OVERALL EQUIPMENT EFFETIVENESS (OEE)
There's been a long parade of manufacturing buzzwords and systems over the years. As you are all too aware, many have been little more than a waste of time, energy and money for you and your already overworked staff.
But Overall Equipment Effectiveness (OEE) is different. OEE truly reduces complex production problems into simple, intuitive presentation of information. It helps you systematically improve your process with easy-to-obtain measurements.
What is OEE?
OEE is a "best practices" way to monitor and improve the effectiveness of your manufacturing processes (i.e. machines, manufacturing cells, assembly lines).
OEE is simple and practical. It takes the most common and important sources of manufacturing productivity loss, places them into three primary categories and distills them into metrics that provide an excellent gauge for measuring where you are - and how you can improve!
OEE is frequently used as a key metric in TPM (Total Productive Maintenance) and Lean Manufacturing programs and gives you a consistent way to measure the effectiveness of TPM and other initiatives by providing an overall framework for measuring production efficiency.
Fast Track Roadmap
This can be broken down into "three easy pieces"
OEE Factors introduces Availability, Performance, and Quality...the metrics that you will use to measure your plant's efficiency and effectiveness.
World Class OEE introduces the general OEE calculation and what is considered to be truly world class OEE. This is your goal!
Calculating OEE illustrates how the three OEE Factors are calculated and breaks them into the specific elements that are required to develop the OEE percentage. A real-world example is given to demonstrate the mechanics of a typical OEE calculation.
OEE Factors
Where Do We Start?
OEE begins with Planned Production Time and scrutinizes efficiency and productivity losses that occur, with the goal of reducing or eliminating these losses. There are three general categories of loss to consider - Down Time Loss, Performance Loss and Quality Loss.
Availability
Availability takes into account Down Time Loss, which includes any Events that stop planned production for an appreciable length of time (usually long enough to log as a track-able Event). Examples include equipment failures and material shortages etc. The remaining available time is called Operating Time.
Performance
Performance takes into account Performance Loss, which includes any factors that cause the process to operate at less than the maximum possible rate, when running.
Quality
Quality takes into account Quality Loss, which accounts for produced pieces that do not meet quality standards.
Quick Review
Now that you have taken a look at how the factors that contribute to OEE Losses are developed we can quickly review the key points.
OEE Factor
Availability is the ratio of Operating Time to Planned Production Time
100% Availability means the process has been running without any recorded stops.
Performance Loss is calculated as the ratio of Actual Run Rate to Ideal Run Rate.
100% Performance means the process has been consistently running at its theoretical maximum speed.
Quality loss is Calculated as the ratio of Good Pieces to Total Pieces.
100% Quality means there have been no reject or rework pieces.
As you can see, the core concepts of OEE are quite simple and really help to focus on the underlying causes of productivity loss.
World Class OEE
OEE is essentially the ratio of Fully Productive Time to Planned Production Time. In practice, however, OEE is calculated as the product of its three contributing factors:
OEE = Availability x Performance x Quality
This type of calculation makes OEE a severe test. For example, if all three contributing factors are 90.0%, the OEE would be 72.9%. In practice, the generally accepted World-Class goals for each factor are quite different from each other, as is shown below:
World Class
Availability 90.0%
Performance 95.0%
Quality 99.9%
OEE 85.0%
Of course, every manufacturing plant is different. For example, if your plant has an active Six Sigma quality program, you may not be satisfied with a first-run quality rate of 99.9%.
Worldwide studies indicate that the average OEE rate in manufacturing plants is 60%. As you can see from the above table, a World Class OEE is considered to be 85% or better. Clearly, there is room for improvement in most manufacturing plants!
Calculating OEE
The Formulas
As described in World Class OEE, the OEE calculation is based on the three OEE Factors, Availability, Performance, and Quality. Here's how each of these factors is calculated.
Availability
Availability takes into account Down Time Loss, and is calculated as:
Availability = Operating Time / Planned Production Time
Performance
Performance takes into account Performance Loss, and is calculated as:
Performance = Actual Run Rate / Ideal Run Rate
Quality
Quality takes into account Quality Loss, and is calculated as:
Quality = Good Pieces / Total Pieces
OEE
OEE takes into account all three OEE Factors, and is calculated as:
OEE = Availability x Performance x Quality
The beauty of OEE is not that it gives you one magic number; it's that it gives you three numbers, which are all useful individually as your situation changes from day to day. And it helps you visualize performance in simple terms – a very practical simplification.