OEE, or overall equipment effectiveness, is the best way for a factory to measure its productivity. Measuring OEE involves looking at 3 factors: availability, performance and quality.
OEE = availability * performance * quality
Availability refers to the time that each machine is actually up and running as compared to the amount of time that it was planned to be producing. It takes into account any downtime that lasts more than a few minutes.
Availability is calculated as follows:
Availability = run time / planned production time
Run time is calculated by taking the planned production time and subtracting any planned or unplanned stops. Planned stops would include things like changing equipment and unplanned stops refer to breakdowns.
Performance looks at the speed at which the process is actually running in comparison to its maximum possible speed, and is calculated as follows:
Performance = (ideal cycle time * total count) / run time
Ideal cycle time is the maximum speed at which the process can run assuming total optimization. Multiplying that by the total count of units produced reveals the shortest time needed to produce the total number of units. Dividing that by the actual run time shows at what percentage of its maximum potential the process is operating.
Quality looks at how many usable products are produced without any defects or needing additional work. The formula to calculate quality is:
Quality = good count / total count
This calculation reveals what percentage of the total products do not have any defects and can pass quality control inspections.
Once all three variables are calculated, multiplying them together provides one overall picture of how effective the assembly line is currently operating, taking into account anything that could contribute to major losses including machine downtime, lower speeds, and defective products.
By looking at each individual figure, it is possible to identify where the challenges lie and whether it is necessary to address issues impacting availability, performance or quality in order to improve overall effectiveness.
