OEE - A Simple but Extremely Valuable Performance Metric for Manufacturers

The old management adage says you can’t manage what you don’t measure. Overall Equipment Effectiveness (OEE) tells you how well your machine or manufacturing line is performing and can help you understand where to focus your improvement efforts. It is relatively simple to implement and can be monitored either manually or on-line. It is an important component of Total Productive Maintenance and Lean manufacturing.

Overall Equipment Effectiveness (OEE) is a measure of what proportion of the available machine (or manufacturing production line) capacity is used to produce good product. It is divided into three components:

1. Availability

What proportion of the time is your machine on-line and therefore available to produce?

Ideally, your machines should be available to run for the entire working day. However, if they breakdown or have to be stopped to enable a product changeover valuable production time is lost.

2. Performance

When your machine is running, what proportion of that time is your machine producing at it’s rated speed?

Machines are often run at less than rated speed because it’s easier -- it has been found that running faster results in quality problems or breakdowns or minor jams (either at that machine or further down the production line), so rather than fixing the underlying causes the machine is run at lower speed.

3. Quality

When your machine is turning out product, what proportion of the output is good product?

Often when a line is first started defective product is produced as the machine setup is not quite correct and has to be “tweaked”. Once the machine is set up as best it can be, occasional defective product may be produced due to variations in raw materials and/or packaging materials or unknown fluctuations in machine operation.

Overall Equipment Effectiveness Calculation

The OEE is calculated by multiplying Availability by Performance by Quality. For example, if the Availability is 85%, Performance is 90% and Quality is 95%, the OEE will be

85% x 90% x 95% = 72.7%

By measuring and recording the data that goes into these three elements you can calculate the OEE and monitor and report trends in performance. Most modern machines can be connected to data-gathering equipment that can continuously calculate and display the OEE.

Tracking and analysing the individual components of OEE will enable you to identify the causes of poor performance and develop plans for improvement across the three elements.

If you have manufacturing equipment you need to be maximising its value to your business by making it work as hard and as efficiently as possible. To do that you first need to measure how it is performing and OEE is a simple but comprehensive measure you can easily implement. Once you start measuring performance you can develop plans for improvement, and that improvement will flow straight to the bottom line of your business.

nem can help with the implementation of OEE through its “Manufacturing, Distribution & Retail Cluster” which comprises partners with many years experience in the manufacturing sector.  

To find out more, visit nem Manufacturing, Distribution & Retail via the link below.


Author: Phil Downing, Lead Partner – nem Manufacturing, Retail & Distribution.
This article is based on research and opinion available in the public domain.