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Procedia CIRP 7 (2013) 31 – 36

Forty Sixth CIRP Conference on Manufacturing Systems 2013

Measuring Global Production Effectiveness

Gisela Lanzaa, Johannes Stolla*, Nicole Strickera, Steven Petersa, Christof Lorenza
a
Insitute of Production Science (wbk), KIT – Karlsruhe Institute of Technology, Kaiserstraße 12, 76131 Karlsruhe, Germany
* Corresponding author. Tel.: +49-721-608-46166; fax: +49-721 608-45005. E-mail address: johannes.stoll@kit.edu.

Abstract

Increasingly shorter product life cycles at an increasing number of variations call for productive, reliable and quality-oriented
production systems and networks which are able to meet the turbulence of global demand especially at an expected higher
frequency of economic crises. The following paper presents the development of a theoretical measure for an evaluation that
integrates all aspects of a globally distributed production system. The work is based on the latest enhancements of the classic OEE
figure of the TPM concept.

© 2013The
© 2013 TheAuthors.
Authors.Published
Published
by by Elsevier
Elsevier B.V.B.V.
Open access under CC BY-NC-ND license.
Selection and/or
Selection and peer-review
peer-review underunder responsibility
responsibility of Professor
of Professor Pedro
Pedro Filipe doFilipe
CarmodoCunha
Carmo Cunha

Keywords: Global Production, Overall Equipment Effectiveness, Key Performance Indicators

1. Introduction 2. Overall equipment effectiveness

The sector of machinery and plant engineering is
facing new challenges. A growing multitude of variants
and an increasing product differentiation due to more
customization, shorter product life cycles, uncertainty in
demand as well as growing international stress of
competition have to go along with an increase in
effectiveness [1].
Many companies meet these new challenges with an
increasing automation of their production facilities and
an ongoing internationalization of their production sites.
Automation and linking of production systems lead to
complex manufacturing systems which additionally have
to go global. The requirements for the developing global
production networks are still increasing although the
degree of complexity regarding production costs, quality
of processes and products is increasing.
A commonly used figure to evaluate the efficiency of
production systems is the Overall Equipment
Effectiveness (OEE). The OEE [2] is a figure that
basically refers only to one machine. However, there
exist extended concepts, but they are mostly just limited
to individual production lines. There is no global
extension of this effectiveness concept that defines and
summarizes influencing parameters in a global
production network.
This paragraph will discuss the Overall Equipment
Effectiveness more in detail. The Overall Equipment
Effectiveness (OEE) is the traditional evaluation
measure of the Total Productive Maintenance (TPM)
that has to be maximized and it compares the operating
level with the ideal potential of the plant performance.
The fundamental idea is based on the conception that
this ideal operational potential is reduced by various
losses. By using this figure, the reasons for these losses
are to be identified, so that corrective actions can be
taken accordingly [2], [3].
The productivity figure had been developed by
Seiichi Nakajima as part of the TPM. At first, this figure
had only been used in the TPM sector but the OEE can
now also be used as an independent operational
improvement tool as for Lean Production and Six Sigma.
The OEE evaluates and improves by now the
effectiveness of machining and manufacturing processes
for a large number of companies and shows the
efficiency of the TPM concept [4], [5], [6].
The OEE is more and more used in many production
and assembly lines for series production. With the help
of the OEE, productivity and economic benefit can be
well described. On the basis of manually or
automatically recorded operational and machinery data,

2212-8271 © 2013 The Authors. Published by Elsevier B.V. Open access under CC BY-NC-ND license.
Selection and peer-review under responsibility of Professor Pedro Filipe do Carmo Cunha
doi:10.1016/j.procir.2013.05.006
32 Gisela Lanza et al. / Procedia CIRP 7 (2013) 31 – 36

the OEE can be calculated very easily for a defined 3.1. Total Effective Equipment Productivity (TEEP)
production period [7]. Figure 1 summarizes the key
elements and the fundamental influencing parameters of While the OEE is using the planned production time
the OEE. as a temporal reference figure (see Fig. 1), the
theoretically utilizable calendar time should be
Production line Loss Calculation for OEE integrated into a comprehensive survey [9]. Setting and
maintenance activities can in that way be transferred to
Total useful life Overall Equipment Effectiveness
(OEE) the time of planned downtimes in order to obtain a
=
downtimes
Scheduled

Planned Utilization Time

Interruptions, breaks, downtimes, Availability x higher OEE at the expense of plant utilization. This
maintenance, etc. Performance x Quality
utilization integrates [10] into the key figure Total
Effective Equipment Productivity (TEEP).
Availability

Plant shutdown Availability

loss

Operating Time
Changeover and set-up time
Available Time – Downtime
Available Time The planned production time in traditional
Unoccupied time, short stops Performance calculations of the OEE leaves room for definition and
Speed

Net Operating
loss

Allocated Time
Time
Lower speed Actual Time interpretation. The TEEP reduces this problem and
Value Quality
Initial production problems
contributes therefore to a better comparability. On the
Quality

adding
loss

Operating Output – Rejections

Rejections, rectification of defects
Time Output
other hand, as an exclusive key figure, it can lead to the
wrong conclusions about the real plant state. At one shift
Fig. 1. OEE and sources of loss to display the operational behavior
and two shift utilizations without weekend shifts the
according to [1, 7, 8]
TEEP cannot reach a value above 50 percent, if the
overall operating time is defined as calendar time. It has
According to [2], OEE values around 0,4 are not
to be considered that the overall operating time can also
unusual figures for producing companies. Although
be defined as planned production time. Then, only the
individual factors might be rated as very good, this way
planned down times are integrated into the TEEP. By
of calculation leads to a detection of possible
looking at the two key figures TEEP and OEE potential
misjudgments. "Studies carried out worldwide have
problems regarding utilization and equipment
revealed that the average OEE in producing companies
effectiveness can be identified.
is at about 60 %" [6]. In consequence, a target level of
85 % represents a clear potential for improvement for
3.2. Overall Asset Effectiveness and Overall Plant
many companies [2].
Effectiveness (OAE/OPE)
In recent years various changes and extensions to the
original OEE figure have been made. The following
Based on the summary of the illustration of the
chapter will describe some of these approaches more in
possibilities for extension of the original basic concept,
detail.
at first two extensions of the OEE are to be presented for
the determination of the Overall Equipment
3. Selected Extensions of OEE
Effectiveness and for the identification of plant losses
according to [8]: The Overall Asset Effectiveness (OAE)
In literature as well as in practice, various
terminologies have come up which are either related to and the Overall Plant Effectiveness (OPE). While
single plants or have been extended to a holistic view of literature deals with them in a limited way, they are used
a complete factory [8]. Table 1 shows a selection of by many companies and industries and have the same
common extensions. meaning with regard to industrial application.

Table 1. Overview of selected key figures

TEEP OAE/OPE OLE OEEML/ TOEE

Concept Extension of OEE by Relation between actual and Manufacturing system as whole Identification of critical line
integration of planned possible Output of several line processes process steps and consideration
shutdowns of decoupling

O act Onact t BS
OAE n OEEML TOEE L
O th Tth ,op , n O n max t i TLth tL
Calculation TEEP EU * A * P * Q i 1
Tvalue OLE
OPE Tth Tth ,op ,1
Tth TOEE ALint ALext OEE

EU: Equipment utilization O: Output : overall scheduled operative time BS: bottleneck station
A: Availability : overall scheduled time Tth ,op : availability losses due to preventive
P: Performance
Tth n: index of last station
ALint
Q: Quality : value creating time L: index of line maintenance
Tvalue : availability losses due to external effects
t: cycle time ALext
( - planned stops)
Tth
 Gisela Lanza et al. / Procedia CIRP 7 (2013) 31 – 36
According to this, a comprehensive OEE can be
determined without difficulty with the nominal-actual
value ratio for a complete production system, so that the
calculation of the effectiveness parameters becomes
considerably simpler (simplicity). OAE and OPE differ
in the calculation of the parameters concerning the
considered items (quantity or time) whereas the OPE in
contrast to the OAE is not determined by output quantity
but by length of time. In both cases, any losses are
considered but an identification of the mentioned
weaknesses is not possible. Therefore, a real added value
from the extension of the original OEE is not apparent.
3.3. Overall Line Effectiveness (OLE)
An alternative possibility for extension is the Overall
Line Effectiveness (OLE) by NACHIAPPAN. In this
approach the production system is described as the
entirety of several process steps to completion of the
product. This is in line with the criticism on the OEE
that the focus on single machines or plants is not
significant because the inter-plant interference is
considerable. The result of this process integration is a
holistic method of an approach to single line process
steps that allows for a simple calculation/measurement
of the individual lines-OEE.
During calculating one have to consider that the
machines are directly interdependent. Thus, the output of
a machine is determined by its input. This input, in turn,
corresponds to the output of the upstream machines (see
[11], p. 992). In doing so, a continuous flow sequence is
assumed for n process steps while defectives and parts to
be reworked are removed. If the single plants are
decoupled the method loses its validity. The
corresponding line availability results from the ratio of
the actual operating time to the planned holding time
where the planned holding time depends on the planned
downtimes of the first machine. Overlaps of planned
downtimes are not taken into consideration.
Furthermore, the approach by NACHIAPPAN takes
especially the time dependence between the different
plants and machines into account. In case of a
continuous production flow, OLE consequently gives
very good results. However, the hypotheses concerning
operating time definition for intercalated buffers and
decoupling have to be abandoned. In addition, the
formula presented in table 1 merely focuses on the last
process n in the line so that an identification of the
critical process steps is problematic.
33
3.4. Overall Equipment Effectiveness of a
Manufacturing Line and Total Overall Equipment
Effectiveness (OEEML/TOEE)
On this basis, BRAGLIA introduces Overall Equipment
Effectiveness of a Manufacturing Line (OEEML). In the
first instance, further loss categories are defined to
determine afterwards Total Overall Equipment
Effectiveness (TOEE). It should be noted, that planned
downtimes for preventive maintenance and external
sources of line losses are integrated [12]. Furthermore,
external line availability losses which are caused due to
upstream or rather downstream transportation processes
are determined and calculated if thereupon the cycle
time of the machine is increased because of the
interlinking [12]. Provided that the line is still not
operated with optimal productivity the consideration of
decoupling by means of buffers can lead to the result
that single machines in the line have a shorter cycle time
than the real bottleneck workstation. If the buffer
capacities are exhausted, the line has to follow the cycle
time of the real bottleneck workstation [12]. Since the
real bottleneck workstation can vary from the theoretical
one, the bottleneck workstation change has to be
integrated in the determination of the OEEML. The
added value resulting from this extension can therefore
be described by the identification of the theoretical and
actual bottleneck workstation taking into account
decoupling and its influence on the OEEML. Thus, the
OEEML allows for the precise determination of the
machines influencing the overall effectiveness. By
means of counter measures and the setup of buffers the
overall system can be influenced positively as a
consequence. This represents therefore a real advantage
over the OLE. Basically, the approaches to Overall
Throughput Effectiveness, Overall Line Effectiveness
and Overall Equipment Effectiveness of a
Manufacturing Line are therefore very good extensions
of the OEE concept whereas the approach to the
OEEML can involve a calculation that can be
complicated because of the increasing loss categories as
well as the positive influence of the counter measures.
4. Global Production Effectiveness
Below, an evaluation method is presented that
transfers the idea of the overall plant availability to the
global production network - Global Production
Effectiveness (GPE). It is based on the principles of the
OEE and describes all essential determinates in the
globally distributed production system. For the
development of the GPE the single factors which
provide a basis for the integrated key figure are
presented at first. Depending on the actual network
configuration single determining factors can be
34 Gisela Lanza et al. / Procedia CIRP 7 (2013) 31 – 36

identified and defined in the global context. Afterwards, According to [13] the following calculation formulas
these parameters are individually constructed and then result for the possible subsystems:
transferred into the global comprehensive survey. n VAR Qa VAR n
The company infrastructure provides the network in ME J min min
i 1
i

t i k iJ
,
ta
a
min min k iJ t i , t a
i 1
(1)
which the company operates and thus determines its
geographic orientation. If the horizon is global, there has n 1 VAR i n
VAR n
to exist a transnational network for supply, production ME S min min
i 1 ti
Qj ,
tn
t BS (2)
j i 1
and sales that distributes structures and processes n
VAR i
strategically to different locations. For the GPE the ti
(3)
i 1
production network is particularly significant because ME P n
1
the GPE is to be projected up onto several departments i 1 ti
coming from the producing machines. n
min
VARi k iE Qi VARi
,
i 1 ti ti
ME E n
k iE 1
(4)
4.1. Manufacturing Effectiveness min ,
i 1 ti ti
VAR: variable factor (cp. Fig. 3)
Manufacturing Effectiveness (ME) represents an Q: Quality
n: index of last station
essential element of the GPE. With its help the a: index of station after joining/expansion
t: cycle time
effectiveness of single locations can be measured and BS: bottleneck station
additionally an indication of the interconnection between
the components of the GPE is provided. Moreover the For the calculation of ME the subsystems are
presented approaches to expansion, regarding the OEE, modeled in accordance with the equations (1) – (4) and
are taken up at that point again and all subsystems the overall system, in turn, considered as the serial
(joining, serial, parallel or expansion, (cp. Fig. 2)) of the system of the subsystems (cp. Fig. 2: grey shadowed
manufacturing system are modeled. subsystems are elements of the overall serial system).

4.2. Sourcing Effectiveness

The factors of the OEE are also used to number the

sourcing effectiveness (SE) for which availability,
performance and quality have to be defined. Availability
J-subsystem S-subsystem P-subsystem
can be defined as the proportion of on-time delivery of
E-subsystem
correct quantities by a supplier. The quality degree
Fig. 2. Exemplary line system with different subsystems
corresponds to the proportion of good parts delivered
(J= joining, S=serial, P=parallel, E=expansion) and the performance rate is standardized on a scale from
0 to 1 which is based on a comparative calculation
The change still exists in the joining in value k. This regarding stock handling or rather commissioning. The
value indicates how many parts of plant i are needed for multiplication of these individual values leads to the
the joining in plant a. The same applies to expansion. In supplier effectiveness (SupE). For a SE, the individual
addition, a variable factor (VAR) is introduced which is supplier figures have to be linked and related to each
to be proven by means of the flow sheet illustrated in other. Thereby, two conditions have to be distinguished:
Fig. 3 depending on the available data and the temporal dependency of the delivery (e.g. JIT) and of
disturbances to be taken into account. different scenarios. Basically, two forms of supplier-
provision can be distinguished. With a JIS or JIT
Individual
Measurement
delivery the supplier becomes dependent on time. This
machine data
time dependency can be decoupled by means of stocks.
Consideration No A time-dependent delivery with short-term buffers is not
of sheduled OEE
shutdowns? considered here, since this special form is depending on
Calculation Yes VAR variety and size. In addition, a distinction must only be
of ME
FE Integration of
external line No
TEEP
made between the relevant locations, since the national
losses? influencing of suppliers can be ignored. If parts are
Yes delivered depending on time, this delivery system can be
TOEE seen as a joining. A calculation of the SE in this case can
therefore be carried out according to formula (1):
Fig. 3. Flow sheet for calculation of ME
 Gisela Lanza et al. / Procedia CIRP 7 (2013) 31 – 36 35

n SupEi n For determining the global total effectiveness, the

SEJ min min Ti S (5)
i 1 Ti S i 1 whole system is divided into subsystems. For the system
Ti S : Time for order and Transportation of supplier i outlined in figure 4, the following four subsystems arise
as an example:
SupED,1
4.3. Transportation Effectiveness
SupEA,1 SE SupED,1
For the transportation effectiveness (TE) the SupEA,2
MEB TEC
D
MED
StEB
following total evaluation emerges, considering the SE TEC,1 TEC,2 TEC,3
StED
SupEA,3
transport damages (Q), the speed in relation to the A

maximum possible speed (L) and, if applicable, the A B C D

proportional waiting time until the means of transport
(V) can be made available, with n means of transport:
n
TE total QT LT V iT
i 1
4.4. Stock Effectiveness
For the stock effectiveness (StE), the following
formula arises for the three components of the OEE,
taking into account any possible damages caused by the
stocking (Q), the service level of logistics (L) and, if
applicable, a consideration of available storage areas
depending on random or fixed storage space allocation
(V):
StE V St
L St Q St
4.5. Personnel Effectiveness
For the personnel effectiveness (PE), the following
formula results, taking into account the created/moved
good parts (Q), the availability of a staff member minus
sick leave and holidays (V) and a standardized
productivity index compared with other states (L):
Fig. 5. Separation of global network into subsystems
(6)
Each of these subsystems will now be modeled
according to the presented individual dimensions (see
4.1 – 4.4.) at which ramifications and parallel or serial
sequences follow the logic of figure 2 or the equations
(1) - (4). Then, the four subsystems are perceived as a
serial overall system.
5. Calculation for a hypothetical system
To elaborate the applicability in industrial settings,
the approach is applied to a hypothetical global
manufacturing system (cp. Fig. 4 and 5). Therefore, the
(7) two manufacturing systems MEB and MED are assumed
to be as illustrated in Figure 6. Furthermore, it is
assumed that no scheduled downtimes are considered
and plant effectiveness can be calculated as OEE (cp.
Fig. 3).
MEB MED
2*
3 2 3

P P P
PE V L Q (8) 1 2 5 1 5

4 4

4.6. Integrated Key Figure

The formulation of the GPE is always related to an
individual network. Figure 4 shows an exemplary
globally networked manufacturing system:
Fig. 6. Sample manufacturing systems to determine ME
As pointed out in section 4.1 the systems can be
transferred to simplified serial system (cp. Fig. 7) by the
use of equations (1) to (4).

MEB MED
MES,1-2 MEP,3-4 OEE5 OEE1 MEP,2*-4 OEE5

Fig. 7. Simplified serial system

To demonstrate the results, realistic sample figures

have been chosen randomly as depicted in Table 2. The
Fig. 4. Exemplary global manufacturing system calculations for the subsystems of Fig. 5 have been done
36 Gisela Lanza et al. / Procedia CIRP 7 (2013) 31 – 36

according to section 4 and the overall key figure Global effectiveness (ME). SE has been defined to extend the
Production Effectiveness has been determined. effectiveness approach to procurement activities. With
TE another key figure has been introduced which
Table 2. Sample calculation for GPE evaluates the transport processes in the global
Key Figure Variables Result
production network. The associated stock formation has
Supplier 1
= 0,9325
Supplier 2
0,9260
Supplier 3
0,9411
been checked with the developed StE. When organizing
= 19,5 19,9 19,8 0,9104
a globally oriented company, personnel of different
Station-No. Q L V OEE t
origins have to be employed for the work processes,
1
2
0,9630
0,9598
0,9183
0,9062
0,8219
0,8265
0,7268
0,7189
19,2
18,8
= 0,6728
= 0,6935
expressed in PE. Through combining the defined key
3
4
0,9230
0,9414
0,9184
0,8856
0,8008
0,8582
0,6789
0,7155
15,1
19,1
= 0,7154
figures, the concept of a Global Production Effectiveness
5 0,9628 0,9005 0,8120 0,7040 18,3 = 0,6000
finally arises. Thereby, the effectiveness of any global
production structure can be evaluated and developments
0,909 0,930 0,965 = 0,8164
can be quantified and controlled.An important aspect
that the GPE fails to give is the adaptability and
0,6354 0,8401 0,6100 = 0,3256
flexibility of the structures. For this purpose, a separate
Supplier 1 Supplier 2
consideration on the basis of dynamic methods (see [14])
= 0,9735
= 37,7
0,9169
39,9 0,8677
is required and is content of further research.

0,8577 0,8636 0,8715 = 0,6455

References
Station-No. Q L V OEE t
1 0,9624 0,8994 0,8281 0,7168 38,2 = 0,7364
2 0,9257 0,9217 0,8345 0,7120 34,6 = 0,7129
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