What is Overall Equipment Effectiveness?

Is it possible to know the true performance of your plant, machines and operators?

Is your plant floor operating at peak capacity?  What is peak capacity?  How do you know?

Overall Equipment Effectiveness, or OEE, is how to track the productivity of manufacturing. A company first defines a goal and then using production time, performance, quality, and other metrics to understand, benchmark, measure, and improve their OEE score.

As with just about any other business-related goal, you need some kind of metric to determine positive or negative behavior.  You need a target and a quantifiable way to evaluate your performance against that target.

What kinds of goals are commonly used today?

  • Number of parts produced per shift/day
  • Number of defective parts produced per shift/day
  • Amount of scrap produced per shift/day
  • Equipment downtime

All of these are valid and can provide valuable insight into your daily operations.  However, there is a deeper level of understanding available to savvy business owners and managers.  Overall Equipment Effectiveness, or OEE, is a simple calculation that can be used to compare planned and expected performance to actual performance.  It can be applied to individual machine operators, specific machines, certain shifts, factory locations or to an entire organization with significant benefits.

How can we Calculate OEE?

Regardless of industry, OEE can be used to provide data surrounding three main points of interest.

  1. Quality
  2. Availability
  3. Performance

Reviewing goals used frequently by manufacturers today, you may find that you’re already capturing some of the data that you need to dig even deeper.  Quality measures the defects and scrap relative to good parts made.  Availability is concerned with downtime, particularly unplanned downtime versus total available time.  Performance is concerned with good parts made, compared to capacity.

To calculate an Overall Equipment Effectiveness score, multiply the three measurements together.

Overall Equipment Effectiveness = Quality x Availability x Performance

An OEE example

A machine produces 498 good parts in a day, with 513 overall and 9 hours with 1 hour of unplanned downtime plus 1 hour of standby time waiting for raw materials.  Assume that the manufacturing line is capable of producing 700 pieces per day. 

In our scenario, our formula would look like this:

Quality  = 498/513 = 97.02%

Availability  = 7/9 = 77.78%

Performance = 513/700 = 73.29%

OEE = 0.9702 x 0.7778 x 0.7329 = 0.5531

How to know if your OEE calculation is good or bad

In our example, the OEE is calculated to be 55.31%  In a classroom setting, that would be a failing grade.  But, in the OEE environment, this is an acceptable number.  You might expect your first OEE measurement to be under 50% with no prior experience.  Over 50% should be viewed as positive, with plenty of room to take advantage of improvements. 

An OEE score of 100% is unachievable over the long term, as emergency breakdowns happen in the best of environments.  You will always need some down time for machine changeover and even in JIT settings, parts occasionally arrive later than expected.  

A 100% score should always be the target, but a consistent OEE score of 80-85% can be considered to be best of the best.  World-class manufacturers are performing in the 85% range consistently.

It’s OK if you don’t start at 85%.  It’s to be expected.  Just know that you’ll have an opportunity to take your operations to the next level of profitability.

Want to implement OEE in your business? What’s next?

If you would like to take advantage of the benefits of monitoring your overall equipment effectiveness, ICS can help. 

We have two OEE products built on the Ignition SCADA platform from Inductive Automation. 

  1. IOEE-Lite will allow you to field test the concept on your own equipment.  We can set up one machine and provide quantifiable data about your in-house operations. 
  2. If you find that you need a more comprehensive solution, then our IOEE product will provide a scalable solution that is limited only by your needs.

To learn more or to press start on your own OEE installation, call or send a message

We’ll meet with you on your schedule to provide a no-pressure explanation of what we can provide and how it can benefit your business.

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