The practice of OEE measurement first began in the late 1960s as a metric to optimize individual tools and has been refined in recent decades to assess the performance of entire manufacturing lines. Manufacturing performance should always be considered from several perspectives and OEE can be a valuable resource for your factory and warehouse teams.
This user’s guide will present a detailed overview for measuring, understanding, and leveraging OEE metrics. We’ll also look at the important benefits of using OEE and how your organization can implement practices that take advantage of the insights that these metrics offer.
Overall equipment effectiveness is the primary method for measuring and reporting productivity in a manufacturing environment. One of the main reasons that this metric has become a manufacturing best practice is its simplicity. The actual measurement of OEE, which we’ll cover in a later section, can be a bit challenging to establish but the final calculation will yield a simple percentage.
This percentage is calculated in the three areas of quality, performance, and availability. By comparing your equipment data to industry benchmarks, you can gain a better understanding of your manufacturing processes.
| Overall Equipment Effectiveness (OEE) Overview | |
|---|---|
| Definition | A standard for measuring how well a manufacturing operation is utilized in terms of facilities, time, and material against its full potential. |
| Optimal OEE Value | 100%, indicating only good parts are produced (100% quality), at the maximum speed (100% performance), and without interruption (100% availability). |
| Components of OEE | OEE is determined by three factors: the quality of products produced, performance efficiency, and equipment availability. |
| Purpose | OEE identifies the percentage of manufacturing time that is truly productive, aiding in the identification and elimination of inefficiencies. |
The use of overall equipment effectiveness metrics can result in many operational benefits. In addition to improving decision-making, overall equipment effectiveness can also help eliminate non-value-added process steps in your manufacturing workflows. The ability to diagnose equipment problems and inefficiencies also helps to improve maintenance management activities.
These are some of the most common benefits of using OEE.
It’s logical to assume that an improvement in equipment effectiveness cloud also results in an improvement in product quality. Many factors of quality are determined by the accuracy and precision of the equipment. Focusing on overall equipment effectiveness improvements can also lead to greater gains in first-pass yield and a reduction of manufacturing time and costs.
When manufacturing equipment is more reliable and less subject to unplanned downtime, it is easier to determine process cycle times. This reduction in outlying data points is also a great way to enhance the precision of your manufacturing workflows.
The ability to influence equipment performance can help increase the available capacity for tools and the throughput of your facility. As a diagnostic tool, OEE metrics also help identify shifts in equipment performance that can lead to unplanned downtime and preventable repairs.
As mentioned previously, overall equipment effectiveness must take into account three factors that measure availability, performance, and quality. When combined, these metrics create a complete picture of a tool’s effectiveness. We’ll break down each one individually to better understand how OEE is calculated.
((Run Time (Planned Run Time – Stop Time))/Planned Run Time
This measurement represents the amount of time that a machine is available versus the amount of time it is scheduled for use.
(Ideal Cycle Time x Total Count)/ Run Time
This equation measures the actual performance time of the equipment versus the expected cycle time for an operation.
Number of Good Items / Number of Produced Item
A simple calculation, the equipment quality simply identifies the number of in-spec items versus the total number of items produced.
After measurements are completed the three values for availability, performance and quality can be multiplied together to reach a final overall equipment effectiveness percentage. This number is then best used as a benchmark to identify suitable improvements.
Calculating these three factors requires complete and accurate data. Tagging equipment with durable asset tags helps to streamline documentation and ensure a high degree of accuracy by eliminating human error that’s common with manual documentation methods.
With a variety of asset tags and barcode solutions available, such as asset tags for facilities management, equipment tags, high-heat barcode labels, work-in-process labels, and other barcode solutions, it’s possible to tag all your equipment assets, even those that operate in harsh manufacturing environments.
Metalphoto® anodized aluminum asset tags, for example, offer exceptional durability to withstand the harshest environments in both indoor and outdoor applications. Metalphoto asset tags have an expected exterior lifespan of more than 20 years when treated with Camcode’s image intensification process.
These durable asset tags and labels can be quickly and easily scanned with a barcode scanner to document maintenance work, operational times, and other data to calculate OEE with accuracy.
While an overall equipment effectiveness value of 100% would be ideal for any manufacturer, it’s best to compare your values to accepted benchmarks. This is a basic set of guidelines for understanding the OEE measurements that can get you started:
As you collect data and identify improvements, one great way to categorize your findings is by using the “six big losses.” The six big losses are the most common areas of difficulty that are encountered in a manufacturing environment. They are:
In many ways, these six categories represent another level of detail for your overall OEE measurement can eliminating the appearance of these losses can improve your OEE scores over time.
The use of overall equipment effectiveness is an excellent practice to monitor the performance of your manufacturing equipment. When combined with other metrics and a strong commitment to performance management, it’s possible to achieve higher levels of product quality and throughput.
Understanding how the OEE metric works will also help you educate and inform your team about the value of measuring these important areas.
OEE can be applied to most manufacturing processes, including both discrete manufacturing (making individual parts) and continuous processes (e.g., refineries). The key is that OEE identifies the ratio of Fully Productive Time to Planned Production Time
OEE should always be measured at the constraint step in the process. This is the single step or machine that governs the overall throughput and is critical for capturing all losses
The OEE standard is a best practices metric that identifies the percentage of planned production time that is truly productive.
It is calculated by multiplying three factors:
OEE = Availability × Performance × Quality
Where:
This standard provides a comprehensive way to track and improve manufacturing efficiency by considering all types of production losses.
An OEE score of 85% is generally considered a world-class benchmark for manufacturing operations. It means that the production process is running at 85% of its full potential, indicating high levels of efficiency but still with some room for improvement.
A 100% OEE score represents perfect production. It means manufacturing only good parts, as fast as possible, with no downtime.
In practical terms, this translates to:
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