OEE is a measure of performance, but where exactly is a business losing efficiency? This is a question many factories are struggling to answer. Currently, factories have begun implementing OEE (Overall Equipment Effectiveness) monitoring to assess the operational efficiency of their production lines. However, many businesses only know that their OEE is low without accurately identifying the cause of the efficiency loss.

The production line is still operating, output is still meeting targets, but OEE is continuously decreasing. The cause often stems from small losses occurring daily and accumulating over time.

In the Total Productive Maintenance (TPM) model, these causes are called the Six Big Losses – a crucial foundation for businesses to identify and improve production efficiency.

I. What is OEE and its three constituent components

OEE (Overall Equipment Effectiveness) is an indicator that assesses the efficiency of equipment and production lines in a manufacturing plant based on three core components:

1. Availability

Measures the ratio of actual equipment operating time to planned production time. This indicator is affected by:

• Unplanned machine downtime
• Setup and changeovers
• Prolonged maintenance

2. Performance

Evaluates the actual operating speed compared to the design speed of the production line. Performance decreases when:

• Machines run slowly
• Micro-downtime occurs frequently
• Operators require frequent intervention

3. Quality

Measures the percentage of products that meet standards on the first production run. This index is affected by:

• Defective products
• Rework
• Scrap products
• Startup errors

These three components combine to form the overall OEE index, accurately reflecting the operational efficiency of the plant.

II. What are the Six Big Losses?

The Six Big Losses is a model developed in Total Productive Maintenance (TPM) to categorize the main causes of reduced OEE (Outstanding Effective Productivity). Instead of just looking at end-of-day output, this model helps businesses pinpoint exactly where and why their production lines are losing efficiency.

Availability Loss Group

1. Unplanned Breakdown Losses

This is the most noticeable type of loss, occurring when equipment stops operating due to:

• Mechanical failures
• Electrical failures
• Sensor failures
• PLC or control equipment malfunctions

Breakdowns often directly impact production output and delivery schedules.

2. Setup & Adjustment Losses

In FMCG, Packaging, or F&B factories, production lines frequently require changes to SKUs, packaging, or product sizes.

Setup and changeover processes reduce actual production time and directly impact availability if not optimized.

Performance Loss Group

3. Micro Downtime (Idling & Minor Stops)

These are short stops lasting only a few seconds or minutes, such as:

• Packaging jams
• Sensor resets
• Product adjustments
• Operator troubleshooting of minor errors

Although it’s difficult to detect with manual reporting, when accumulated throughout a production shift, micro downtime can become the biggest loss on the production line.

4. Reduced Speed ​​Losses

The production line does not always run at its designed speed. This can be caused by:

• Equipment degradation
• Suboptimal settings
• Concerns about potential errors
• Slow operation to ensure stability

This reduces performance and consequently lowers OEE.

► Read more: Why isn’t the production line running at its designed speed?

Quality Loss Group

5. Startup Rejects

After each setup or changeover, the production line usually needs a period of time to stabilize. During this period, the following may occur:

• Incorrect dimensions
• Incorrect label placement
• Incorrect weight
• Unsatisfactory packaging

These products reduce quality from the very beginning of the production shift.

6. Production Rejects

These are errors that occur when the production line is operating normally, such as:

• Defective products
• Defective packaging
• Leaks
• Short material supply
• Incorrect specifications

In addition to reducing quality, these errors also cause material waste and increase production costs.

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III. Why do factories often fail to see these losses?

Many businesses still manage production using Excel spreadsheets, end-of-shift reports, or manual record-keeping methods. These methods only reflect general indicators such as total output, total operating time, or major line failures.

Meanwhile, significant losses such as micro-downtime, reduced operating speed, or recurring errors are often not fully recorded or are difficult to analyze.

As a result, businesses know their OEE (Operating Effective Equipment) is low but cannot pinpoint the exact cause of the inefficiency, leading to unfocused and ineffective production improvements.

► Read more: Why do many factories still manage production using Excel?

IV. How to Identify Which Losses Are Most Affecting Your Plant

To effectively improve OEE, businesses need to answer the following questions:

• Where are the production lines stopping?
• How many downtimes are occurring?
• Is the machine running at its designed speed?
• Which process is causing the bottleneck?
• What types of errors are occurring most frequently?

When data is collected in real time, managers can quickly identify the groups of losses causing the greatest impact and prioritize improvements accordingly.

V. The Role of Automated OEE Measurement Systems in Detecting the Six Big Losses

Automated OEE measurement systems collect data directly from PLCs, sensors, and production lines to continuously record:

• Real-time availability
• Actual performance of each line
• Quality by SKU
• Downtime and micro-downtime
• Top causes of machine downtime
• Bottleneck of the entire production line

Instead of waiting for end-of-shift reports, businesses can detect problems as soon as they occur and make decisions more quickly. This is also the foundation of the Data-driven Manufacturing model, which many modern factories are adopting to improve OEE and optimize production efficiency.

VI. Conclusion

Six Big Losses is a crucial model that helps businesses understand the causes of OEE loss and production efficiency. By correctly identifying loss groups, businesses can:

• Reduce downtime
• Minimize micro-downtime
• Improve operating speed
• Reduce error rates
• Increase OEE and production efficiency

Instead of just monitoring end-of-day output, measuring and analyzing data in real time will help businesses detect losses earlier and improve efficiency more effectively. Download the free OEE assessment checklist. Quickly assess the level of efficiency loss on your production line and discover how the i-OEE system helps monitor Six Big Losses in real time.

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