Overall Equipment Effectiveness (OEE)

OEE represents a tool used in production for measuring productivity, how well operations, material, and time are used compared to its full potential. This value reflects the truly productive time, identifying weaknesses of the operations and machines, quality issues, that cause multiple stops during production. We must improve the manufacturing processes, to get rid of dead time and scrap parts.

OEE of 100% = only good pats are produced (100% Quality) X at the maximum speed (100% Speed) X without interruption (100% Availability)

OEE combines three factors:

  • Availability (a)
  • Performance (p)
  • Quality (q)

Let’s take a look at the next scheme and identify these factors.

As you can see, the first category is called PLANNED OUTPUT, representing a defined number of parts, planned to be produced in 8 hours. The planned output shows the ideal situation when everything goes as we expected, but often, this doesn’t reflect reality. The AVAILABILITY LOSSES category points out planned, or unplanned maintenance and small breakdowns. 

GROSS OUTPUT= Planned Output – Availability Losses

The second group is called the SPEED LOSSES, and this one includes machine breakdowns and waiting for something or somebody. Speed losses cause longer cycle times. Activities included in this group: 

  • Operator waiting for machine/ material/ a process to be finished by someone;
  • Changeovers and setups;
  • Cleaning routines;
  • Jam ups;

NET OUTPUT= Gross Output – Speed Losses

The last group is the QUALITY LOSSES, with other words rejected parts, scrap parts. We differentiate two types of scrap parts: 

  • Scrap parts – parts are not according to quality requirements
  • Start-up scrap parts – depends on the industry, first pieces are considered scrap parts during the warm-up phase of the machine (for ex. magazine printing industry, welding industry)

VALUABLE OUTPUT= Net Output – Quality Losses

Using the example given below to calculate the OEE percentage.

Planned output = 800 pcs in 8 hours. The plan includes scheduled maintenance that lasts up to 1 hour. It remains 7 hours left to produce good parts. As well, other unplanned activities affect the production time, like changeover and breakdowns, losing another 30 minutes. The remaining net time is 6,5 hours to produce max. 650 good parts. The final output is equal to 600 good parts, 50 parts being defects. At this moment, we can calculate the availability (a), performance (p), and quality coefficients (q), to get the OEE percentage.

Availability (a) = Gross Output/ Planned Output

Performance (p) = Net Output/ Gross Output

Quality (q) = Valuable Output/ Net Output

Overall Equipment Effectiveness

a= 700/800 => a= 87.5 %

p= 650/700 => p= 93 %

q= 600/650 => q= 93 %

OEE = a*p*q = 75 %

Usually, OEE is combined with Pareto Analysis to identify the biggest losses in the cycle time. The Pareto diagram is based on 80/20 rule, 80% of the effects come from 20% of the causes. In the next example, we use the Pareto Analysis to highlight the main causes, which affect the OEE value.

In this example, the Machine Setup, Product change, and Tool change represent the main problem.

The attached Excel file contains: OEE Template, OEE-Pareto example.

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