09 May 2024


What is OEE?

OEE which stands for “Overall Equipment Effectiveness”, is a key manufacturing performance indicator (KPI) that compares your system’s ideal performance to its real performance. By integrating Availability, Performance, and Quality, OEE offers a comprehensive framework for identifying and addressing inefficiencies across the production spectrum. Its role as a diagnostic tool is invaluable, enabling manufacturers to pinpoint root causes of underperformance and implement targeted improvements. It tells how well you have utilized the scheduled production time to produce sellable products. It is a quantifiable way to find out how well your equipment, people, and processes do their job by measuring:

  • Available time/uptime (Availability)
  • Production speed and consistency (Performance)
  • Number of defects (Quality)

Measuring and tracking OEE is important because:

  • It helps you break down where issues happen so that you can fix them more easily.
  • It is a diagnostic tool for your production process.
  • It quickly uncovers losses as well as highly productive areas.
  • It helps nudge you ever closer to your highest level of productivity.

OEE is also an instrument that helps you identify which of the common manufacturing six big losses may be impacting your business the most.

Factors Involved in an OEE.

  • Availability – the amount of time your equipment is running as it should, as a percentage of planned production time that is spent running. It measures the reliability of machinery and the effectiveness of maintenance schedules. High availability signifies minimal downtime due to breakdowns or unplanned stops, ensuring maximum utilization of production resources.
  • Performance – the speed of production and its consistency, represented by the percentage of how close your run time was to the ideal. It evaluates factors like equipment throughput, cycle times, and production stability. Peak performance entails achieving or surpassing the optimal production speed consistently, minimizing fluctuations and inefficiencies.
  • Quality – the quality of parts and frequency of defects, represented by the percentage of all parts made that met quality standards. It assesses the adherence to quality standards and the prevalence of rework or scrap. Superior quality reflects a robust manufacturing process capable of consistently delivering products that meet or exceed customer expectations.
  • Good Count – the number of good parts (that meet quality standards the first time) made during a set period. This metric represents the number of parts produced that meet quality standards right from the first production cycle. It indicates the efficiency of the manufacturing process in consistently delivering products that meet or exceed predetermined quality criteria. A high good count suggests effective control measures and adherence to quality standards throughout the production process.
  • Total Count – the number of all parts (including defects) made during a set period. It encompasses all parts produced during a specified period, including both good parts and defective ones. It provides a comprehensive overview of production output, irrespective of quality. Analyzing total count alongside good count enables manufacturers to assess the proportion of defective parts relative to total production, offering insights into quality performance and potential areas for improvement.
  • Defective Count – The number of defective parts (rejected because they do not meet quality standards) made during a set period. It quantifies the number of parts rejected due to failing to meet quality standards. It highlights instances of non-conformity within the production process, ranging from minor defects to critical flaws. Monitoring defective count enables proactive identification and mitigation of quality issues, minimizing scrap, rework, and customer dissatisfaction.
  • Planned Production Time – total time there piece of equipment is expected and scheduled to run. It represents the total duration for which a piece of equipment is scheduled and expected to operate, typically expressed in hours or shifts. It accounts for the available window during which production activities can take place, excluding downtime for maintenance, changeovers, and other planned interruptions. Understanding planned production time is essential for optimizing production scheduling and resource allocation.
  • Run Time – the amount of time a process is running. It does not include downtime but does include small stops, slowed production, or time spent addressing rejected parts. Run time denotes the actual duration for which a production process is actively running and generating output. Unlike planned production time, run time excludes periods of downtime but includes minor stops, slowdowns, and interruptions associated with addressing rejected parts or minor equipment adjustments. Maximizing run time minimizes idle periods and enhances equipment utilization, thereby improving overall productivity.
  • Stop Time – the total time production was stopped due to both unplanned (equipment failures, material shortages) and planned stops (changeovers, make-ready events). Stop time encompasses the total duration during which production activities are halted, encompassing both unplanned downtime due to equipment failures or material shortages and planned stops for changeovers, maintenance, or make-ready events. Analyzing stop time provides insights into the factors contributing to production interruptions and helps identify opportunities for reducing downtime and improving operational efficiency.

Total Effective Equipment Performance (TEEP)

TEEP is the business measure that tracks overall asset utilization as will be expected by shareholders. TEEP is calculated by the product of OEE & UF (utilization factor). UF is the also called Loading Factor and is the ration of scheduled production time to total available calendar time.). It is not uncommon to have extremely high OEE but very low TEEP values. This only shows very poor value extraction from the productive assets!

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