Every machine in a factory has a theoretical capacity — what it could produce if it ran at full speed, all the time, making only good parts. In reality, most machines in small and mid-sized factories deliver well under that capacity. The gap isn't a mystery: it falls into six well-known categories called the six big losses. Understanding them gives you a structured way to find hidden capacity without buying new machines.
The six big losses at a glance
| Loss | OEE factor | Typical examples |
|---|---|---|
| 1. Breakdowns | Availability | Motor failure, hydraulic leak, tool breakage, electrical fault |
| 2. Setup and adjustment | Availability | Changeovers, die or mould change, first-off approval, warm-up |
| 3. Small stops and idling | Performance | Jams, sensor trips, waiting for material, short operator absences |
| 4. Reduced speed | Performance | Running below rated speed due to wear, material or habit |
| 5. Start-up rejects | Quality | Scrap during warm-up or after changeover until stable |
| 6. Production rejects | Quality | Scrap and rework during stable running |
For how these combine into a single OEE figure, see what is OEE and how to calculate it.
Loss 1: Breakdowns
Breakdowns are the most visible loss: the machine stops and needs repair. They are measured as the time from failure until the machine is producing again, including waiting for maintenance and parts. Reducing them requires preventive maintenance, operator checks, spare parts readiness and root-cause analysis of repeat failures. Measuring mean time between failures (MTBF) and mean time to repair (MTTR) per machine shows where to focus. See how to calculate MTTR and MTBF.
Loss 2: Setup and adjustment
Setups include everything from the last good part of one job to the first good part of the next: removing tools, fitting new ones, adjusting, first-piece inspection and approval. In high-mix factories, setups often consume more time than breakdowns. The SMED method — separating internal and external setup tasks, standardising and simplifying — routinely cuts setup times by half or more. See SMED: reduce changeover time.
Loss 3: Small stops and idling
Small stops last seconds or a few minutes: a jammed part, a sensor trip, an operator stepping away, waiting for a forklift. Individually trivial, they can add up to hours per shift. Because they are short, operators rarely record them, which is why they are often the most underestimated loss. Machine signals or simple counters are the best way to see them; once visible, the causes are often easy to fix — a guide rail adjustment, a better feeder, materials staged at the machine.
Loss 4: Reduced speed
Machines often run slower than their rated speed. Sometimes there is a good reason — a material that needs lower speed — but often it's habit, an unresolved quality issue or wear. Speed loss is measured by comparing actual output with ideal cycle time. Setting correct ideal cycle times per part and machine is the first step; investigating why machines run slower is the second.
Loss 5: Start-up rejects
After a changeover, warm-up or long stop, the first parts are often out of specification until the process stabilises. Recording these separately from production rejects shows how much material and time is lost at every start-up — which strengthens the case for better setup methods and process settings.
Loss 6: Production rejects
Scrap and rework during stable production reduce quality rate and waste material, machine time and labour. Recording rejects by defect type, machine, part and shift reveals patterns. Root-cause tools such as 5 Why and 8D, together with SPC, help reduce them. See 5 Why root cause analysis.
Measuring the losses
The losses can only be reduced if they are measured consistently. A practical approach for most SMEs:
- Define stop reason codes grouped by loss category. See designing downtime reason codes.
- Have operators record stops longer than a set threshold — say five minutes — with a reason on a tablet.
- Capture part counts and rejects by defect type at shift end or per job.
- Set ideal cycle times per part per machine.
- Add machine signals for run/stop and counts where possible, to capture small stops and speed accurately.
A loss Pareto
Once data is flowing, rank the losses by hours lost per week, by machine and overall. A Pareto chart usually shows that two or three losses on a few machines account for most of the gap. That's where improvement teams should start — not with the loss that's easiest to talk about.
An example: where the capacity went
A sheet metal fabricator believed its press brakes were at capacity and was considering buying another. After four weeks of recording stops and setups on tablets, the data showed availability was reasonable but setups took an average of forty minutes, with eight to ten setups per shift. Small stops waiting for material and drawings added another hour per shift. A SMED workshop, pre-staged tooling and material carts, and drawings on the machine tablet recovered more than an hour and a half per machine per shift — more than the capacity the new press brake would have added.
Common mistakes
- Focusing only on breakdowns because they are the most visible.
- Measuring OEE as one number without breaking it into losses.
- Reason codes that are vague ("other", "miscellaneous") and hide the real causes.
- Collecting data but never holding regular reviews to act on it.
How software helps
OEE and downtime software captures stops, reasons, counts and rejects — from operators, machines or both — and shows losses by machine, shift, product and category in real time. That turns the six big losses from a theory into a weekly improvement list. See OEE and machine monitoring software.
Talk to us about measuring the losses in your factory.
Frequently asked questions
What are the six big losses?
Equipment breakdowns, setup and adjustment, small stops and idling, reduced speed, start-up rejects and production rejects. They map to OEE's availability, performance and quality factors.
Which loss is usually the biggest?
It varies by factory, but in many SMEs setups and small stops together are larger than breakdowns — they are simply less visible because nobody records them.
Do we need machine sensors to measure the losses?
No. Operators can record stops, reasons and rejects on a tablet. Sensors add accuracy for short stops and speed losses where machines or add-on devices allow it.
How quickly can losses be reduced?
Simply measuring them usually leads to early improvements within weeks. Structural fixes such as SMED or maintenance changes take longer but have lasting effect.
Is this only for high-volume factories?
No. Job shops and batch manufacturers suffer the same losses; setups are often the largest loss in high-mix environments.
