What is OEE and what will it show me?

OEE (Overall Equipment Efficiency) is a great tool for trying to eliminate waste to produce as many usable products at the fastest rate possible. It can be measured using this very simple mathematical equation:

                 Availability X Performance X Quality, and is a proven method to improve processing and manufacturing efficiency. There are also many benefits of implementing a system to increase your OEE.

Here are the three sections of OEE:

  • Availability: All the times a system or machine stopped working for several minutes at a time. This is usually due to equipment failure.
  • Performance: The efficiency of the system to run at a maximized speed (and will go down usually because of slow cycles, jams, or any other minor inefficiencies).
  • Quality: The loss of time, money, and resources due to production that does not meet company standards. The way you measure quality is by using throughput yield (the number of units coming out of a system divided by the number of units going into the system). In this case, the scrap parts are usually the key components of quality loss.

Six largest equipment-based losses

The ultimate goal of an OEE system is to correctly identify and reduce the six largest equipment-based losses.

Availability Loss:     

  • Equipment Breakdown – When a machine temporarily shuts down due to a malfunction.     
  • Setup and Adjustments – A machine needs to be adjusted in order to correctly and effectively manufacture the product.

Performance Loss:     

  • Minor Stoppage – A very brief stoppage of the production line.     
  • Reduced Speed – Slower cycle times of a machine running slower than its maximized speed potential.

Quality Loss:     

  • Start-up Scrap – The idea that the new parts manufactured by a machine aren’t up to production standards.
  •  Product Scrap – Defects and rejects later along the production process in which parts or products are unusable.

How can I improve my OEE rating?

OEE measures the percentage of good and effective production time compared to lost and inefficient production time. Although it is very useful, do not use OEE as the final step in your improvements. The OEE system only identifies the major losses in your factory.

It is also most effective when paired up with a TPM or lean manufacturing system. When partnered up with these, you can save up to an hour of production time per week. This hour of saved time can result in an ROI of 0.08 (less than a month). With a real-time visual throughput counter, it will help you keep track of and analyze your OEE to make your business more efficient. If you would like to find more ways to reduce your manufacturing costs and improve your OEE rating click here.