OEE EXPLAINED

What is Overall Equipment Effectiveness (OEE)?

Need to get your head around OEE? We’ve put together this guide to explain what OEE is, why it matters, how you can calculate it, and ways to improve your OEE score.

definition

What is OEE?

OEE stands for Overall Equipment Effectiveness.

Overall Equipment Effectiveness identifies the percentage of planned production time that a manufacturing plant is truly productive, based on availability, performance, and quality.

This makes OEE a useful way to measure and track the performance and efficiency of manufacturing equipment over time. It’s used as a core metric of Total Productive Maintenance (TPM), which is a method of managing physical assets through maintenance and improvements.

Get the guide to understanding and calculating OEE

Want to dive deeper into OEE? Download our OEE Whitepaper, with more detailed definitions of OEE, formula cheat sheets, and more.

Calculation

How do you calculate OEE?

To find out your OEE score, use the following Overall Equipment Effectiveness Formula:

OEE=

Quality%

What percentage of your total products are produced perfectly with no waste?

Performance%

What was your actual run rate as a percentage of your optimal run rate?

Availability%

Out of total planned production time, what percentage of the time did your equipment actually run?

This OEE calculation will give you an overview of your production performance as a percentage.

You can use an online OEE calculator or spreadsheet to make it easier to calculate your OEE. Or use a solution like OFS, to automatically calculate Overall Equipment Effectiveness using data pulled from your production lines.Your score can be used as a baseline or benchmark for future improvements.

Note: We recommend also exploring other OEE models and formulas. A different approach may better suit your production site and/or goods by producing a score that better reflects your performance.

BENEFITS

Why does OEE matter for manufacturers?

Here are some of the main applications and benefits of measuring OEE in manufacturing:

Simplify Performance

Your OEE score is a single figure that can be easily visualized and understood by everyone, from management to operators.

Monitor equipment

Regularly calculating OEE forces you to pay attention to asset utilization metrics, like performance, uptime, and yield

Justify expenses

Use historical data on machinery performance to justify CaPex and OpEx.

Understand profits

Identify hidden costs of machine inefficiencies and record losses from unplanned downtime and waste.

Improve morale

Show staff how their efforts are making an impact.

Encourage excellence

OEE can act as a baseline or benchmark to drive continual improvement.

Despite these benefits, OEE scores do have some limitations. The percentage score does not identify why your performance is trending up or down. In order for your team to take action, they’ll need a more precise breakdown of quality, performance, and availability so that they can dig further into the potential causes of any issues.

BENCHMARKS

What OEE% should I aim for?

When setting benchmarks, it might help to know that in most industries:

85%

OEE is considered world class

60%

OEE is typical

40%

OEE is low (but not uncommon for manufacturers that are new to tracking and improving performance)

Want to know how to reach 100% OEE? To get this score, your operation needs to:

Produce perfect products with no waste (100% Quality)

As fast as possible (100% Performance)

Without any downtime (100% Availability)

100% Overall Equipment Effectiveness may be an unrealistic goal, but with small tweaks here and there, you can continually improve your effectiveness and bring your operations as close to perfect as possible.

EFFECTIVENESS

How do you improve OEE?

It all depends on what’s happening in your production line. But here are some strategies that may help to bring up your OEE score:

Use real-time data and alerts to identify problems sooner

Make performance data easily accessible to the whole team

Prioritize fixes or upgrades by impact on OEE

Repair or replace machinery that causes frequent stops or slow run times

Optimize changeover processes

Change packaging materials to reduce waste

Take a closer look at the data behind your OEE score to determine which strategies are best for your facility or production line.

OEE Software

Use OFS to automate OEE

Manually calculating OEE can be tedious, time-consuming, and risks human error. Fortunately, with a manufacturing performance software like OFS, you can easily keep track of production performance with automatic data collection, real-time monitoring, user-friendly dashboards, and custom alerts. Best of all, every detail behind your OEE score is easy to access, empowering your team to take faster action and make smarter decisions that improve Overall Equipment Effectiveness.

Trusted by leading manufacturers

We’ve seen results of improving OEE from under 50% to around 85% over a 4 month period. OFS helped bring to life where the key issues are on this line and we were able to focus and fix.

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