**Q: Why is the ‘Ideal Cycle Time’ (=’Standard’ or Theoretical maximum speed) so important? Why can’t we just use our current running speed, we go very fast!**

Daniel Högfeldt • This is probably the most important part of the OEE calculation. The formula that gives the performance always includes an ideal cycle time or an ideal rate. To get the cycle time from the rate just divide 1 by the rate and vice versa.

The standard cycle time or speed rate should be the best speed or cycle time achievable for that particular job. For instance the best cycle time achieved in the past could be a good standard cycle time to use in the OEE calculation. If the machine after a while has to run slower due to for instance an old die, then that would show in the performance rate as it would drop. Changing the standard would just hide the fact that the machine is running slower than it theoretically could.

If no standard cycle time or rate is available for the job, a generated value from the best couple of days from the past year could be used. That way you would know that that rate once have been achieved and therefore it should be achievable again.

It is very important to find a good standard rate to get a good OEE value, since in its basic form, OEE can be measured just by using the formula: OEE = Good Pieces Produced * Standard Cycle Time / Loading Time. That formula would give the same result as the three ratios; Availability, Performance Efficiency and Quality rate multiplied together. All information needed for the simplest OEE calculation is:

- How many products meeting specifications was made?
- How much time was scheduled or allowed for production of that product? (Loading Time)
- What is the ideal or expected cycle time or speed for units of that product?

## Example: OEE calculation using its simplest form.

A. Loading Time : 360 Hrs

B. Good parts made: 15.000 Parts

C. Standard Cycle Time: 0.9 min/part

OEE (B*C/A) = 15000*0.9/(60*360)=0.625 360 hours 15000 parts 0.9 min/part

62.5%

This is an easy way of checking if the OEE calculation made was accurate or not, but it does not reveal where the lost time was in the process. It could be a way for plants without good data collection to get accurate OEE.

For getting an accurate OEE the key elements are how to define Loading Time and that a good Standard Cycle Time is chosen. If the cycle time is set to high according to what it is achievable of doing then the risk is that wasted time is overlooked in downtime or/and producing scrap. For example, if a machine have an OEE of 90% that looks very good. When looking at the three ratios it could look like this if a too high standard cycle time was used: Availability = 70%, Performance Efficiency = 143% and Quality Rate = 90%. This would mean that during a shift of 8 hours the machine was down for 144 minutes and was producing scrap for 33.6 minutes (100 scrap parts * 20.16 sec/part actual cycle time) with a total of 177.6 minutes of wasted time. If only looking at the OEE the wasted time would be 480 minutes * 0.2 = 96 minutes of wasted time. That would mean 81.6 minutes of “forgotten” waste.

If instead the standard cycle time was corrected to a performance efficiency of 100% (which might not be true, but it is still more accurate than 143% and could be corrected further as time will tell what the standard time should be), in this case that would mean 20.16 seconds per part. Then the OEE would be: 70% * 100% * 90% = 63%. That would mean a lost time of 480 minutes * (1-0.63) = 177.6 minutes. In real life the machine might be able to run at an even faster speed and then there would be even more losses in time not revealed because of the standard cycle time was set to high (speed rate was set to low).

The conclusion of this is that it is very important to have a correct ideal cycle time to compare to the actual cycle time to get a good performance result. For every different job the machine is running a different ideal cycle time has to be used. Another approach could be to use the same cycle time (best cycle time) for the entire product family run on the machine. On those parts where the rate has to be lowered the reason should be pointed out in a comment column on the OEE sheet, so the loss due to difficult parts to manufacture can be recognized.

*Master’s Thesis: PLANT EFFICIENCY A value stream mapping and overall equipment effectiveness study*