What is OEE?
OEE (Overall Equipment Effectiveness) is a metric often used in the manufacturing industry to measure the percentage of planned production, in order to reduce cost and optimize processes. Typically categorized under the OEE production KPI parameter, OEE can be referenced to compare production performance and track progress over time.
There are three components that OEE takes into account: Availability, Performance, and Quality. The combination of all three is used to analyze the performance and productivity of manufacturing.
Availability (%) = Run Time / Planned Production Time
Performance (%) = Ideal Cycle Time × Total Count / Run Time
Quality (%) = Good Count / Total Count
How to measure OEE:
OEE is calculated by multiplying three factors: Availability, Performance, and Quality. The availability factor takes into account all events that stopped production for a significant period of time; the performance factor takes into account anything that might cause production to function at less than the maximum possible speed; and the quality factor considers any and all manufacturing parts that do not meet quality standards. When measuring OEE, all of these losses must be taken into account.
This is how to calculate OEE :
The end result is a percentage score that reflects that total overall equipment effectiveness. So what is considered a ‘good’ score? According to USA Engineering, an efficient score is around 85%, whereas, the estimated global average OEE score is between 45% – 60%.
Benefits of OEE Measurement:
Every business is constantly looking for methods to improve. OEE measurement assists manufacturers in their mission of evolving their business by focusing on and optimizing various sectors of the production floor. While this picture might seem clear enough, the true value of OEE measurement is revealing exactly which factors of production need optimizing, using these insights to improve performance, and setting a standardized method for future calculations.
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When do you use it?
The OEE measuring system, simply put, is a manufacturing best practice. It is used when manufacturers and companies seek to gain actionable insights on how to dramatically optimize the manufacturing process. Real-time OEE software can provide your company with the benefit of relevant information that tells them the level of effectiveness regarding each piece of equipment on the factory floor. By utilizing OEE analytics, manufacturing companies are able to track and manage production, reduce material waste, identify losses and analyze progression. Though this process can be completed manually, transitioning into an automatic system is recommended as best practice.