Book Review

Overall Equipment Effectiveness
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Overall Equipment Effectiveness

By: Robert C. Hansen

Hardcover - 288 pages
Published by: Industrial Press
Publication Date: December 2001
ISBN: 0831131381


  1. Understanding the Power of Overall Equipment Effectiveness (OEE)
  2. Learning the Basics of OEE Metrics
  3. The Financial Aspects of OEE
  4. The People Factor
  5. Priority and Decision Tools
  6. Win/Win Maintenance/Equipment Shutdown Strategies
  7. Reliability 101
  8. Reliability Availability Maintainability/System Performance Analysis (RAM/SPA)
  9. A General Tool for Acceptance Testing
  10. Success or Failure


Our Review

The title to this book is slightly misleading. While it certainly covers the theory and practice regarding the establishment and use of Overall Equipment Effectiveness as a performance measure at your site (and does this very well), this book in fact covers much much more. In reality, it is a highly practical guidebook for Reliability Improvement in general. Written by Bob Hansen, a highly experienced Maintenance practitioner, who has spent the majority of his career with Kodak, the book reflects the extensive experience that Bob has clearly gained, through a series of practical tips and "how to" examples throughout the book. While there are a couple of areas where Maintenance consultants and theorists may have some quibbles, overall these are minor. This book is highly recommended and is a worthwhile addition to the range of books available on Maintenance and Reliability Improvement.

The book starts with a chapter which discusses the Business Context within which Reliability Improvement, in general, and Overall Equipment Effectiveness (OEE) Measurement, more specifically, operates. This successfully sets the scene for the remainder of the book. Within this chapter it specifically makes a difference between Overall Equipment Effectiveness (which is a measure of the "effective" utilisation of equipment within its scheduled runtime) and Total Effectiveness Equipment Performance (TEEP), which is a measure of the "effective" utilisation of equipment assuming continuous 24 hour/day, 365 day/year operation. Drawing this distinction can be very useful, as Operational personnel often have little control over the scheduled runtime of equipment (these often being determined by such factors as overall market demand, and senior management capital allocation decisions), and so OEE is a more effective measure at this level. On the other hand, senior management should be concerned more with total return on assets employed, and so TEEP is a more effective measure at this level. While I have not, to date, ever heard of the term TEEP (I believe that it is a Kodak-invented term, for whom Bob Hansen used to work), the concept is sound. As an aside, this book also effectively makes the link between TEEP and the key financial measure of Return on Assets in Chapter 3.

Chapters 2 and 3 discuss the application of OEE in more detail, and is specifically useful for those people operating in multi-product, multi-workstation production environments, where the calculation of OEE can be complex. Hansen makes the point that the most effective use of OEE is where it is focused on the bottleneck processes or workstations within your operation. Applying techniques such as Goldratt's Theory of Constraints (which is also discussed at various points throughout the book) can assist in identifying these bottleneck processes. Various worked examples assist with demonstrating the methods and calculations required to determine OEE and TEEP.

Chapter 4 discusses the people factor in creating Reliability Improvement. This chapter offers some highly practical advice and assistance in this area. In particular, examples are given of a framework for specifying the expectations that should be placed on Master Mechanics and Technicians, which are simple, and which would appear to be highly effective in motivating and guiding these people to assist in reliability improvement

Chapter 5 introduces a tool called the Value Fulcrum, which graphically illustrates and communicates priorities. It also introduces a decision tree for managing unplanned downtime in a Production area.

Chapter 6 gives some highly practical guidelines for managing equipment shutdowns and for minimising total shutdown duration. A very useful 52 point Shutdown Strategy Checklist is included in this chapter.

Chapter 7 moves on to discuss more general Reliability Improvement initiatives and techniques. Included in this chapter is section which defines various Reliability terms. Maintenance theorists, consultants, and pedants may, however, disagree with some of the defnitions in this area. For example, many Total Productive Maintenance (TPM) consultants would be highly likely to disagree with the definition of TPM as being "where production operators build maintenance skills to complete maintenance tasks on equipment systems". They would argue (correctly) that TPM is a much broader approach than this. Equally, the definition of FMECA as being "A structured method that examines the root causes of failures" is incorrect, because if applied within the boundaries of the existing FMECA standards, it does not deal with "root causes" of failure. Indeed the FMECA example given in Appendix 6 of the book does not address root causes of failure ("Pump loses capacity" is not a root cause of failure). Another slightly misleading example within this section of the book is where it is stated that "The failure rate of a system is the sum of the failure rates of the components". This is only true where the failure of any one component leads to failure of the entire system, but is not true where there is any redundancy built into the system. This is not clear in the definition given. This particular section of the book is the weakest part of this book, but fortunately this is a minor part of the book overall.

Other very useful sections in Chapter 7 include some highly practical discussion of how to go about starting a Reliability Improvement program, and some discussion of the application of Reliability Centered Maintenance principles.

Chapter 8 discusses, in more detail, some other OEE improvement techniques, such as RAM/SPA, Single Minute Exchange of Dies (SMED), the Theory of Constraints (TOC), Pareto Analysis (a step-by-step tutorial on how to prepare a Pareto Chart in Excel is included in Appendix 7), Cycle Time Improvement, Benchmarking and more. This chapter also includes a framework for conducting an Internal Maintenance Audit which includes 100 assessment elements across 15 categories. Once again, all highly practical, and extremely useful.

Chapter 9 discusses the use of Reliability Quantification Testing (RQT) for acceptance testing. This chapter is fine, as far as it goes, but the (unstated) assumption in the calculations and examples used, is that all failures are random in nature. This may not be the case. In fact, based on Nowlan and Heap's statistics from the Aviation Industry (which led to the development of Reliability Centered Maintenance), this assumption will not apply in 86% of cases. So, while the examples given represent a clear, concise, and easy to understand outline of the approach, the approach, in general, should be treated with caution. If you are looking for a more detailed discussion of RQT techniques (as well as reliability statistics in general), then I would highly recommend David Smith's book, "Reliability, Maintainability and Risk". You can read my review of this book here.

The final chapter concludes the book by discussing why some organizations succeed in their reliability improvement efforts, and others fail. In Hansen's view, while he acknowledges that no two organisations are alike, he considers that the key to success is in effectively combining:

  • Leadership
  • Focused Targets
  • The OEE-TOC cycle, and
  • Active Learning.

All of this must be achieved while also successfully overcoming individuals natural resistance to change. Again, practical guidance is given in this chapter.

The Appendices are also valuable, although Appendix 2, discussing the use of RAPTOR for reliability modelling, confuses the difference between Probability of Failure and Conditional Probability of Failure, and contains some erroneous statements as a result. If you choose to buy the book (and I recommend that you do) watch out for that.

To conclude, while there are some minor technical aspects of this book that theorists, academics, and consultants may disagree with, overall this book would be a valuable, and highly practical addition to any professional Maintenance Management library. Despite its title, this book successfully discusses a wide range of Maintenance and Reliability improvement tools and techniques (including OEE), and includes a wide variety of examples and highly practical tips and suggestions. Recommended reading.

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