The use of non OEM parts cannot automatically void a warrantee

Can using non OEM parts void a warrantee?   The answer is maybe, but probably not. The Magnuson-Moss Warranty Act regulates warrantees for both industrial and individual consumers.  The act specifically restricts tie-in requirements.  A manufacturer cannot require specific maintenance or parts usage, unless the company provides those services or materials during the warrantee period.

However, why would you not follow recommended servicing guidelines, or use the OEMs proprietary parts?  The reason that you purchased capital equipment from the OEM is because the product fit your requirements.  Keeping it in top condition should be a high priority.

Use OEM materials that are proprietary to keep your equipment in top shape.  If materials are commercially available materials that the OEM has rebranded, feel free to use the “generic” version of that part.  Some larger companies are requesting that OEMs provide the purchasing information for non-proprietary materials.  Even if you don’t have the buying power of the large companies, it is always a good idea to ask for a complete bill of materials.

So, using non-OEM parts will not automatically void your warrantee.  It is recommended that you have the warrantee period maintenance discussion with your sales rep at the time of purchase.  Understanding your rights and their rights under the Magnuson-Moss act should make the discussion very productive.

It is also recommended to use a warrantee tracking process, to get the most out of your warrantee.  Many CMMS’s allow for tracking warrantees.  If yours doesn’t, set up a spreadsheet or database to track warrantees and dates.   Assign someone to monitor the warrantee periods and ensure that if there are problems with equipment during the warrantee timeframe, that the OEM is notified and allowed to correct defects or provide materials as required.  The money you save by properly administering warrantee claims for equipment should offset the time of the individual monitoring the warrantee periods.

Overall Equipment Effectiveness (OEE)

OEE definition and formula.

Overall Equipment Effectiveness (OEE) is a measure of how well equipment is able to be utilized.

Why use OEE

  • OEE is used because it is a standardized method of measuring productivity from an equipment standpoint
  • It is an unbiased method
  • By understanding the losses experienced by the equipment we can fix them

How to calculate OEE

OEE = Availability * Performance Rate * Quality Rate

  • Availability = Time available to produce, this is reduced by planned maintenance, change overs, breakdowns, sanitation, and cleaning
  • Performance Rate = The designated speed or rate of production
  • Quality Rate = Good parts produced, or value delivered, this is reduced by defects, holds, scrap, unaccepted work

Data – where to find it; how to use it

  • Availability
    • Usually a manual calculation
    • Most often calculated for full calendar time (24×7; 5×7 – usually operational staffed time) then the unused time (usually market down time) is subtracted from total expected time.
  • Performance Rate
    • Usually calculated from run time information captured on equipment
    • It can be manually calculated but is not practical to manage using manual calcs on large scale operations
    • Theoretical performance rate must be determined and used to calculate the rate
  • Quality Rate
    • Can be calculated on the line if reject system is operational
    • Final calculations may come shifts, days, or even weeks later.  This depends on the quality system and when product is dispositioned from ‘hold’

Common problems to avoid when leveraging OEE for improvement

  1. Not counting all time on the equipment as Available time.
    • Availability can be thought of as an indication of capacity.  If planned downtime (such as that for maintenance, changeover, or sanitation) are removed from the availability calculation, then the load requirements of the equipment cannot be determined.  Therefore changes in production schedule cannot be accurately planned.
    • If 4 hours of planned maintenance is required on equipment each week, that accounts for approximately 3% of Availability.
    • Activities to reduce planned downtime are cannot be value-added if these times are not included in OEE.
      • This is an example of silo thinking.  Engineers working on reducing downtime, either by SMED activities, or instituting more condition monitoring cannot accurately account for the ROI of such activities.
      • In truth, the company will see benefits, but the battle over how the savings are accounted, and who gets to claim the reductions will overshadow the real tangible benefits.  Some will claim the engineers calculations are funny-money; operations will see a real jump in OEE, but not be able to account for the jump.
    • The purpose of OEE is to find losses, and determine if they are worth eliminating.
  2. Using OEE as a measure of people, not equipment.
    • Since equipment is in the very name of the measure, this seems obvious.  But most organizations use the OEE measure to operations, shifts, and sometimes even individuals
    • Management needs to manage.  OEE is best used as a metric to determine where to troubleshoot, but it is never a measure of people’s performance.
    • The purpose of OEE is to find losses, and determine if they are worth eliminating.
  3. Setting a specific number as an OEE goal
    • We love goals, and we love numbers.  Even “Dancing with the Stars” publishes metrics.  However, even the goal there is not to get a perfect score, but to get a better score than last week. – Oh yeah, and a better score than the competitors.
    • I’m often asked what is should a line’s OEE be.  I have spouted “80-85”, but that’s just an arbitrary number.  Who cares what the number is? 80-85% of statistics are made up on the spot (see what I did there?).
    • The purpose of OEE is to find losses, and determine if they are worth eliminating.  That’s it.  Find losses and make a determination if they are worth eliminating.  This means finding a fix for the loss and running an ROI to see if the fix is worth eliminating
  4. Taking action too early or too late to correct
    • The purpose of OEE is to find losses, and determine if they are worth eliminating.
    • Ensure that thorough troubleshooting and root cause analysis are taken on the loss investigation.  Otherwise, you will be solving symptoms, not problems.  This can happen if you react to the data too quickly.  Usually a full week to a month of data are needed to see a good pareto of the losses.
    • Waiting too long to act on the data gives the impression that it is not important.  It takes a lot of conscientious effort by operators to correctly capture and code losses.  If they do not perceive value in their efforts, the downtime coding will become generic.
  5. Not communicating with operators, maintenance, and others how the organization is using OEE and how they are a part of it.
    • Lack of communication will lead to finger pointing and suspicion.  The age old silos of maintenance and operations will use the OEE numbers to blame each other for the recorded losses.
    • Understanding losses is a positive thing.  Do not focus on the OEE number,  instead focus on the losses and how to eliminate them.  You can inspire enthusiasm and spur creative thinking in all team members when root blame is not the focus.

Example Time!pexels-photo-125514.jpeg

OEE Using a Car as an Example

Availability = Time the car is available to drive where you want

  • Reduced by Planned Downtime
    • Time to fuel up
    • Preventive maintenance** (oil changes, tire rotation, tune up, washing, …)
  • Unplanned Downtime
    • Time in shop for maintenance / repairs
    • Accidents
    • Breakdowns
  • Not reduced by
    • Time spent parked

      **Remember spending time on preventive maintenance reduces breakdowns and unplanned downtime

Performance Rate= Time spent with car at speed limit (or expected speed)

Reduced by

  • Idling car
  • Traffic problems / jams
  • Weather related bad road conditions
  • Debris, junk on the road
  • Slowing down in an unfamiliar situation

    Speeding has negative potential consequences, so it is discouraged
  • Tickets
  • Crashes from mis-matched speeds on roads
  • Equipment malfunctions (blown tires)

    Performance rate problems translate into Availability issues

    • Accidents
    • Low fuel economy causing increased fuel stops
    • Breakdowns

Quality Rate: The car performs as expected

Reduced by

  • Low fuel economy
  • Poor emissions
  • Appearance (dirty, paint chipped, rusted,…)  These can become maintenance issues, or interfere with transportation reputation
  • Inability to transport/haul/tow everything you want

So, let’s calculate the OEE for a typical week on a car.

The car is used to go to and from work 5 days per week.  Work is 25 miles from home.  It takes 1 hour to get to work and 1:06 to get home (1.1 hours).

The kids school is 1.5 miles away and the car was driven there 3 times during the week; total of 9 miles.  It took 1 hour for each round trip.

One day during the week there was a stop for fuel and a car wash.  This took 45 minutes.

Standard Performance Rate is 30 miles per hour.   (I declared that.)

There were no quality defects, as all activities performed as expected.

Availability = 100- (Total time car was occupied; 15.25 hrs)/(Maintenance time ; fuel and car wash; .75 hours)*100

Availability = 95%

Performance Rate = 100-(Total Miles/Total Hours Performing) / Standard Performance Rate)*100

Performance Rate = 100- (269/14.5)/30)*100 = 38%

Quality Rate = 100%

OEE =  95%*38%*100% = 36 %

Is 36% OEE good or bad?  The answer is NO – it is neither good or bad.

Areas of losses – potential reductions

  • Maintenance; fuel and car wash – find a faster car wash
  • Waiting for children – determine that OEE is more important and make the kids wait for the car, not the car wait for the kid.  Disclaimer: This is cruel and not to be taken seriously. The point is, this loss is not worth reducing.
  • Perform detailed analysis to improve the Standard Performance rate; make it a variable based on the type of trip.  This is similar to have a performance rate specific to a product.

The car did everything needed, the maintenance was able to be fit into the schedule. The car is not at capacity, therefore it is not value-added to improve the OEE.   So, even though the OEE was 36%, it is acceptable, because the losses were evaluated and the equipment (car) was operating within expectations.  A 36% OEE on a city bus, would likely not be acceptable.  So acceptable is relative to use/application factors.  Use OEE to find losses and determine if they are worth eliminating or reducing.  OEE is a tool, not an end product.



Competitive Advantage

The simple reality is that maintenance departments are cost centers. Meaning, you cost your company money and do not provide “value add” to the end customer: maintenance does not create salable product, your job exists solely to support salable product.
Maintenance must, therefore, be managed as a competitive advantage. By changing organizational thinking to view maintenance as a competitive advantage, more innovative ideas are implemented. To affect this shift, maintenance is measured by the value produced. First-run output becomes a direct measure of equipment capability, therefore reliability.
Reliability value is measured by the maintenance cost of the best sustainable run output. Sustainable output length is organization dependent; common timeframes include 90 shifts, 3 months, outage to outage, etc.

Reliability Value Example
Best 90 shift output = 9,000 widgets
10 hours/shift yields 10 widgets/hour
Maintenance costs for timeframe = $500,000
Maintenance cost /widget = $55.56

Whenever maintenance costs are below $55.56/widget, the company sustains a competitive advantage. That advantage can be used in profit taking, or in lowering the product price to gain market share.

Maintenance decisions are now based on cost per widget. Consider the decision to enter into Condition Based Monitoring (CBM) at monthly costs of $10,000. To be advantageous, the program must guarantee an additional 180 widgets ($10,000/55.56 dollars/widget). At 10 widgets/hour, the program must improve equipment uptime more than 18 hours/month.

Under cost center thinking, a $10,000/month CBM program would be an unlikely approval. However, when viewed under the competitive advantage model, it can be approved because there is a tangible measure of success – hours of equipment uptime.

cost center graphic

Graphic: Cost / Widget

How have you justified reliability expenditures in your organization?