Is it possible to use one primary KPI to measure and improve bulk terminal performance? We talked to an expert to find out how terminal operators can source reliable data to calculate Overall Equipment Effectiveness (OEE) and apply Root Cause Analysis techniques to deliver performance efficiencies in excess of 80%.
Based on a conversation between David Trueman, TBA, and Lukas Paul
Bulk terminals come in many different sizes and handle many different materials. Their performance determines how long a ship will take to load or unload and how quickly materials can be delivered along the supply chain. How can these bulk terminals measure their performance and identify key areas for improvement?
Overall Equipment Effectiveness (OEE) is an easy-to-understand KPI used to drive bulk terminal performance. David Trueman, Managing Director, TBA Doncaster Ltd, states, “OEE focuses on the areas of the operation where we can bring improvements that have a profound influence on the effectiveness of the operations regardless of the size of the terminal and the materials it processes.”
Overall Equipment Effectiveness (OEE) is a measure of the percentage of time that is truly productive. To achieve a score of 100% means that the equipment is always available and always running at the design capacity, which is impossible to achieve in practice. Nevertheless, this KPI is very effective for identifying where improvements can be made and for comparing the performance of bulk terminals. OEE gives an accurate measure of bulk terminal performance regardless of the location, size, or application.
“There are several factors that make up the OEE calculation with each factor yielding valuable information about the equipment effectiveness and providing clues as to where improvements can be made,” explains David Trueman.
The formula for calculating OEE is shown below along with more details about each factor:
OEE = Availability x Performance x Quality
Availability is a measure of the actual production time of a bulk terminal as a percentage of the planned production time. This factor takes into account anything that makes the facility unavailable for production, including unplanned stops due to equipment failure or material shortages as well as planned stops for changeover. Some bulk terminals also include planned maintenance activities in their availability loss because these stops still make the facility unavailable for production.
Availability = Actual Production Time / Planned Production Time
Performance is a measure of the current run rate of a bulk terminal as a percentage of the ideal run rate. This factor takes into account anything that affects the ability of the terminal to maximise run rate, including equipment wear, substandard materials, misfeeds and jams.
Performance = Current Run Rate / Ideal Run Rate
Running an operation too close to the limits may result in quality problems with the product. This is unlikely in bulk terminal operations and the quality factor is most often excluded from bulk terminal calculations of OEE.
A live OEE dashboard for a typical bulk terminal is shown below.
Image: David Trueman / TBA Doncaster Ltd
Assuming some typical numbers for a bulk terminal, we could calculate a sample OEE as follows:
Image: David Trueman / TBA Doncaster Ltd
Trueman says: “Experience shows that an OEE of 60% is a reasonable benchmark to expect when first measuring this KPI. However, root cause analysis can help to address the biggest contributing factors and drive improvements.”
Root Cause Analysis can be described as “peeling the onion” by asking questions that identify the basic cause of availability or performance loss. The first layer may identify that availability and performance are equally contributing to the OEE. Peeling back another layer may identify that the largest contributor to availability is equipment breakdown and the largest contributor to performance is “Actual Speed Loss” as shown in the diagram below:
Image: David Trueman / TBA Doncaster Ltd
Once bulk terminal operators identify the main contributors to a low OEE, they can develop action plans to address these issues. This is known as capturing the low hanging fruit. “These few items have the potential to make a large impact on OEE,” says Trueman. “Using RCA, bulk terminals can improve their OEE to approximately 80%.” Of course, any improvements in OEE must also deliver a benefit to the business Profit and Loss, which is the ultimate measure of any business performance.
Analysis of many bulk terminal RCAs over several years reveals some common contributors to a lower OEE. One or more of these contributors are often identified as the low hanging fruit to improve OEE.
The value of an OEE calculation depends on the quality of information used for that calculation. High quality data gives bulk terminal operators a confidence to use the OEE as an accurate measure of performance and as a means to identify low hanging fruit. Data on bulk terminals come from various sources and some of those sources are more reliable than others as shown in the table below:
| Source | Description | Timing | Trustworthiness |
| System data | Captured from automated system | Real-time | High quality and consistent data |
| User generated | Mobile applications | Real-time | Using preconfigured standard entries improves the quality of this data |
| User generated | Handwritten logs | After the fact | Poor quality as each operator describes the data in their own words after the activity is complete. |
The closer to real-time and the more automated the data collection, the better the quality of data for OEE calculations. It is also preferable to use bulk terminal operators for data capture than third party contractors because third party contractors do not have a vested interest in the results, and they record data from a different perspective to the bulk terminal operator.
David Trueman highlights the value of real-time data when he states, “OEE dashboards using real-time data from the automation system provide updates to OEE, availability and performance every five minutes giving bulk terminal operators almost immediate notification of factors affecting the effectiveness of their operation.”
OEE is a high level KPI that measures the performance of any bulk terminal by evaluating the equipment availability and run rates. Root Cause Analysis can help operators to capture the low hanging fruit and achieve an OEE of 80%. This improvement will directly influence the Profit and Loss (P&L), which is the ultimate KPI of business success.
For more insights into development opportunities and optimising OEE performance in bulk terminals, watch our on-demand webinar: PortZone Episode 8: Using KPIs to optimise bulk terminal performance
