Overall Equipment Effectiveness Analysis Using Discrete-event Simulation: A case from Table Tennis Table Manufacturer

Abstract

Make-to-order (MTO) manufacturing strategy is typically run to manage excess inventory problem which is commonly occurred in the traditional make-to-stock strategy. However, to be successfully implemented, the MTO strategy requires a proactive capacity management approach to evaluate the performance of production facilities. This lack of capability may result in difficulty to fulfill customer orders and, at the end, decrease customer satisfaction. This research proposes to analyze such issues experienced in MTO based-table tennis table manufacturing company in Indonesia striving to fulfill customer orders and arrange production schedule when demand is of a significant increase, due to occurrence of production losses. A discrete-event simulation is developed to model the production process under consideration and Overall Equipment effectiveness (OEE) method is then applied to evaluate system performance in terms of availability, performance, and quality criteria. The result revealed that the actual OEE value is lower than that of targeted value set by the company. Among those OEE criteria, the performance rate was found to lower overall OEE value since the cycle time is quite long affected by the loss in terms of machine idling, stoppage, and operating speed loss.