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INTRODUCTION
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GETTING STARTED
How should I get started with lean manufacturing?
A good place to start your lean manufacturing journey is with TPM, OEE and the Six
Big Losses.

TPM: Getting operators involved in maintaining their own equipment, and

emphasizing proactive and preventive maintenance will lay a foundation for
improved production with fewer breakdowns, stops, and defects.
OEE: OEE measures how close you are to perfect production
(manufacturing only good parts, as fast as possible, with no downtime). It is
a great metric for benchmarking progress in improving manufacturing
productivity (i.e., eliminating waste).
Six Big Losses: One of the major goals of TPM and OEE programs is to
reduce and/or eliminate what are called the Six Big Losses – the most
common causes of equipment­based productivity loss in manufacturing. The
Six Big Losses traditionally are categorized as Equipment Failure, Setup
 and Adjustments, Idling and Minor Stops, Reduced Speed, Process Defects
and Reduced Yield. An alternate way of categorizing them is Unplanned
Stops, Planned Stops, Small Stops, Slow Cycles, Production Rejects, and
Startup Rejects.

Seiichi Nakajima published a book in 1984 called TPM Nyūmon (published in

English as Introduction to TPM: Total Productive Maintenance), which we highly
recommend as an as an excellent and practical introduction to TPM, OEE and the Six
Big Losses.

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THEORY OF CONSTRAINTS
Where should we focus our improvement efforts?
A common problem in manufacturing improvement programs is deciding where to
focus resources. Should all equipment be improved? Should the improvement focus
be on Downtime? Setup? Slow Cycles? Small Stops? Quality?

A related question is where to measure OEE (Overall Equipment Effectiveness). At

every step? At the end of the line? At the beginning of the line?

The answer to both sets of questions is the same – focus on the manufacturing
constraint (the bottleneck).

The concept of “the constraint” was introduced by Eli Goldratt in his 1984 novel The
Goal. Dr. Goldratt described how every complex system, including manufacturing
processes, consists of multiple linked activities, one of which acts as a constraint
upon the entire system. The constraint should be improved until it no longer limits
production, at which point the next constraint should be identified. Over time, Dr.
Goldratt developed these concepts into a comprehensive set of tools known as the
Theory of Constraints.

Bottom line – measure OEE AND focus improvement efforts on the constraint. The
constraint is the fulcrum (i.e., point of leverage) for the entire process. Focusing
improvement efforts on the constraint ensures optimal use of resources and is the
fastest route to improved productivity and profitability.

How do reject parts affect OEE in a multistep manufacturing

process?
The first thing to consider in a multistep manufacturing process is that OEE should
always be measured at the constraint. In this context, OEE is a measure of productive
time at the constraint, and OEE Quality Loss is a measure of time lost at the
constraint because a part has not been made correctly the first time. Consider the
following scenarios:

A part is rejected BEFORE the constraint but DOES NOT slow or stop the
constraint (because there is excess capacity before the constraint). From
the perspective of the constraint there is no OEE Loss.
A part is rejected BEFORE the constraint and DOES slow or stop the
constraint (because there is not enough capacity before the constraint to
cover the lost time). From the perspective of the constraint there is no OEE
Quality Loss because the constraint has not yet processed the part,
however, there is an OEE Performance Loss or OEE Availability Loss
(because the constraint is momentarily STARVED).
A part is rejected AT the constraint, which DOES affect the constraint
(because the constraint must produce an additional part). From the
perspective of the constraint there is an “internal” OEE Quality Loss.
A part is rejected AFTER the constraint, which DOES affect the constraint
(because the constraint must produce an additional part). From the
perspective of the constraint there is an “external” OEE Quality Loss.
In addition to OEE Loss, you may have Labor Loss (if a reject part is reworked) or
Yield Loss (if a reject part is scrapped). Note that Yield is a measure of the conversion
of “material in” versus “good product material out”. Labor Loss and Yield Loss can
occur at any point of the manufacturing process, and are independent of OEE Loss.

Beware of the temptation to measure “everything” when you actually just need to
measure “enough” to drive improvement and to capture significant costs. Most
companies spend too much time measuring and too little time using the information
they gather.

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