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Introduction to OEE (Overall Equipment Effectiveness)

What is Overall Equipment Effectiveness (OEE)?
Overall Equipment Effectiveness (OEE) is a measure to evaluate the productiveness of a
machine or process area. The OEE data is used to analyse equipment performance,
accounting for losses due to availability, performance and quality.
* What gets measured, gets fixed.
* If you don’t know what your losses are, you can’t fix them.
Why Measure Equipment Effectiveness?
 To identify losses on a specific asset.
 To provide feedback to stakeholders involved in improvement activities, and
accurately reflect the results of the improvement effort.
 To track facts & data to ensure root cause solutions to problems.
 To demonstrate improvement visually.
 To optimize productive capacity based upon facts & data.
 To use improvement resources to maximize the benefit to production capacity.
A meaningful measure can:
 Help to discover problems that might need attention in your process
 Help to prioritize activities for the biggest payback
 Demonstrate the ‘improvement” has improved the process
 Help to communicate with management about the problems.
Overall Equipment Effectiveness
World Class companies consistently maintain about 85% equipment effectiveness. However,
most companies do not know their potential for efficient use of their equipment and are
probably running at less than 50%.
Let’s study the OEE equation to learn what it is and what it can do for your organization.
In practice, OEE is calculated as the product of its 3 contributing factors.
OEE = Availability x Performance x Quality
This type of calculation makes OEE a severe test. For example, when all 3 factors are at 90%,
OEE would be 72.9%.
Worldwide studies show that the average OEE rate in manufacturing plants is 60%

OEE combines 3 factors:

1. Availability (a)
It refers to the resources that you have at your disposal; the resources could be machines,
trucks humans/employees.

1
A measure of 100% availability means the process has been operating continuously. All the
resources are available 100% of the time that they are scheduled to be available for.
Availability losses come in different forms:
 Breakdown – if the equipment suddenly fails
 Changeover and setup times – the time that is needed to change or replace the
equipment/parts in order to deal with another form of production
 Material shortages
Formula
total operating time
Availability rate (a) =
loading time
OR

https://limblecmms.com/blog/oee-overall-equipment-effectiveness/

2. Performance (p)
It refers to the speed of your production process and your ability to stay at that pace over
time.
A measure of 100% performance means the process has been consistently running at its
maximum speed.
Speed losses come in different forms:
 Reduced speed
Examples - When human resources cannot perform at top speed due to different
factors such as; stress, illness or lack of training. When a machine cannot perform at
top speed due to machine wear and tear.

 Idling
Refers to when resources are waiting for some inputs. Resources could be humans,
machines or equipment.
Examples - Waiting for parts to arrive from other stations. Waiting for order
confirmation.
Performance can also be calculated by determining how many units have been produced; and
compare the produced units to the number of units that could have been produced during the
actual operating time by running the machine at the fastest possible speed.

2
Formula
net operating time
Performance rate (p) =
total operating time

OR

https://limblecmms.com/blog/oee-overall-equipment-effectiveness/

3. Quality (q)
It refers to the quality of parts and how often you produce defects. It is the percentage of all
the parts you produced that met your quality standards (good).
A measure of 100% quality means there have been no rejects or rework pieces - every single
part that is produced is perfect.
Quality losses come in different forms:
 Regular scrap - refers to products that are produced with defects after the machine has
warm-up
 Start-up scrap - refers to defective items that are produced when you have just started
the equipment (producing scrap while warming-up)
Formula
valuable operating time
Quality rate (q) =
net operating time
OR

https://limblecmms.com/blog/oee-overall-equipment-effectiveness/