
volume make-to-order production environments. These tools can help production companies to measure
and monitor the degree to which implementation of lean discipline to be successful.
Bellgran et. al. (2010), state that manufacturing industry of today is facing extensive and evergrowing challenges due to the globalization, increased competition and the environmental situation. To
be able to maintain and develop the ability to compete on a global market, manufacturing
companies need to be successful in developing innovative and high-quality products with short leadtimes, as well as designing robust and flexible production systems implying the best preconditions
for operational excellence. The paradigm of Lean Production is implemented worldwide in order to cope
with many of these challenges. Lean could be considered the best way known today of how to
manufacture products in a resource efficient way (Andersson et al, 2011).
Consequently, it is discovered that measurement is needed for identifying the problems in order to
improve the productivity. To achieve this, it is necessary to establish appropriate metrics for
measurement purposes (Nachiappan and Anantharaman, 2006). The TPM paradigm, launched by
Nakajima (1988) in the 1980s, provided a quantitative metric for measuring the productivity of
individual production equipment ( Eswaramurthi, 2013).
As defined by Nakajima (1989), Overall Equipment Effectiveness (OEE) is an important part of this
concept. OEE is originally used as a measure for evaluation of utilization effectiveness of manufacturing
operation, but it can also be used as an indicator of performance within a manufacturing environment.
Comm et. al. (2000) state that ―Industries strive for leanness, because being lean means being competitive
by eliminating the non-value added practices‖, i.e., wastes. However, the strategy for a generic lean
practice implementation, and achieving leanness throughout, lacks strong evidence and is not clear to
many.
However, according to our experiences and research results based on implementation of lean production
in a printing house conducted on action research basis, using OEE as a performance indicator is not
appropriate for a low-volume high-mix make-to-order production environment such as commercial
printing industry. This is mainly because OEE is originally developed and used for mass-production
environment (de Ron et. al., 2006)
The objective of this paper is to propose Overall Equipment Deficiency (OED) as a dedicated and simple
metric to investigate the deficiency of make-to-order production environments. The purpose of OED is
trifold: it measures all hidden type 2 waste in the shopfloor for any producing equipment, it is used for
diagnostic purposes such as finding root causes of waste, and it is used to identify the hidden capacity of
production that can be earned.

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. surveys have the nature of subjectivity. and achieving leanness throughout. Recently. 2008). has become the basis for much of the optimization movement that has dominated manufacturing developments since the last decade (Liker. However. 2. i. lean assessment tools. lean manufacturing has become the key approach to managing this complexity (Liker. Only a few of them address the latter. instrumental in introducing the just-in-time (JIT) production system to the United States.g. Hall. Literature Review The concept of lean thinking (Womack et. an individual metric focusing on a specific performance aspect cannot represent the overall leanness level. 2005). 1998). quick changeover. elimination of waste has a main role. Since long time ago. Numerous tools and techniques have been developed to tackle specific problems in order to eliminate non-value-added activities and become lean. and for getting to this aim. Comm et.e. 95-120 2. al. supply chains and capital assets (Pagatheodrou. and integrated measure of overall leanness has not been established for lean practitioners to measure how lean a system is (Hung-da Wan et al. and the predefined lean indicators of a questionnaire may not fit every system perfectly. Hence. No. 1996) originated from the Toyota production system (TPS) developed in 1950s Japan. The Toyota Production System (TPS). Most of the existing lean tools (e. al. budget cuts and capacity downsizing (Pagatheodrou.) focus on ‗how to become leaner‘ instead of ‗how lean it is‘. An objective. 2000. 5. wastes. 2005). manufacturing has been trying to optimize operations. 97 . Asian Journal of Research in Business Economics and Management. (2000) state that ―Industries strive for leanness. the pioneering approach to manufacturing leanness.Sadeghi& Aghdasi (2015). Compared with the efforts made to address ‗how to become leaner. Chang 2001). etc. Several lean metrics have been developed for evaluating the performance and tracking the improvements of lean systems. The value stream mapping techniques. Kanban system. 1997. However. Monden (2011). quantitative. But strategy for a generic lean practice implementation. 9. and lean metrics are three main categories that concern the level of leanness. 2004). its application has spread into other industries (Womack and Jones. On the other hand.. pp. Fourth Edition explains how to promote the culture and way of thinking needed to settle the TPS across any organization.‘ the statement ‗how lean the system is‘ received less attention. because being lean means being competitive by eliminating the non-value added practices‖. The Leanness Concept The waste-elimination concept of lean manufacturing has brought significant impacts on various industries.. lacks strong evidence and is not clear to many (Comm et al. having a clear idea about leanness in assessing the progress of any lean transformation project is very important. achieving this goal has become increasingly complex due to the fast moving global market.1. While automotive and aerospace industries were the first adopters of lean thinking. Vol. lean practitioners often use self-assessment tools to depict the current status of their system. 1996). However. in his book Toyota Production System: An Integrated Approach to Just-In-Time.

but are for some other reason deemed necessary for the company. (2003) observe that OEE is often used as a driver for improving the performance of a business by concentrating on quality. which is called Overall Equipment Effectiveness (OEE). it is aimed at reducing non-value adding activities often inherent in manufacturing processes.al. 9. hence. productivity and machine utilization issues and. It is a bottom-up approach where an integrated workforce strives to achieve overall equipment effectiveness by eliminating six large losses (Nakajima. Vol. these losses are given below: 98 . According to Muchiri et. 95-120 Waste can be defined as: ―Every activity that adds costs but non-value-added for the customer (Chiarini.( Eswaramurthi. 2012): • Type-1 muda include actions that are non-value-added. (2008). 1989). They even extend the list of losses to also include R&D and engineering usage time.Sadeghi& Aghdasi (2015). 2013) The original definition of OEE by Nakajima excludes planned downtime such as scheduled maintenance and breaks from the total available time. include these as equipment losses especially important in capital intensive industry. Asian Journal of Research in Business Economics and Management. i. 1999) and it is the true measure of the value added production by equipment. 2001).V. These are the first targets for elimination. No. in Fig. There are two types of muda . • Type-2 muda are those activities that are non-value-added and are also not necessary for the company. which is calculated by the multiplication of availability. K. while e. Regarding waste. Nakajima also developed overall equipment effectiveness (OEE) as a measure for assessing the progress of TPM. The OEE tool is designed to identify losses that reduce the equipment effectiveness. many organizations use the Japanese term Muda. 1. 5. 1989). These losses are activities that absorb resources but create no value. 2013). Bamber et al. pp. Type-1 and Type-2 muda (Sayer et.g..2. Jeong& Phillips (2001). 2006) The metric. 2013)‖. al. Actually OEE is a key performance measure in mass-production environments (de Ron. Muda is an activity that consumes resources without creating value for the customer. is accepted as a measurement of internal efficiency (Johnson and Lesshammer. 2.G. Mohanram. and P. increasing the total available time in the OEE calculation but hence reducing the risk of overestimating OEE (Anderson et al. These forms of waste usually cannot be eliminated immediately. performance and quality (Jeong.e. although Muda in Japanese has a much more restricted definition (Chiarini. Overall Equipment Effectiveness (OEE) TPM is a manufacturing program designed primarily to maximize equipment effectiveness throughout its entire life through the participation and motivation of the entire work force (Nakajima. 2010).

pp. 95-120 Fig. Different losses based on OEE measurement tool (Nakajima. Changeover from one product to another or from product of one size to another are some examples of these type of losses (Muchiri et. al. Minor stoppages are the stoppages that are less than 10 min. 2008). (2) Set-upand adjustment losses occur when production is changing over from requirement of one item to another. A stoppage is said to be major if it takes more than 10 min. Major stoppages may also result from supplier-related downtime or warehouse downtime ( Muchiri et. No.Sadeghi& Aghdasi (2015). Quality losses (5) Quality defects and rework are losses in quality caused by malfunctioning production 99 . Major stoppages due to machine failure or due to production defect lead to downtime losses. 1988) Downtime losses (1) Breakdownlosses categorized as time losses and quantity losses caused by equipment failure or breakdown. (4) Reduced speed losses refer to the difference between equipment design speed. 2008). 9. Asian Journal of Research in Business Economics and Management. 1. al. al. and actual operating speed. 5. Vol. Speed losses (3) Idling and minor stoppage losses occur when production is interrupted by temporary malfunction or when a machine is idling. 2008). for example due to equipment jams (Muchiri et.

9. we can also calculate OEE as following: 𝑂𝐸𝐸 = 𝑉𝑎𝑙𝑢𝑎𝑏𝑙𝑒𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔𝑡𝑖𝑚𝑒 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛𝑡𝑖𝑚𝑒 (1) Fig. (6) Reduced yield during start-up are yield losses that occur from machine start-up to stabilization. al. 1988) Jeong et. 2. calculation of OEE measurement tool (Nakajima. (2001). 5. Asian Journal of Research in Business Economics and Management. pp. No.3. Available production time is the total time available for production in a given period and valuable operating time can be estimated by multiplying the theoretical cycle time by the number of products that are successfully completed.Sadeghi& Aghdasi (2015). 95-120 equipment. 2. stated that equation (1) can be used to roughly estimate OEE without collecting all six loss categories.2. OEE measurement In addition to the popular way for calculating OEE in terms of three factors as shown in Fig. Vol. Quality losses due to products that fail to meet specifications. 100 .

Make-ready:These are set-up and adjustment losses occur when production is changing over from requirement of one item to another. 9. Poor quality of materials and product not matched to customer‘s needs are also causes for this type of losses. 4. 4. no orders for being accomplished and some human factors such as labor absence. Lossesdue to no production at all. According to lean concept. These losses should be minimized but could not be eliminated. 95-120 3. Component jam is a good example for these type of losses. Changeover from one product to another or from product of one size to another are some examples of these type of losses.These are production losses that prevent to produce any units of products and include the following: 1. Low speed:Reduced speed losses refer to the difference between equipment design speed. The framework shown in Fig. Quality defects and rework are losses in quality caused by malfunctioning production equipment. This classification helps the decision-maker to measure different causes of production losses so that attention can be given to the relevant causes. classifies production losses into different categories depending on the cause of loss. No. A New Approach To Production Losses In this section a general framework with different categories of production losses has been developed. 5. 101 .Sadeghi& Aghdasi (2015). Minor stoppage and idling: Idling and minor stoppage losses occur when production is interrupted by temporary malfunction or when a machine is idling. and actual operating speed. Losses due to low production. overproduction is also a special type of waste. In the following main categories of production losses are defined. In other words they are non0value added but necessary activities. Asian Journal of Research in Business Economics and Management. Losses due to useless production. 2. material shortage. Vol. These are production losses that decrease the volume of production and include the following: 3. Unplanned machine-stop:These are losses caused by equipment failure or breakdown. These losses are resulted from some factors such as equipment age and unskilled labor. pp.

No.Asian Research Consortium Asian Journal of Research in Business Economics and Management Vol. 95-120 Asian Journal of Research in Business Economics and Management ISSN 2249-7307 www. 3. pp.aijsh. September 2015. 9.org Fig. Factors To Be Measured If we define: 𝑁𝑇 = the amount of value created or Number of good parts produced in available production time or shift time (units) 𝑁𝑇𝑚𝑎𝑥 = theoretical number of parts produced in available production time =theoretical production rate (units/h) X available production time (h) 𝑆𝑁 = normal speed (units/h) 𝑆𝐿 = low speed (units/h) 𝑛= number of orders accomplished in the shift time 𝑡𝑆 = total machine stop time (h) 𝑡𝐿𝑆 = total low speed production time (h) 𝑡𝑠𝑕𝑖𝑓𝑡 = total available production time (h) 𝑡𝑀 = total make-ready time in the shift time for making n order (h) 102 (2) (3) (4) (5) (6) (7) (8) (9) (10) . Categorizing production losses for proposing OED 3.1. 5.

there are two types of non-value added activities (i. 5. we have: Poor quality losses = 𝑁𝐷 (h) or 𝑁𝐷 (units) (12) (𝑆𝑁 −𝑆𝐿 ) × 𝑡𝐿𝑆 (units) (13) Machine-stop losses = 𝑡𝑆 (h) or (𝑡𝑆 × 𝑆𝑁 ) (units) (14) Make-ready losses = 𝑡𝑀 (h) or (𝑡𝑀 × 𝑆𝑁 ) (units) Ideal value = 𝑡𝑆𝑕𝑖𝑓𝑡 × 𝑆𝑁 (units) or 𝑁𝑇𝑚𝑎𝑥 (units) (15) (16) 𝑆𝑁 Low speed losses = 𝑡𝐿𝑆 (h) or 𝑆𝑁 4. based on Fig. No. 9. 95-120 𝑁𝐷 = total defects produced in the shift time (units) (11) Fig. but are for some other reason necessary for the production. Type-2 losses are those activities that are non-value-added and 103 . Incorporating parts of available production time Then.e. pp. Proposing Overall Equipment Deficiency (OED) and Overall Equipment Inertia (OEI) As we know. Type-1 losses are actions that are non-value-added. waste or muda) which are categorized here as: Type-1 and Type-2 losses. Vol. 4. Asian Journal of Research in Business Economics and Management.Sadeghi& Aghdasi (2015). 4.

we define: ( Poor quality losses + Low speed losses + Machine stop losses) as Type 2 losses. Marketing and sales weakness. Component Jams Useless production Human errors Equipment malfunctioning Over productions Poor quality of materials Product not matched to customer‘s needs Then according to Fig. 5. pp. Product/Material requirements. the relation of Type 1 and Type 2 losses and previous mentioned causes of production losses are shown. shortage of energy. Asian Journal of Research in Business Economics and Management. Labor laziness Low production Equipment Age. then. Labor absence. Unskilled labor. Labor unrest. Material handling problems Market downturn. 95-120 are also not necessary for the production. Material shortage. Vol. No. Causes of Type 1 and Type 2 losses Production losses category Causes Type 1 losses Type 2 losses Root causes Makeready Warm-up Set-up and adjustments Machine changeovers Unplanned machine stop Equipment failures. Tooling damage. Minor stoppage and idling. we have: Available production time = Valuable operating time + Type 1 losses + Type 2 losses (18) therefore. Scheduling problem.Sadeghi& Aghdasi (2015). In table 2. Table 2. Supply problems. Repairs. 4. andMake-ready losses as Type 1 losses. 1= Valuable operating time Available production time + Type 1 losses Available production time + Type 2 losses Available production time 104 (19) . we have: Available production time (shift time) =Valuable operating time + (17) ( Poor quality losses + Low speed losses + Machine stop losses)+ Make-ready losses But if according to table 2. Unplanned maintenances. 9.

Because usually measuring the required variables in a work day and for an assumed equipment is a time consuming and may be impossible job. from the equation 22. OEE + OED + OEI =1 or (22) OEE (%) + OED(%) + OEI(%) =100% (23) However. pp. from Eq.(OEI + OEE) So we propose a very easy way for calculating OED as the following: 105 (25) . No. 95-120 however. 5. according to definitions 2 to 11 and equations 12 to 16: OEE = 𝑉𝑎𝑙𝑢𝑎𝑏𝑙𝑒𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔𝑡𝑖𝑚𝑒 OEI = 𝑡𝑀 𝑡 𝑆𝑕 𝑖𝑓𝑡 𝑡 𝑆𝑕 𝑖𝑓𝑡 OED = or OEE= 𝑁𝑇 (22) 𝑁𝑇𝑚𝑎𝑥 𝑡 𝑀 ×𝑆𝑁 or OEI= 𝑁𝑇𝑚𝑎𝑥 (23) 𝑁𝐷 𝑆𝑁 𝑡 𝑆 +𝑡 𝐿𝑆 + (24) 𝑡 𝑆𝑕 𝑖𝑓𝑡 As we get from Eq. 24. Vol. 9. calculating OED is not easy. 1. Asian Journal of Research in Business Economics and Management. we will have. we can find that: OED =1.Sadeghi& Aghdasi (2015). However. Valuable operating time Available production time = OEE Then. we know that. if we define Overall Equipment Inertia as: OEI = Type 2 losses (20) Available production time and Overall Equipment Deficiency as: OED = Type 1 losses (21) Avai lable production time then.

it is not inherently necessary and we can take it as Type-2 waste.e. waste or muda* which are categorized as: Type-1 and Type-2 muda.e. Type-2 muda are those activities that are non-valueadded and are also not necessary for the production. Therefore we may conclude: Type-1|actual = Type-1|min + Type-1 (26) • Sincewe assume that Type-1 is eliminable. and reduce Type-1 waste (muda) to the minimum level. ideally to zero. Type 1 waste is mainly because of make-ready time and the major part of it is necessary and totally cannot be eliminated. • To move to the destination of lean transformation in production stage of any production environment. No. we must eliminate Type-2 waste (muda) as much as possible. • From here on wherever we say Type 1 waste or Type 1 muda we mean this mentioned minimum amount of Type-1. So we can just reduce it to a specific amount (i. 5.e. in real situation when we talk about leanness on operating level. In other words the amount of time spent on set-up process which is more than 𝑚𝑖𝑛𝑇𝑠𝑒𝑡𝑢𝑝 (= Type − 1|min) ) is included in Type-2 waste by assumption. • For an equipment. g. This is shown in Fig. * In this paper we use waste and losses ( in narrow sense) instead of muda 106 . 9. it changes. Vol. 5. or actual target. This minimum amount (Type-1|min = minTsetup) is determined by experience or according to technological and operative restrictions. 95-120 According to lean concepts we know that: • There are two types of non-value added activities. is to eliminate total Type-2 muda while ignoring to eliminate or reduce Type-1 muda beyond the minimum level because it is actually impossible by definition (i. but are for some other reason necessary for the production.Sadeghi& Aghdasi (2015). by decreasing or increasing of Type-1 waste. non-value-added but necessary). minimum amount) by some tools such as SMED or standard work. • Afterward. pp. 5. i. • From Fig. Type-1 muda are actions that are non-value-added. we mean the degree to which Type-2 waste is close to zero and Type-1 waste is close to the minimum level. production of a printing machine in a work day. is obvious that OEE is a dependent variable and affecting by Type-1 waste. Asian Journal of Research in Business Economics and Management. • So the actual destination in our lean transformation journey. e.

Asian Journal of Research in Business Economics and Management. According to Fig. 5. 6. the new measure is proposed as Overall equipment Deficiency (OED) as following: OED = 𝑇𝑦𝑝𝑒 2 𝑤𝑎𝑠𝑡𝑒 𝑉𝑖𝑑𝑒𝑎𝑙 (27) This measure directly shows the amount of Type-2 waste in relation to 𝑉𝑖𝑑𝑒𝑎𝑙 and it is independent to Type-1 waste. it could be a good measure for justifying about the leanness of the production. As it is shown in Fig.Sadeghi& Aghdasi (2015). No. therefore its consideration in the process of measuring performance (by some tools such as OEE) prevents us from identification of the major problem i. 9. pp. 95-120 Since Type-1 waste (in minimum level) is usually out of control. So in make-to-order production environments where a large number of orders being produced each day and consequently large number of Type-1 waste being recognized. OED is defined as: OED = 𝑇𝑦𝑝𝑒 2 𝑤𝑎𝑠𝑡𝑒 𝑉𝑖𝑑𝑒𝑎𝑙 − 𝑉𝑎𝑐𝑡𝑢𝑎𝑙 − 𝑇𝑦𝑝𝑒 1 𝑤𝑎𝑠𝑡𝑒 = 𝑉𝑖𝑑𝑒𝑎𝑙 𝑉𝑖𝑑𝑒𝑎𝑙 where. Vol. 𝑉𝑖𝑑𝑒𝑎𝑙 = 𝑇𝑠𝑕𝑖𝑓𝑡 × 𝑆𝑁 (29) 𝑇𝑦𝑝𝑒 1 𝑤𝑎𝑠𝑡𝑒 = 𝑛𝑇𝑠𝑒𝑡𝑢𝑝 (30) 𝑉𝑎𝑐𝑡𝑢𝑎𝑙 = 𝑁𝑇 (31) 107 (28) . Type-2 waste. 6.e.

9. Possible situations for degree of leanness of a printing machine in an arbitrary time period 108 . 5. Asian Journal of Research in Business Economics and Management.Sadeghi& Aghdasi (2015). No. 95-120 Fig. pp. 5. Vol.

The comparison between OED and OEE 4. 95-120 4. 6. we can write: 𝑉𝑎𝑐𝑡𝑢𝑎𝑙 = 𝑉𝑖𝑑𝑒𝑎𝑙 − 𝑇𝑦𝑝𝑒 1 𝑤𝑎𝑠𝑡𝑒 − 𝑇𝑦𝑝𝑒 2 𝑤𝑎𝑠𝑡𝑒 or 109 (33) . 9.2 OED as a graphical tool Based on Fig. 5.Sadeghi& Aghdasi (2015). pp. Asian Journal of Research in Business Economics and Management. Vol. 7.1 Special case for calculation of Overall Equipment Deficiency (OED) where in addition to definitions 2 to 11: 𝑇𝑠𝑒𝑡𝑢𝑝 is defined as the minimum required make-ready time for producing an order that is assumed constant and is identified by the experts according to technological constraints Therefore for an equipment in each shift time we have: OED (%) = (1 − 𝑁𝑇 𝑆𝑁 𝑛𝑇𝑠𝑒𝑡𝑢𝑝 − ) × 100 𝑇𝑠𝑕𝑖𝑓𝑡 𝑇𝑠𝑕𝑖𝑓𝑡 (32) Fig. No.

Sadeghi& Aghdasi (2015). 5. Fig. Graphical model of OED 110 . 9. 95-120 𝑁𝑇 = 𝑆𝑁 𝑇𝑠𝑕𝑖𝑓𝑡 − 𝑛𝑇𝑠𝑒𝑡𝑢𝑝 − 𝑇𝑦𝑝𝑒 2 𝑤𝑎𝑠𝑡𝑒 (34) if we assume that Type-2 waste equals zero we will have the equation of a line (𝑁𝑇 = 𝑓(𝑛)) as following: 𝑁𝑇 = 𝑆𝑁 𝑇𝑠𝑕𝑖𝑓𝑡 − 𝑛𝑇𝑠𝑒𝑡𝑢𝑝 (35) This line has been shown in Fig. Vol. 5. 7. pp. 7. Asian Journal of Research in Business Economics and Management. No. This line is our target for any leanness improvement and it is also the graphical equivalent of the middle situation in Fig.

No. can be sketched parallel to the target line which passes through this point. 8. positioning three days of operation on OED graphical model 111 . . 9. Fig. Therefore. 8. Asian Journal of Research in Business Economics and Management. for a printing machines under three days of observation. This is shown in Fig. 7: 𝑂𝐸𝐷𝐴 = 𝑕𝐴 𝐻 (36) and a line.Sadeghi& Aghdasi (2015). 5. we will have in Fig. Vol. As much as the line passing through the operation point be closer to the target line. pp. 95-120 According to geometric principles.𝑁𝑇 ) which is obtained from the production information of a work day. it can be proved that for every operation point A (𝑛. by putting the points related to the operation of a work center or a printing machine in a specified period of time we can visually have a good idea about the leanness situation of the production. the related OED is smaller and as much as this line be away from the target line the related OED is larger and consequently the operation is more inefficient.

pp. OEE comparison between two working days of a printing machine Day Number of jobs (n) Available operating time or Tshift (h) Normal print speed or S (sheet per hour) Minimum amount of Tsetup for each job (min) Actual Tsetup for each job (min) Total time spent for setup Other than set-up time waste/Type-2 waste (min) Total Type2 waste (min) Average of type2 waste for each job(min) Valuable operating time (h) Total Value earned (Number of printed sheets) OEE (%) 1 1 8 10000 (sph) 15‘ 50‘ 50‘ 40‘ 2 21 8 10000(sph) 15‘ 20‘ 20 x21=420‘ 0 40+(50-15)=75‘ 21 x (20-15)=105‘ 75‘ 5‘ 8-1.5=6. 95-120 5Industrial examples of OED application 5. Vol. 5.5% 5.5h 65000 sheets 1h 10000 sheets (65000/80000) x 100=81. This is because in such a production environment. while OEE usually is used for indication of how effective the production process is. In table 3. too much time spend for changeover and set-up operations which result in too much Type-1 waste.2 Example 2 when the minimum set-up time required for having color ok for any job is 15 minutes (𝑇𝑠𝑒𝑡𝑢𝑝 ). and 16 jobs done in one day (𝑛). 9. Table 3. the production information of two days working of a printing machine has been compared to determine the useless of OEE in commercial printing industry.Sadeghi& Aghdasi (2015). the total number of accepted sheets by the customers equals 18000 sheets (𝑁𝑇 ). then for a 15 hours shift time(𝑇𝑠𝑕𝑖𝑓𝑡 )we have: 112 .25% (10000/80000) x 100≈12. Asian Journal of Research in Business Economics and Management. No. it will be clear from the following example (see Table 3) that OEE is not appropriate for assessing the leanness of a low-volume make-to-order production such as commercial printing. normal speed of printing equals 11000 sheets per hour (𝑆).1 Example 1 Based on the above logic.

So it is useless as a performance measurement tool for a low volume make-to-order environment such as commercial printing business.2. as it is shown in Fig. Vol. Total Type-1 waste (in minimum level which is specified by the number of jobs done and 113 . 12.625% 8 8 (39) and for day 2: OED % = 1 − 10000 10000 21 × 15 60 − 8 8 = 21. but this is not the same for OEDs of these two days. 6.5%). the project team including the researcher investigated on using OEE as a performance metric or progress measure of the project.e. in phase 3 of the implementation road map. we can see that while the OEE for day1 (i. In other words their OEDs are not as different as their OEEs.e. the phase of discovering waste. Results and discussion The context of this research is a commercial printing company located in Tehran. This printing house is running a project for implementation of lean production in the company. 95-120 OED(%) = (1 − (18000 11000) 16 × (15 60) − ) × 100 15 15 (37) (38) Then 𝑂𝐸𝐷 % = 62. Remember that the total Type-1 waste. 5. we came to the following conclusions:   OEE is decreased dramatically because of numerous changeover between productions of orders. So if the total Type-1 waste of these two days be neglected.87% (40) By comparing OEDs of day 1 and day 2 with OEEs of these two days. for the assumed printing machine in those days we have: for day 1: OED % = 1 − 65000 10000 1 × (15 60) − = 15. 81. pp.42% Example 2: according to the information in the Table 2. i. No. But after several runnings of the action research cycle in this phase.e.Sadeghi& Aghdasi (2015). As it is mentioned in section 3. since 2012. in minimum level. 3. we can say that the leanness of day2 is almost as much as day1 and it is not so worse. 9.25%) is very larger than OEE for day2 (i. Asian Journal of Research in Business Economics and Management. is because of commercial printing business model and it is out of our control.

Asian Journal of Research in Business Economics and Management. and 𝑆 = 11000𝑠𝑝𝑕 ) are shown in two different phases of the lean implementation project:   firstly as shown in Fig. pp. In Fig. 10.e.e. at the end of the phase 3 of implementation road map (i. 9. 95-120  technological constraints) is usually out of the management control.Sadeghi& Aghdasi (2015). therefore its consideration in measuring performance by any means does not lead us to the main problem in our continuing effort to make the printing operation lean or leaner. and Fig.e. 9. phase of implement flow) on September 2014 114 . 10. Vol. The most important type of waste in operation level is Type-2 waste and can be measured and illustrated by OED very easily and effectively. Sakurai 475SD with𝑇𝑠𝑕𝑖𝑓𝑡 = 15 𝑕. the operation points of one of the printing machines (i. 9. at the middle of the phase 7 (i. phase of discovering waste) on September 2012 secondly as shown in Fig.𝑇𝑠𝑒𝑡𝑢𝑝 = 15′. No. 5.

Vol. pp. OED graph showing operation points on September 2012 115 . No. 5. Asian Journal of Research in Business Economics and Management. 9. 9. 95-120 Fig.Sadeghi& Aghdasi (2015).

10. OED graph showing operation points on September 2014 116 . Vol. pp. Asian Journal of Research in Business Economics and Management. No. 5.Sadeghi& Aghdasi (2015). 95-120   Fig. 9.

the phase of implement flow) as shown in Fig. we eliminated many causes of the Type-2 waste through establishment of some management systems such as production control and scheduling system or work standardization. selecting a day of working for cause-and-effect analysis of waste for a printing machine is not a previously specified task. 95-120 From these two graphs we can conclude very quickly and easily that:      The overall leanness situation of the production for this Sakurai printing machine is better on September 2014 in related to the same machine on September 2012. Asian Journal of Research in Business Economics and Management.Sadeghi& Aghdasi (2015). For example. pp. 10 for September 2014. 117 . on September 2014 we were nearly at the end of the phase 7 of the lean transformation road map (i. For example.e. 10. after two years of running the lean implementation project in the printing house. the phase of discovering waste). in Fig.e. are closer to target line than the points on Fig. encompasses the most operation points.e. Commonly. 9.e. i. In a commercial printing company. By using OED graphs. Vol. By counting the number of points between any two OED lines. the point C as the worst day or preferably any days on the left side of OED line 70% or OED line 80% can be selected. what is most important is that the improvement which is shown in the OED graph of September 2014 in related to the OED graph of September 2012 is not accidentally. 5. in Fig. This is because totally the operation points in Fig. in other words. 10. 3. 6. But this is not true about OED. we can figure out which OED interval. For example. the zone between two parallel OED lines. the right days can be selected visually. Discussion & Conclusion The most important difference between these two is that OEE highly depends on Type 1 waste but OED is independent of Type 1 waste and is a good criteria for measuring the waste which must be observed in implementation of any kind of projects. but. Another difference between these two is that OEE differs only by a change in the number of orders in one day. usually many jobs are produced every day and many different printing machines are used. as seen in Fig. So its OED should be something about 43%. the cases are limited to the mass production in packaging printing and publication printing and do not include commercial printing. Although OEE is used in some references for measuring the performance of printing machine. it is possible that in two different days with different number of orders have the same OED. For these reasons. if it brings about the decreased of OEE. As shown in both graphs. In other words. this managerial work is done according to the customer claim or based on the in charge manager‘s desire. it is the interval between OED 50% and OED 60% which encompasses 8 points. we can identify the OED of any point on the graph approximately but very easily. 10. identifying the leanest and the most unwanted days of these two months is very simple. Finally. On September 2012 we were at the end of the phase 3 (i. the Type-2 waste are more than 50%. No. however. i. dashed and oblique lines in the graphs. These are shown as point A (for the leanest day) and point C (for the day with most Type-2 waste) in Fig. By OED graphs. point C is positioned between two parallel OED lines 40% and 50%. It means that for 8 of 21 days that their operation points have been displayed in the graph. 9. 9.

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