TITLE

OEE (Overall Equipment Effectiveness)

PURPOSE

OEE is a measure of machine performance showing the overall picture of where time is lost by categorising time losses for the purpose of improvement.
PROCEDURE / EXPLANATION / STAGES or CALCULATION
4 How to calculate
1 What it is
Overall Equipment Effectiveness (OEE) is a measure used to analyse equipment performance. This analysis measure
aggregates losses due to availability (breakdowns + changeovers), performance (micro stops + reduced speed) and Total Time
quality problems (spoilage + quality defects). OEE can be tracked for a machine, line or plant though its usefulness as
an analysis tool to generate specific improvement ideas decreases very quickly as the usage broadens.
Total Available Time Planned Stops

Operating Time Breakdown Availability = (available time) - (Downtime)

2 When to use (Downtime losses) Changeover (available time)

•The primary benefit of OEE is that it enables a firm to become more competitive by tracking the effectiveness of Running Time Micro Stops Productivity = (operating time) - (Speed losses)
equipment, creating a baseline from which the productivity of a machine or a production line can be improved. (Speed losses) Reduced Speed (operating time)
•OEE should be used in support of business objectives where there is a clear need like for example: Spoilage
Value-added Quality = (processed amount) - (Defects)
- Bottlenecks machine which is constraining the capacity of a value stream to meet customer needs. (Defect losses) Quality Defects (processed amount)
- High capital cost equipment where utilization must be raised (e.g., injection moulding, die casting,
pressing)
Overall Equipment Effectiveness = Availability x Productivity x Quality

3 Definitions
5 Example
Loss type Definition Countermeasures How to record

1. Planned stops •Any pre-agreed planned •Increase load through added •Manual log sheet Overall Equipment Effectiveness
stoppage e.g., lunch. business
200
2. Breakdown •Machine breakdown •Total Productive Maintenance •Manual log sheet

3. Changeover •Last good old part to first •SMED activities •Manual log sheet
150

Hours
good new part at full speed

4. Micro stoppages •Any unplanned stoppage other •Root Cause Problem Solving •Manual log sheet 100
than breakdown or changeover and performance management

5. Reduced •Lost time due to machine
speed operating at slower speed than
design standard
6. Spoilage •Parts scrapped during
set-up or adjustment
7. Quality defects •Any defective parts
•Root Cause Problem Solving •PLC controller 50
•Root Cause Problem Solving •Manual log from scrap notes
0
•Manual log of rework and
•Root Cause Problem Solving
rejects

PROS Implementation RELATED TOPICS

 Helps understanding the main sources of loss
 Very useful for prioritization
CONS
- When used as a KPI, should only be calculated overall
to avoid useless and painful data collection
• OEE should be used as part of an integrated set of KPI measures and not in isolation. Otherwise it could promote • 5S
large batch sizes or production of quality defects. • SMED
• Use the 80/20 rule when prioritising action items to improve OEE. • TPM
• Utilize other lean tools such as 5S or SMED to improve OEE.
• Do not develop a complex system to track OEE, keep it simple and actionable.
• Make sure you are not improving OEE by running unnecessary parts and building work in progress.
• When calculating an overall OEE on a multi step process, make sure you consider the first pass yield and the
overall OEE is: OEE=OEE1*OEE2*OEE3*…*OEEn for an n steps process. This is called the rolled throughput yield.