Overall equipment effectiveness
Overall equipment effectiveness is a measure of how well a manufacturing equipment is utilized compared to its full potential, during the periods when it is scheduled to run.
It identifies the percentage of manufacturing time that is truly productive as well as the time it is losing effectiveness. An OEE of 100% means that only good parts are produced, at the maximum speed, and without interruption.
Introduction
Measuring OEE is a manufacturing best practice. By measuring OEE and the underlying losses, important insights can be gained on how to systematically improve the manufacturing process.Technically, OEE is an effective metric for identifying and visualizing losses, and steering the improvement of the effectiveness of manufacturing equipment by eliminating 'waste'.
Socially, OEE can provide a common language for groups speaking in different 'languages' such as shop floor, managers or planners.
Origin of OEE
The term OEE was first mentioned in Seiichi Nakajima's book 'TPM Tenkai' in 1982. OEE was described as a central part of the Total Productive Maintenance methodology. It is based on the Harrington Emerson way of thinking regarding labor efficiency.Essence of OEE
100% OEE is considered to be a theoretical reference point where a machine would be permanently running, at its theoretical maximal speed, producing only good products. Anything hindering this is considered to be a 'loss'. To gain insight into which losses occur on the equipment and to target the areas that should be improved to increase the value-creating conversion, three questions are asked:- Is the machine running? If not: What was hindering?
- When running: Is the machine running at theoretical maximal speed? If not: What was slowing it down?
- Is the output meeting its specifications? If not: what DID come out?
in this way, a cascade of effectiveness and effectiveness losses arises.
Loss cascade
The quality rate refers to a PART of the performance. The Performance rate refers to part of the availabilityThree 'rates'
The OEE can now be calculated as the product of the three separate components:- Availability: percentage of scheduled time that the equipment is available to operate. The Availability Metric is a pure measurement of Uptime that is designed to exclude the effects of Quality and Performance. The losses due to wasted availability are called availability losses.
- Performance: speed at which the equipment runs as a percentage of its theoretical maximal speed. The losses due to wasted speed are called performance losses.The performance rate is designed to exclude the effects of Quality and Availability. It will disclose:
- *deliberately reduced speed
- *deviation from the set speed due to minor stops
- *speed fluctuations.
- Quality: Good Units produced as a percentage of the Total units produced. It is commonly referred to as the first pass yield or First Time Right. The losses due to wasted quality are called quality losses.
OEE may be applied to any individual equipment or line. This tool also allows for drilling down for very specific analysis, such as a particular Time frame, Shift, Team or any of several other parameters.
Although the performance of a particular product can be determined from OEE data, OEE cannot be calculated for that product because this would require that all downtime should be correlated to specific products.
Six Big Losses
OEE focusses on the 'if not' in the equations: Where did potential effectiveness got lost? These 'losses' of effectiveness are being subdivided further into what is known as the 'Six Big Losses' to OEE.In order to make this more universally applicable and also to better reflect the financial impact of the losses, the original six big losses were later adjusted slightly.
| Availability | Performance | Quality |
| Waiting | Minor Stops | Scrap |
| Breakdowns | Reduced Speed | Rework |
The reason for identifying the losses in these categories is so that specific countermeasures can be applied to reduce the loss and improve the overall OEE.
Calculation of OEE
Multiplying the three underlying grades AxPxQ results in a percentage value that indicates the proportion of the scheduled machine running time during which production actually met the quality criteria.This value is always well below 100%, as 100% is a theoretical value. Even if a system runs continuously at maximum speed without causing a single defect, it will for example still need to be serviced at some point.
OEE is calculated with the formula:
Example: **=
Alternative calculation
Alternatively, the OEE as a number could be calculated by dividing the minimum time needed to produce the parts under optimal conditions by the actual time needed to produce the parts.However, in this way the losses are no longer known, meaning the most important part of OEE is missing.
Value Range
The value range for OEE is between 0% and 100%. If an effectiveness level of more than 100% is displayed, this indicates an error in the definition.100% time for OEE is the time when the machine is scheduled to be in operation: This is usually the “shift time.”
Availability
The Availability portion of the OEE Metric represents the percentage of scheduled time that the equipment is available to operate.Example
A given machine is scheduled to run for an 8-hour shift with a 30-minute break, during which the machine is being stopped, and there is a breakdown of 60 minutes.During the scheduled operating time of 480 minutes, the machine was waiting 30 min. because of the break and 60 minutes because it broke down.
It was actually operating 480 - 30 - 60 = 390 Minutes
Calculation
Method 1:Example: Availability = 390 minutes / 480 minutes = 81.25%
Method 2:
Example: Availability = / 480 minutes = 81.25%
Performance
The performance rate represents the ratio between the theoretical maximum speed of the machine and its actual speed.Performance can only be calculated when there is output; thus during actual running time.
Defining the maximum speed
While the actual performance can be measured, it is often difficult in operational practice to obtain the theoretical maximum speed as a reference value. The technical data provided by the machine manufacturer does not usually correspond to the theoretically possible maximum values, e.g. to avoid complaints or for other reasons.Defining a too low maximum speed will become visible when the performance goes above 100%, which is undesirable. Ultimately, the goal of OEE is to reveal all potential.
It is a good practice to calculate the maximum value based on physical limits, e.g., a calculation of heat transfer, the power of a motor, or the fall speed of a product. If that fails, the concept of “best demonstrated cycle time” has proven itself. This involves determining the production speeds of products from the past and increasing the highest production speed by a margin of 20%. Defining this as 100% performance may lead to a structurally too low OEE, however it will visualize any potential loss on the performance.
The factor 1 now represents a peak value that is never exceeded, even for a short time.
For systems that only manufacture one or a few products, calculating the performance factor is simple. If a large number of different products with different maximum speeds are run on one system, the effort required to determine the maximum speed can be high and the performance should be calculated correctly using a weighted average.
Calculation
The Performance is calculated with formula:Example
A given equipment is scheduled to run for an 8-hour and has 90 min downtime.Operating Time = 480 Min – 90 Min Downtime = 390 Minutes
The Standard Rate for the part being produced is 40 Units/Hour or 1.5 Minutes/Unit
The equipment produces 242 Total Units during the shift. Note: The basis is Total Units, not Good Units. The Performance metric does not penalizes for Quality.
Time to Produce Parts = 242 Units * 1.5 Minutes/Unit = 363 Minutes
Performance = 363 Minutes / 390 Minutes = 93.1%
Quality
The Quality portion of the OEE Metric represents the Good Units produced as a percentage of the Total Units produced. The Quality Metric is a pure measurement of Process Yield that is designed to exclude the effects of Availability and Performance. The losses due to defects and rework are called quality losses.Calculation: The Quality is calculated with the formula:
Example:
242 Units are produced. 21 are defective.
= 221 units
221 good units / 242 total units produced = 91.32%
Standards
The calculations of OEE may not seem to be particularly complicated, but care must be taken as to standards that are used as the basis. In order to visualize all losses, it is crucial to use the right 'configuration' of the metric.ISO 22400-2:2014 and VDI 3423:2011-08 (2011)
Definitions — for parts — of the OEE can be found in ISO 22400-2:2014. and VDI 3423:2011-08These definitions are not standardized for all industries and are individually tailored to the respective company in its application.