Finding the Six Losses
The Hunter article refers to the six production losses. GP Deltapoint often uses these measures with clients to improve productivity and profits quickly and directly. Often these losses are referred to as the "Six Big Losses" and link Total Productive Maintenance activities with the OEE (Overall Equipment Effectiveness) measure.
OEE is an enormously powerful operating measure. It is the ratio of fully productive time to planned production time. To calculate it, multiply availability, performance, and quality percentages together to arrive at a total score against potential throughput. World-class availability is 90% or better. World-class performance is 95% or better and world-class quality is 99.9% or better. Multiplied together, world class OEE is 85% or better. Most manufacturing operations hover around 60% or so. Availability is the proportion of time that a process is operating. Performance is the speed versus full potential and quality is the percentage of customer-acceptable products produced.
In practice there are six main reasons that OEE is not world class in a particular situation: the six production losses.
The first loss is breakdowns. These are unplanned stoppages in production and often arise from equipment failures. Breakdowns affect availability.
The second loss is setup and adjustment. This affects availability, too, and generally arises from changeovers, material and operator shortages, and warm-up time.
The third loss is small stoppages and idling, which affect performance.
The fourth loss is reduced speed (due to rough running and equipment wear), which directly affects performance.
The fifth and sixth losses affect quality. They are startup rejects and production rejects. The difference is only in the time they are detected: during regular production or during warm-up, startup, or early production.
Equipment uptime tracking and the SMED techniques address availability. Cycle time analysis helps to pinpoint performance shortfalls while counting rejects and conducting root cause analysis help to reduce quality shortfalls. Of these, SMED changeover techniques are particularly powerful and increasingly relevant in a world of shortened lead times and mass customization. Our clients find that patient application of standard methods and constant, consistent data tracking are the surefire ways to find those losses.
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