What is OEE and Why Does it Matter?

Person inspecting overall equipment efficiency (OEE)

Efficient equipment is everything in a factory environment. The ability of equipment to work as expected, at an anticipated level, allows manufacturers to make better plans for the value stream. From knowing machine cycle counts to identifying the pass-through rate of product at a specific point in the process, everything comes down to efficiency and predictability. And the best metric for predicting and maintaining efficiency is Overall equipment efficiency (OEE).

What is overall equipment efficiency (OEE)?

Measuring OEE helps manufacturers determine the efficiency and effectiveness of a specific manufacturing process. An accurate OEE calculation allows for continuous improvement by providing benchmarks for regular equipment function. Progress tracking and equipment problem identification are also easier with an accurate OEE measurement. The calculation for OEE is as follows:

OEE = Availability x Performance x Quality

The factors behind an accurate OEE measurement

Availability, performance, and quality are the three factors of an OEE measurement. Calculating each of these factors determines the most accurate OEE benchmark.

  • Availability. This factor considers the occurrences which cause planned production to stop for a significant amount of time. To find availability, calculate the ratio of run time to planned production time. The formula for availability is:

Availability = Run Time / Planned Production Time

  • Performance. Examples of performance issues include slow cycles and small stops. The performance measurement accounts for  any issues which slow down the speed of the manufacturing process. The formula for calculating performance is:

Performance = (Ideal Cycle Time × Total Count) / Run Time

  • Quality. The first pass yield considers good parts as any parts that don’t require reworking after production. They are near perfect parts. Quality considers all the parts that don’t meet this standard. Use this formula to calculate quality:

Quality = Good Count / Total Count

What is a good OEE measure?

With an accurate OEE calculation, a company can determine how much improvement its processes need. For example, an OEE measurement of 100% shows a company is operating at maximum efficiency. An OEE measurement of 60%, on the other hand, indicates there’s significant room for improvement. OEE measurements of around 40% are common and can be improved upon by implementing simple measures.

OEE makes it possible to manage the six major losses

OEE helps identify the point at which a piece of equipment is no longer performing at maximum efficiency — where it’s creating loss. There are six common issues that contribute to a company’s equipment-based productivity loss, including:

  1. Availability (breakdowns and failures)
  2. Availability (setup and adjustments)
  3. Performance (unplanned stops)
  4. Performance (reduced speed)
  5. Quality (startup rejects)
  6. Quality (production rejects)

By helping to identify and reduce waste issues, OEE helps manufacturers improve value stream operations. Fine-tuning each contributing factor lets manufacturers raise the OEE measurement and set a new benchmark for factory efficiency.

OEE is a metric every team should track

In an ideal factory environment, maintenance teams track any of a dozen important equipment performance metrics. To inform a more sophisticated maintenance approach, OEE should be chief among them. When you know how equipment can and should work, it’s easier to pinpoint when it’s not performing optimally. Given its ability to mitigate six major losses associated with inefficiency, OEE is a principal metric.

Is your equipment consistently falling short of OEE benchmarks? It might be time for expert repairs. You can always count on the professionals at Global Electronic Services. Contact us for all your industrial electronic, servo motor, AC and DC motor, hydraulic, and pneumatic needs — and don’t forget to like and follow us on Facebook!
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