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Intro to Lean

OEE

Improve Production Today

WHAT IS OEE?
OEE (Overall Equipment Effectiveness) is a “best practices” metric that identifies the percentage of planned production time that is truly productive. An OEE score of 100% represents perfect production: manufacturing only good parts, as fast as possible, with no down time. OEE is useful as both a benchmark and a baseline:

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As a benchmark it can be used to compare the performance of a given production asset to industry standards, to similar in-house assets, or to results for different shifts working on the same asset. As a baseline it can be used to track progress over time in eliminating waste from a given production asset.

OEE

OEE BENCHMARKS
Short Interval Control So as a benchmark, what is considered a “good” OEE score? An OEE score of 100% is perfect production: manufacturing only good parts, as fast as possible, with no down time. An OEE score of 85% is considered world class for discrete manufacturers. For many companies, it is a suitable long-term goal. An OEE score of 60% is fairly typical for discrete manufacturers, but indicates there is substantial room for improvement. An OEE score of 40% is not at all uncommon for manufacturing companies that are just starting to track and improve their manufacturing performance. It is a low score and in most cases can be easily improved through straightforward measures (e.g. by tracking down time reasons and addressing the largest sources of down time – one at a time).

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Benchmark your OEE score against industry standards for discrete manufacturing and strive for world class results.

CALCULATING OEE – THE SIMPLE WAY
So how is the OEE score calculated? In simplest terms, OEE is the ratio of Fully Productive Time to Planned Production Time. In practice this is calculated as:

(Good Pieces x Ideal Cycle Time) / Planned Production Time
Let’s define some terms: Good Pieces (pieces that are manufactured without any defects) Ideal C ycle Time (the theoretical fastest possible time to manufacture one piece) Planned Production Time (the total time that the production asset is scheduled for production) Fully Productive Time (producing only good pieces, as fast as possible, with no down time)

CALCULATING OEE – THE PREFERRED WAY
The preferred way to calculate OEE is mathematically equivalent to the simple formula described above, but provides a much richer understanding of waste in the manufacturing process by breaking it down into three measurable categories: Availability Performance

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In practice it is calculated as: Good Pieces / Total Pieces OEE OEE takes into account all losses (Down Time Loss. resulting in a measure of truly productive manufacturing time. which factors out manufactured pieces that do not meet quality standards.Quality OEE is the ratio of Fully Productive Time to Planned Production Time. where Operating Time is simply Planned Production Time less Down Time: Operating Time / Planned Production Time Performance Performance takes into account Speed Loss . It is calculated as the ratio of Fully Productive Time (fastest possible time for Good Pieces) to Net Operating Time (fastest possible time for Total Pieces). as fast as possible. Planned Shutdown is not included in OEE calculations since there is no intention of running production. an OEE score of 100% was described as perfect production: manufacturing only good parts. It is calculated as the ratio of Operating Time to Planned Production Time.html?utm_source=vorne&utm_medium=email&utm_campaign=1104&utm… 2/3 . as fast as possible. it is calculated as: Availability x Performance x Quality If the equations for Availability. Let’s tie this notion of perfect production to the OEE calculation: Manufacturing only good parts…means a Quality score of 100% www. 90. Total quantity of pieces manufactured during this shift. including pieces that require rework. with no down time). It is calculated as the ratio of Net Operating Time to Operating Time. Ideal Cycle Time 1 minute Total Pieces Operating Time Performance Quality 300 330 minutes Run time of this shift (planned production time less down time). Here is a simple example of a Performance calculation: Item Value Explanation Theoretical fastest time to produce this part. It is calculated as the ratio of Fully Productive Time to Planned Production Time. In practice. Therefore.leanproduction. it can be seen that multiplying Good Pieces by Ideal C ycle Time results in Fully Productive Time (manufacturing only good parts.9% (Ideal C ycle Time x Total Pieces) / Operating Time = (1 x 300) / 330 Quality takes into account Quality Loss . With a bit of reflection. Performance. it is calculated as: (Ideal Cycle Time x Total Pieces) / Operating Time Ideal C ycle Time is the theoretical fastest possible time to manufacture one piece. with no down time.com/oee. and Quality are substituted in the above equation and then reduced to their simplest terms the result is: (Good Pieces x Ideal Cycle Time) / Planned Production Time This is the “simplest” OEE calculation described earlier. In practice. which includes all factors that cause the production asset to operate at less than the maximum possible speed when running. when it is multiplied by Total Pieces the result is Net Operating Time – the theoretical fastest possible time to manufacture the total quantity of pieces. Perfect Production Earlier. which includes all events that stop planned production for an appreciable length of time (typically several minutes or longer). and Quality Loss). Availability Availability takes into account Down Time Loss . Speed Loss.

and other tools visit: www.As fast as possible…means a Performance score of 100% With no down time…means an Availability score of 100% Working through real-world examples is a great way to master the OEE calculation. this keeps a strong focus on a key actionable improvement area) Learn more and get inspired – join our lean mailing list Get something for nothing – download free tools ©2 0 1 0 .7 6 7 . For free worked examples. METRICS FOR THE PLANT FLOOR OEE is a great tool for managers.oee.com/oee. I L U SA • 8 7 7 ..html?utm_source=vorne&utm_medium=email&utm_campaign=1104&utm… 3/3 . but for plant floor employees it can be a bit abstract.leanproduction.L E A N www. Plant floor employees will perform best when they are given goals that are real-time. I tas c a. A good example of an effective set of plant floor metrics is TAED: Target (a real-time production target driven by the planned rate of production) Actual (the actual production count) Efficiency (the ratio of Target to Actual. spreadsheets. easily interpreted and highly motivational.2 0 1 2 V orne I ndus tries I nc . how far ahead or behind production is running in terms of a percentage) Down Time (accumulated down time for the shift updated in real-time. templates.com/resource-center.

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