OEE
The Overall Equipment Effectiveness (OEE) is a key performance indicator used in the industry to measure the efficiency of production equipment. It takes into account three main factors: Availability x Performance x Quality. In other words, it represents the percentage of time spent producing good parts at the nominal rate compared to the number of parts that could theoretically be produced during production time. This allows companies to identify and reduce losses, improve productivity, and optimize their operations.
How to Calculate OEE
Let’s start by calculating OEE for an 8-hour shift.
Availability
Total Time: 8 hours
Required Time: 7 hours (8 hours - 1 hour planned downtime)
Operating Time: 5.5 hours (7 hours - 1.5 hours unplanned downtime)
Performance
Average Rate: 16 units /h
Target Rate: 20 units /h
Quality
In our example, 4 units were rejected during the quality control process.
Good products: 84 units
Total Quantity: 88 units (16 units / hour × 5.5 hours)
OEE in losses
The OEE percentage becomes more significant and tangible when converted into a funnel of losses, broken down into availability losses, performance losses and quality losses. All of these can be converted into time losses and, therefore, into losses in the number of units not produced.
Let's take the same example but add the 5 days per week that this plant operates.
Availability Loss
This means the machine is not running when it should, leading to less production time = Unplanned Downtimes, such as Machine Breaks, no material, etc.
It is important to clarify that Schedule Loss or Planned Downtime are not included in the OEE calculations as they are part of OOE(Overall Operations Efficiency).
In this example, the line was active for only 20 hours of the 32.5 hours that is supposed to be running according to its Scheduled time. The Scheduled time takes into account Planned downtimes such as Lunch, Breaks, etc.
With those 20 hrs, the line could only produced 400 units of the 650 that could have been produced if there hadn't been any unplanned downtimes.
Calculating the time in availability losses depends on the KPI you are focusing on. For OEE, availability only considers unplanned downtime, while for OEE, it considers both unplanned and planned downtime. OEE (Economic Effectiveness), on the other hand, incorporates a maximum continuous 24/7 time for its calculation.
Performance Loss
When the machine operates at a slower speed than its ideal or designed speed. This means it takes longer to produce each unit, reducing efficiency = Slow cycles and Micro stops.
In this example the line instead of running at a 20 units/h Rate it ran to 16 units/ h, as a result, it only could produce 320 units of the 400 units that it would have produced running at the targeted rate.
Quality Loss
When not all produced units meet the required quality standards, scrap and parts that need rework.
In our example, there were 35 units rejected at the Quality check process.
In this example, the amount net units, or good counts left were 285 units of the 650 units that could have been produced, without unplanned downtimes at the right speed, with no rejects.
By diligently monitoring and optimizing these factors, you can make significant improvements at every stage of your production process, leading to increased efficiency and cost savings.
Remember that all the percentages can be quantified in terms of time, units, and ultimately in money, do you know how much money you are losing due to a low OEE percentage? Which is your lowest OEE Factor? Do you know how to start implementing actions Today?
What is the main difference between OEE and OEE?
OEE, Overall Equipment Effectiveness, measures the productivity of the line based on its duration of use.
OOE availability takes into account ALL stops (planned and unplanned) in relation to the total time.
Let's re-take our first example only calculating the OOE for a 8 hour shift.
Key Observations:
- The OEE availability considers ALL downtime (planned and unplanned) relative to the total time, making the availability in OOE lower than in OEE.
- The quality and performance percentages remain the same.
- The theoretical maximum quantity of products will also increase since the time for OOE (8 hours) is higher than that of OEE (7 hours).
This example illustrates the significant impact of planned and unplanned downtime on equipment efficiency. It also shows how OOE and OEE differ in their treatment of planned downtime, with OOE providing a more comprehensive view of overall time utilization.
OEE Benchmarks
Seiichi Nakajima introduced the concepts of OEE and total productive maintenance (TPM) in the 1970s, and in his 1984 book Introduction to TPM, he suggested four “world-class” numbers: availability of 90 percent, efficiency of 95 percent, and quality of 99 percent, yielding 85 percent (world-class) OEE
- 100% OEE is considered perfect production
- 85% OEE reflects world-class operations
- 60% OEE is typical and average
- 40% OEE is low but not uncommon
The metric could have different weights depending on your industry, type of company, size, etc.
There are times when a world-class OEE target is either unrealistic or unideal, simply because of how your operations work. Distinct differences exist between manufacturers of large and small product mixes, based on their target numbers for the individual aspects of OEE (availability, efficiency, and quality).
