What is OEE? Understanding Overall Equipment Effectiveness

What is OEE (Overall Equipment Effectiveness)?

Overall Equipment Effectiveness (OEE) is a measure of how well a manufacturing process is used in regard to the total potential. It shows the percentage of productive production time at work. OEE is the most effective metric to identify gaps, determine progress and improve the productivity of manufacturing equipment, and eliminate waste. OEE provides insight on how to better ensure quality control.

In any manufacturing setup, OEE is a highly effective Business Performance Management Tool, which critically evaluates how effectively a manufacturing operation is utilised.

OEE can be used on single and multiple production lines and from one to a number of plants in a group-wide structure. It is suitable for all types of manufacturing processes including discrete, continuous or bulk.

Put simply “OEE measures the gap between the actual performance and the potential performance of a manufacturing unit”, and an OEE Software tool, like PerformOEE?, allows you to automatically collect this manufacturing performance data.

What Does OEE Mean?

Overall equipment effectiveness (OEE) is a principal standard for the measurement of manufacturing productivity. It can help you to gain a better understanding of your plant floor metrics so that you can improve the quality score of your manufacturing performance by analyzing and resolving process defects such as reduced yield, availability loss, substandard materials, and much more to improve upon your performance score with the help of world-class OEE analysis.

OEE is one of the best meters for discrete manufacturers optimizing their production process. Once you are able to accurately calculate OEE, you can discover how to improve the OEE score of your machinery and maximize its production output.

Why is OEE Important?

OEE offers solutions to improve your manufacturing time and gain a better insight when setting a real-time production target by measuring manufacturing productivity and preventing any potential loss factors that could impact your performance calculation.

Using the visualization process of all losses from production lines or machinery, OEE not only indicates what was produced from resources but also shows what they could have produced. OEE is not only a performance indicator but also a more important continuous improvement tool that allows us to eradicate waste and target “the six big losses”, which exist in almost every manufacturing plant.

?

HOW does OEE Deliver the WHY?

Rather than thinking of OEE as Overall Equipment Effectiveness you should think of it as Overall Production Performance Effectiveness. The word “Equipment” is unfortunate because the equipment element of OEE is minor unless you have exceptional Reliability issues. It is also unfortunate because many companies make the mistake of thinking of delivering OEE by means of SCADA or Control type systems.

OEE Companies that truly understand how OEE needs to be integrated with the Production Management process get significant gains because OEE properly deployed delivers:

● Cross Functional Teams working in a Proactive manner delivering the right projects with measurable returns.

● Facilitates and actively encourages culture change by empowering your resources to be accountable and pro-active.

● Each OEE measurement point becomes an accurate reflection of the Production Process and accurately identifies Production Loss Issues ranging from reliability, supply chain, process and operational procedures.

● Answers the business assumptions about the Production Process.

●???Presents information to support the Business WHY! (Production Time Vs Production Costs Vs Production Capacity).

WHY use OEE as a Production Performance Metric?

If you are not currently using OEE as a Production Management Performance Metric then you are missing one of the most influential Key Performance Indicator (KPI) for Production Management.

Companies that truly understand OEE adopt it into their production process do so for some of the following business reasons:

● Increase Output using existing resources to meet Customer Demand

● Increase the Sales Margins on product by reducing the cost of Production

● Allow for more flexibility within existing Production Processes to win new business (for example smaller batch sizes)

● Promote a strong sustainable culture with your people focused on Production Performance Improvement.

?

WHO are the main users and drivers of OEE?

The most common misconception about OEE is that many organisations think OEE is purely an Engineering tool and therefore only relevant to Engineering. Most failed OEE implementations are exactly because of this misinterpretation. It is because of that word “Equipment”. Data collected in this implementations tends to be very technical and of little value to everyone (including Engineering).

You should remember that OEE really stands for Overall Production Performance Effectiveness and as a result the main users and drivers of OEE extends beyond just Engineering.

Below are the teams we believe are critical to a successful deployment of OEE:

● Production (Operations) are actually the most important user of the system. This is because their understand the true root cause of why a line might be stopped (e.g. “No Materials available so cannot finish setup of next Batch”.

● Operational Excellence (Lean Management/Continuous Improvement) are also critical in terms of reviewing data over a prolonged period, observing trends and identifying / agreeing with other key players like Production and Engineering the right Projects to work on in order to drive OEE improvement towards the business goals and driving culture change.

● Engineering and Maintenance are key to ensure design and reliability of equipment is maintained to a high standard and be involved in very detailed root cause analysis (hard to diagnose) using tools such as Condition Based Monitoring and SPC.

● Automation to ensure the right alarms are reporting and sensors are sensing!

● Senior Production and Corporate Management to ensure all departments are pulling in the same direction to meet overall company goals.

● Quality Assurance to ensure that high standards are maintained during all these improvements.

Where to Start with OEE?

OEE analyses start from Production Time, which is when the plant is operational in terms of availability to production. Then, subtract the time taken for planning a stop. That includes all circumstances that can no longer be in the analysis because the unit cannot be run. This means breakages, lunches, and planned maintenance. The time remaining is referred to as planned time of production. OEE commences with planned process time and then subtracts all production loss, and those are then targets for improvement work.

Connect with @Nitco to learn more about OEE and how OEE can help you.