What is OEE?
OEE or Overall equipment effectiveness is a performance measure that reflects the health of your process or machine, it is a composite measure that is calculated from your machines availability, performance and the quality of output and expressed as a percentage.
OEE is a very important measure within Total Productive Maintenance (TPM) where it forms the main KPI (key performance Indicator) of your TPM program and provides the focus required to drive improvements within your implementation of TPM. The autonomous maintenance teams use the OEE measure and the individual components of it to drive their continual improvement efforts.
Your OEE calculation is performed using data from the six big losses of your machines and processes, these losses are detailed below;
The Six big Losses
The six big losses are broken down into three main areas;
We all want our machinery and processes to be available for use when we need them within our working day, however there are times when our machines are not and that means that we are unable to produce components to satisfy our customers. Lack of availability can be down to two main reasons;
Breakdowns are unplanned downtime due to equipment or machine failure of longer than usually 10 minutes (shorter stoppages are accounted for within the calculation for performance.) All breakdowns are recorded and the lost time is measured in minutes from when the machine stops to when it back in operation producing good product.
Changeovers are planned (usually) stoppages where we stop producing product and setup and start to produce a different product on our machine. For some machines this can be a few seconds but others there is a significant impact on our availability with machines taking hours for changeover to be completed. We measure the time lost from the production of the final part of the first product to the first good part of the next product.
Your shift is 8 hours long therefore 8×60 = 480 minutes of available time less 10 minutes (for planned maintenance at the beginning of each shift) so 470 minutes of available time.
If your setup took 20 minutes and you suffered 40 minutes lost due to a breakdown then your percentage availability would be;
470 – (20+40) =87%
Our Aim would be to incur zero losses due to breakdowns and setups and achieve 100% availability.
We measure performance in regards to our actual output against what we would expect if the machine was running at its design speed for our available time. So we measure the number of parts produced (good and defective), number of meters, volume or whatever the specific measure is and compare this against the amount that should have been produced if we were running at “design” speed.
Reduced Speed Losses
Often we find that we have to reduce the speed of our processes and machines to prevent quality problems, breakdowns and other problems that tend to arise if we try to run at the speed at which we are supposed to run. This is a very common problem for many pieces of equipment and can be caused by a host of different problems such as incorrect setups and lack of machine maintenance.
Losses due to Minor Stoppages
A significant loss in many processes is caused by what we call minor stoppages, they are not breakdowns as such and they usually last only a few minutes (less than 10) and occur too frequently to be measured accurately time wise therefore we monitor them from within the measure of performance. These are normally problems such as jams where you have to stop and remove the offending components before starting again. Minor stoppage reasons should be recorded on a tally chart for analysis by your TPM team.
If your cycle time was 1 minute and you only produced 350 parts within your 410 available minutes your performance percentage would be;
350 = 85%
410 x 1
Sometimes we produce defective products, either within the process during normal production or during our setup of the process. We measure the percentage of parts that are to specification against the total number of parts produced to give our quality percentage.
When setting a process up we often produce defective parts that cannot then be used, these are recorded as defects for the purposes of calculating our quality percentage within OEE.
Defects are the reject parts that you produce that are not to specification, all defects should be recorded and action taken by the team to find root causes and prevent re-occurrence.
If in this example you had produced 350 parts but 15 were defects and 15 were rejected during setup then you quality percentage will be;
350 – (15+15) = 91%
The OEE Calculation is a composite of the above measure, so we multiply together
availability x performance x quality = 87% x 85% x 91% = 67%
It is not unusual to see initial OEE calculations that give figures between 50% and 60%, world class generally being accepted as being around 85% to 90% but that will depend on the industry that you are in.
Acting on OEE
Measures of performance are only worthwhile if we act on them, the OEE measure should be graphed and kept at the workplace as well as the individual graphs for each of the six losses. These should be the basis for improvement ideas and problem solving by the TPM team for this area.
The team should create fishbone diagrams to show potential causes for their losses and work to reduce and eliminate each cause with actions being recorded on the shopfloor TPM action board for all to see.
Problems with using OEE
Like any other performance measure; if used incorrectly OEE can drive inappropriate behavior that will detract from customer service. For example;
- You can improve your quality performance by avoiding running products that have traditionally higher defect rates.
- You can improve availability by having fewer setups and larger batches rather than focusing on reducing setup times.
- You can avoid running products that have lengthy setup times.
Always combine OEE with a measure of schedule adherence to ensure that the right products are made at the right times as required by the customer.
Using just OEE as the measure to focus activities can also stop you from solving pressing problems, whilst the OEE at a bottleneck may not be the worst within the factory, a minute lost at a bottleneck process is a minute lost for the entire factory. Look at the combination of lost time due to OEE and the cycle time of the machine and compare to the required takt time to set your priorities. Those machines where lost time plus cycle time exceed your takt time should be your initial priorities for action even if they are not the worst OEE.
Additional OEE Resources Online;
OEE Reference Publications
The OEE Primer: Understanding Overall Equipment Effectiveness, Reliability, and Maintainability In depth investigation of OEE
OEE for Operators: Overall Equipment Effectiveness (Shopfloor Series) Productivity Press so Ideal for those that have to apply OEE.
If you have any comments or questions about OEE , TPM or any other lean tool please leave them below.