In factories, it is crucial to constantly measure and improve productivity to remain competitive, which is why it is important to measure certain indicators such as TRS and the TRE. A key metric to achieve this is the Overall Yield Rate (OER), a performance indicator that allows factories to optimize their productivity and maximize their profits.
What is the Total Rate of Return?
Definition of OEE
THE Overall Rate of Return (ORR)), Or Overall Equipment Effectiveness (OEE) in English, is a performance management method that evaluates the productivity production machines by taking into account three main components: the availability, there performance and the quality. It is a holistic method which aims to minimize losses and waste for maximize productivity and production efficiency.
The components of the TRG
THE TRG consists of three main components:
- The availability : This is the proportion of time a machine is operational compared to the total time available for production.
- The performance : It is a measure of the speed at which a machine produces relative to its maximum theoretical speed.
- The quality : This is the proportion of products meeting quality standards among all products produced.
OEE vs. other production performance measures
So why use the TRG instead of other production performance measures?
The key lies in its ability to take into account multiple aspects of performance in a single measurement. OEE is an overall performance indicator which takes into account the availability of machines, their performance and the quality of finished products. Unlike other performance measures, OEE can help identify specific areas that need improvement to optimize overall productivity.
How to calculate the OEE?
The three factors for calculating OEE: availability, performance and quality
THE TRG is calculated by multiplying the three components of performance: availability, there performance and the quality.
- The availability : It is calculated by dividing the effective operating time of a machine by the total time available for production. For example, if a machine is operational for 7 hours out of a total of 8 hours, the availability is 87.5%.
- The performance : It is calculated by dividing the actual production speed by the maximum theoretical speed. For example, if a machine produces 100 units per hour, but it is designed to produce 120 units per hour, the performance is 83.3%.
- The quality : It is calculated by dividing the number of products conforming to quality standards by the total number of products manufactured. For example, if a machine produces 1000 units of which 50 are defective, the quality is 95%.
To obtain the ORR, these three factors are multiplied and it is generally expressed as a percentage.
For example, if availability is 87.5%, performance 83.3% and quality 95%, the ORR is 0.875 * 0.833 * 0.95 = 0.69, or 69%.
Interpretation of the TRG
A TRG of 100% indicates that production is perfectly efficient, without downtime, at maximum speed and without waste. In reality, such a score is virtually impossible to achieve, as there will always be unforeseen events, performance variations and defective products. However, a higher ORR indicates a best overall performance from production.
How to use OEE to optimize the productivity of your factory?
Identify bottlenecks and areas for improvement
One of the most important uses of TRG is to identify the bottlenecks and areas for improvement in your production process. By evaluating each component of OEE (availability, performance and quality), you can identify areas where your production is less efficient and put in place measures to remedy this.
Track improvements over time
THE TRG is a useful tool for tracking productivity improvements over time. By regularly measuring OEE, you can see how your improvement initiatives are affecting overall performance of your production.
Make informed decisions
Finally, OEE can help make informed decisions about the management of your plant. For example, if a machine's OEE is consistently low, this could indicate that it is time to replace or repair it. Or, if the OEE of a production line is high, it could justify investing more resources into it.
Conclusion
The Overall Rate of Return is a central pillar in the quest to optimize industrial productivity, providing a three-dimensional analysis of performance through availability, performance and quality. It proves to be a valuable diagnostic tool for identifying areas for improvement, monitoring progress and guiding managerial decisions, thus contributing to better resource allocation and operational efficiency. In the context of Industry 4.0, TRG is the essential companion for companies aspiring to operational excellence, highlighting the path towards more agile production, reduced costs and increased competitiveness in the market.
