Overall Equipment Effectiveness is a measure of how well assets in a production/manufacturing process are utilised. It's expressed as a percentage of the plant's full or theoretical maximum capacity and is calculated as follows:
OEE = Availability x Performance x Quality
Availability = Operating Time / Scheduled Time
Performance = (Parts Produced x Ideal Cycle Time) / Operating Time
Quality = (Units Produced - Defective Units) / Units Produced
An indicator of productivity, OEE is seen as a key metric by manufacturers looking to understand the causes of inefficiency within their operations. Because it can be universally applied, OEE is also used to benchmark improvements and draw comparisons between processes, sites or companies.
The 'OEE Estimator' below can be used to gain familiarity with this metric. Enter information related to your business, or play around to get a feel for the impact different inputs have on the final result.
What does good look like?
Due to the nature of the calculation, achieving a high OEE is challenging. Scores of 95% in each of the 3 areas only gives an OEE of just under 85.7%. World-class is considered between 75% - 90% depending on product complexity and variety.
As such, low scores are common. Particularly where OEE has not previously been a Key Performance Indicator (KPI). If you got a lower result than you were expecting, know that many companies start out with scores < 40%.
Depending on your product and process the different components can be easier or harder to improve. It's rare for a company to get similar scores in each area - particularly those just starting out - and it's not likely to be helpful to aim for this.
Like any KPI, pursuing improvements in OEE without regard for the characteristics of your specific product, market and processes is unlikely to bring about sustainable improvement. Using the measurement effectively involves looking at performance in detail. To do this users of OEE consider "Six Big Losses", which represent the common causes for inefficiency.
Six Big Losses
Each OEE component has 2 common types of loss:
Equipment failure - e.g. breakages, emergency shutdowns, faults
Planned stops - e.g. cleaning, retooling, starting up/shutting down
Speed loss - e.g. inconsistent inputs, lack of maintenance, machine age/condition
Minor stops - e.g. jams, clearing obstructions, adjusting settings
Start-up defects - e.g. incorrect settings, equipment warming up/cooling down, incompatibility
Production defects - e.g. incorrect settings, operator error, starting up/shutting down
Interested to see how an improvement in OEE would impact your business financially?