Q 451. Explain the statement " Target cycle time for a process is Takt Time multiplied by the OEE"

 

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

• All questions so far can be seen here - https://www.benchmarksixsigma.com/forum/lean-six-sigma-business-excellence-questions/
• Please visit the forum home page at https://www.benchmarksixsigma.com/forum/ to respond to the latest question open till the next Tuesday/ Friday evening 5 PM as per Indian Standard Time. Questions launched on Tuesdays are open till Friday and questions launched on Friday are open till Tuesday. 
• When you respond to this question, your answer will not be visible till it is reviewed. Only non-plagiarised (plagiarism below 5-10%) responses will be approved. If you have doubts about plagiarism, please check your answer with a plagiarism checker tool like https://smallseotools.com/plagiarism-checker/ before submitting. 
• The best answer is always shown at the top among responses and the author finds honorable mention in our Business Excellence dictionary at https://www.benchmarksixsigma.com/forum/business-excellence-dictionary-glossary/ along with the related term

Overall Equipment Effectiveness / Overall Equipment Efficiency

OEE measures the utilization of a machine. It is a ratio of the parts produced vs the theoretical capacity.

Causes of OEE

·       Availability. Availability Losses can be due to planned maintenance, unplanned repairs, breakdowns, material shortage, changeovers, lack of transport for finished goods, absence of operator, etc.

·       Performance. Speed Losses are reduced rate of production due to wear and tear, poor maintenance, idling, lack of training leading to incorrect operation, wrong settings, etc.

·       Yield. Quality Losses are losses due to defects. These wastages can be in the form of scrap, rework, and start-up losses.

Example.

·       Theoretical OEE – 100 parts per hour

·       Availability Losses – 5 parts per hour

·       Speed Losses – 10 parts per hour

·       Quality Losses – 15 parts per hour

·       Good parts produced – 70

·       OEE – 70%

TAKT Time

Takt is a musical term. In German it means beat. It is the rhythm/rate at which production needs to be paced in order to meet customer demand. It is measured in Time/Unit. It helps in planning the resources such as employees, machines, raw material, transport, storage, etc with respect to the required production. Customers, transporters, employees, etc., can be given an accurate estimate of when to expect the finished goods. The Takt time changes as the business grow, hence necessary action such as increasing capacity will need to be taken to stay ahead of demand.

Takt Time = Total Available Production Time/Customer Demand

Example

Total Available Production Time/day = 480 Minutes

Cycle Time

Cycle Time is the time spent on a specific task for one unit. Time/Unit

Example 1. Unbalanced Line Cycle Time.

·       Cycle Time Task A = 30 sec/part,

·       Cycle Time Task B = 60 sec/par - Bottleneck,

·       Cycle Time Task C = 15 sec/part,

·       Cycle Time Task D 15 sec/part

·       Throughput without OEE = 60 parts/hour

·       Target Cycle Time = 60 Sec x 0.8 OEE = 48 Sec

·       Throughput with OEE (80%) = 3600/48 = 75 Parts Per Hour

Example 2. Balanced Line Cycle Time.

·       Cycle Time Task A = 30 sec/part,

·       Cycle Time Task B1 = 30 sec/part,

·       Cycle Time Task B2 = 30 sec/part,

·       Cycle Time Task CD = 30 sec/part

·       Throughput without OEE= 120 parts/hour

·       Target Cycle Time = 30 Sec x 0.8 OEE = 24 Sec

·       Throughput with OEE (80%) = 3600/24 = 150 Parts Per Hour

The target cycle time for a process is Takt Time multiplied by the OEE

If the Target Cycle Time for a process is optimized without taking into consideration the reduced production due to OEE losses, it is likely that the customer demand is not going to be met.

For the customer demand to be met taking into consideration OEE losses the

·       Average Output >= Average Customer Demand or

·       Target Cycle Time <= Takt Time x OEE

This is illustrated in the examples above

References

https://www.benchmarksixsigma.com/forum/topic/36096-overall-equipment-effectiveness-oee/#comment-50835

https://www.allaboutlean.com/oee-definition/

https://www.allaboutlean.com/line-balancing-3/

 

 

The Takt Time, Cycle Time, and the OEE are extremely core to lean manufacturing, aimed at eliminating wastes, maximizing the productivity of a production process, and thereby reducing the duration within the production process and the overall lead time.

Takt Time

Takt time is the required rate of production to match the demand or the maximum acceptable time to meet the demands of the customer.

 

 

Cycle Time

Cycle time is the actual rate of production or in other words, it is the amount of time it takes to complete a specific task from start to finish. 

 

 

 

OEE (Overall Equipment Effectiveness)

OEE is a measure of the efficiency of a manufacturing operation as compared to its full potential.

 

 

 

By this understanding, given the OEE and Takt time (required rate of production), the Target Cycle time can be derived.

 

An Example:

Given that the required production rate is 1,000 units per day with 10 hours per day production time (or 36,000 seconds). This gives a Takt time of 36 seconds per unit (36,000 secs/ 1,000 parts per day).
 

Also, given the measured OEE is 75%, then a (Target) Cycle time of 27 seconds per unit (36 seconds x 75%) will be required to ensure a Takt Time of 36 seconds per unit.

Cycle time” can mean the total time elapsed between Order placed and received by customer.

 

Takt Time : Available Minutes for Production / Required Units of Production = Takt Time

 

Overall Equipment Efficiency (OEE)  = Availability * Performance * Yield

 

The target cycle time for all processes is takt time multiplied by the OEE. Per the statement if I can use the example, your takt time is 100 seconds, and your OEE is 95%, then all processes have a target cycle time of 95 seconds. Which is very opt basis your process dynamics. If your processes are doing great has no buffers or process challenges then your process OEE would be close to 100% then your calculated Takt time becomes your target cycle time.

 

To elaborate more you have processes where we know that the OEE is different because of the process dynamics, which is very key to calculate the target cycle time.

Overall equipment effectiveness (OEE) is a term used to evaluate how efficiently a manufacturer's operation is being used. In other words, overall equipment effectiveness helps us in notice a problem in our operations, identify which percentage of manufacturing time is productive and fix it while giving us a standardized gauge for tracking progress. The goal for measuring our OEE is continuous improvement.

 

 

By optimising OEE, we can increase capacity, reduce costs, improve quality, and/or increase efficiencies in our production lines.

OEE stands for “Overall Equipment Effectiveness”. In short, OEE is a key performance indicator (KPI) that compares our equipment’s ideal performance to its real performance. 

It is a quantifiable (i.e., uses numbers) way to find out how well our equipment, people, and processes do their job by measuring:

• available time/uptime (availability)
• maintaining speed and consistency (performance)
• producing few defects (quality)

OEE uses productivity data to find the percentage of good production time on an asset. That means that each piece of equipment gets its own OEE score. 

 

Takt time is the rate at which we need to complete a product in order to meet customer demand.

 

Takt Time = (Available Working Time Per Day)/Customer Demand Per Day

 

While scoring each machine may sound putzy, it is worth the effort. OEE measures the machine’s productivity, yes. But it also takes into account the humans that run them. We know that machines aren’t always the problem. Staff and processes are just as likely to lower productivity.

Johanan and Priyanka have given relevant examples for explaining the statement. The winning answer has been provided by Johanan.