Overall Equipment Effectiveness (OEE) has been around for decades in one form or another. Is it just a nice strategy to have? Actually, it’s more than that—it’s a measurement that helps production and management to visualize and eliminate production losses. It can be a tool for managers while having an impact on production and maintenance employees working on the floor. Let’s look at OEE in a clear, objective manner.
What is Overall Equipment Effectiveness?
Overall Equipment Effectiveness (OEE) is a measure of how well a manufacturing operation is utilized. OEE is the algebraic product of three factors:
OEE = Overall Availability X Performance Efficiency X Quality
- Overall Availability: a percentage measure of the degree to which machinery and equipment is in an operable and committable state at the point in time when it is needed.
- Performance Efficiency: Percent of maximum production speed
- Quality: Percent of parts that are good (out of all introduced parts)
An OEE of 100% would mean you are manufacturing 100% good parts (quality) out of all introduced parts at 100% of maximum production speed (performance efficiency) with no downtime. However, this level of perfection is rarely achieved. Most organizations use modified OEE measurements that take into consideration their hours of operation. When modified OEE is used, a rate between 60 and 85% is considered desirable.
OEE is a critical metric for total productive maintenance (TPM). TPM is a system of continuous improvement to increase asset productivity. OEE is used to measure progress towards TPM goals of eliminating waste, including zero unplanned downtime, defects, and accidents.
Measuring OEE: Where to Start
OEE can be an excellent tool for identifying losses from maximum production. OEE loses can arise from equipment failure, overlong setups and adjustments, machine idling and unscheduled stops, reduced speed, process defects, and reduced yield.
When measuring overall equipment effectiveness, begin by defining how you can apply the metrics to your maintenance operations. The next step is to capture OEE data regarding availability, performance, and quality so you can begin to calculate OEE.
Just a few events that can hold up production and have an impact on OEE include overrides, resets, tool changes, pallet shuttle movements, and parts handling or loading. It’s also important to note that an equipment malfunction does not include a process malfunction, so those factors may need to be calculated separately.
Common mistakes operations and product engineering departments make when calculating OEE are:
- Using current running speeds rather than ideal cycle time*
- Excluding personnel and machine changeovers
- Collecting inaccurate data
- Failing to gain machine operator buy-in
- Comparing your scores or metrics to other plants
- Calculating OEE manually
- Including reworked products in your “good counts”
- Making too many changes at once
*Ideal Cycle Time is the minimum cycle time that your process can be expected to achieve in optimal circumstances.
Dispelling OEE Myths
There is a lot of information out there about how to calculate and use OEE. Despite that, there are a lot of myths about OEE that when taken to heart, hinder the benefits of this strategy.
Not an Equipment Acceptance Criterion
In some cases, OEE is used for or viewed in ways that go beyond the scope of what OEE is capable of doing. OEE should be used for capacity planning, process control and improvement, analysis, and benchmarking. Many factors are involved in addition to the equipment being analyzed using OEE, so it is not a stand-alone measurement.
Not “Plug and Play”
There are many commercial OEE solutions available which are marketed as OEE point solutions—meaning you can use it as a tool to calculate OEE without needing to interpret any other data—but are actually dashboarding systems which assume you already have the data sources needed to accurately calculate OEE. OEE is easy to determine, once you have meaningful data to measure and calculate each of the three OEE factors (overall quality, performance efficiency, and availability).
OEE is Not an Equalizer
You cannot compare machinery and assets that have completely different functions. Achieving desirable OEE is dependent on the nature of the asset and how it functions.
Not a Guarantee of Profitability
While having a high OEE can correlate with having a profitable business, it is not a guaranteed cause of profitability. There are very profitable businesses that don’t know how to or choose not to measure OEE. Many other factors affect an organization’s profitability, including marketing, sales, engineering, pricing, and market conditions.
Benefits of OEE
Once you know how to measure and improve OEE, you can start to experience its benefits including:
- Shortened equipment return on investment
- Increased customer satisfaction
- Improved lifetime production from your machinery
- Maximized workforce productivity
- Reduced asset repair costs
- Optimized production by eliminating wasteful action
How FTMaintenance Can Contribute to OEE
Computerized maintenance management system (CMMS) software such as FTMaintenance can help you track both planned and unplanned downtime, which is used to calculate asset availability. This can be done by using one of many customizable maintenance reports. To learn more about how FTMaintenance can help you maximize the benefits of OEE to your organization, schedule a demo today.