Measuring overall equipment effectiveness (OEE) has become the ideal way for determining how much of the manufacturing time is productive. By eliminating downtime, increasing production and improving product quality, measuring OEE has become crucial for companies focusing on lean manufacturing.
But just how exactly do you calculate OEE? There are three main metrics that determine OEE: availability, performance and quality.
This is the amount of time your equipment is running during a scheduled shift, taking into account all planned and unplanned stops during production time. When calculating availability, a score of 100% means production never stops, which is ideal in lean production.
To calculate OEE availability, use the simple equation:
Run Time/Planned Production Time
The amount of stops and idle time your production system has determines your performance score. A score of 100% means that production is always running at max speed. To calculate OEE performance, use the equation:
Actual Production/Ideal Production
While availability and performance measure how fast and how often your manufacturing process is working, quality measures how many usable parts are being produced. It’s ideal to have 100% of parts usable at the end of production.
To determine your quality score, use the equation:
Good Parts/Total Parts
Putting it All Together
Once you have measured availability, performance and quality, calculating your OEE score can be accomplished with the following equation:
Availability x Performance x Quality = OEE
A score of 100% means that all parts of the manufacturing process are running efficiently at all times.
But what if your score is not 100%? What if you discover that your production process is not very efficient at all?
By measuring all parts of the manufacturing process individually, calculating OEE helps you see which areas of the manufacturing process need improvement. If you are producing quality parts, but do so at a slow rate, you know that you need to improve performance. If machines are constantly running, but half your parts are not usable, you know that you need to focus on improving quality.
That is what makes OEE metrics so valuable. In addition to showing how efficient your manufacturing process is, it also shows you which areas can be improved upon.
What is OEE?
OEE stands for overall equipment effectiveness and is the best standard for measuring the effectiveness of any manufacturing process by identifying how much of the manufacturing time is productive.
What determines OEE?
Three factors are measured when determining OEE: availability, performance and quality.
What is availability?
Availability shows how efficient production is during planned production time. It considers all equipment failures (unplanned stops) as well as setup and adjustments (planned stops). A score of 100% means production never stops.
What is performance?
Performance is the measurement of idle time and small stops. If performance is at 100%, then production is always running at max speed.
How is quality determined?
Quality is determined by subtracting the number of defective parts that are produced from the number of quality parts that are produced. A quality score of 100% means that none of the parts produced need to be scrapped or repaired.
How can I determine my OEE?
Overall OEE can determined through the simple equation:
Availability x Performance x Quality = OEE
In order to execute this equation, you must also determine the percentages of your availability, performance and quality.
How can I determine availability?
To determine availability, use the equation:
Run Time/Planned Production Time = Availability
How do I determine quality?
To determine quality, use the equation:
Good Parts/Total Parts = Quality
How do I determine my performance score?
Performance can be determined by using the following equation:
Actual Output / Standard Output
What events hurt my OEE score?
Production slowdowns and stoppages, along with quality rejections, are obvious. Other events such as shift changes and lunch breaks can have a negative impact if you are expecting to have production continue during those times.
Does shutting down the plant have a negative effect on OEE?
No. Plant shutdowns (including holidays and time periods where there are no shifts scheduled) are not included in determining OEE.
What are the most common ways production is lost?
There are six main ways production is reduced. Commonly referred to as the six big losses, they include: unplanned stops, planned stops, small stops, slow cycles, production rejects and startup rejects.
How can tracking OEE help my company?
By tracking your OEE, you will be able to see which areas of production are running efficiently and which areas need improvement. This will allow you to focus on improving those areas, which will increase your OEE score and level of production.
What is TEEP?
TEEP stands for total effective equipment performance and measures the maximum amount of production capable of being produced.
What is the difference between OEE and TEEP?
OEE measures the amount of time you are productive during planned productive time and TEEP measures the maximum capacity that you can manufacture if you operated 24 hours a day, 7 days a week. In other words, TEEP shows you how much your operation could potentially produce if it runs non-stop.
How can OEE be improved?
There are multiple ways OEE can be improved, but the most popular way is through lean manufacturing.
What is lean manufacturing?
Lean manufacturing strives to reduce processes that add no value to the product being built. This means cutting out unnecessary stops and idle time. OEE was created as a way of improving lean manufacturing.
How can I use OEE to my advantage?
The best way to use OEE to your advantage is to fix the troublesome areas of the manufacturing process. To do this, you need to identify the trouble areas, determine how to fix them, and execute that plan. Once the problem is resolved, your OEE score will improve and so will your production.
Overall equipment effectiveness (OEE) can be one of the most helpful tools for boosting manufacturing processes and reducing unplanned manufacturing downtime. It is one of the key performance indicators (KPI) for progress being made on shop floors in terms of increasing equipment availability, higher performance rates of equipment and enhanced production of qualified goods. If a manufacturing facility can track OEE in a standardized and impartial manner and make appropriate adjustments, then the ensuing OEE score will significantly aid total productive maintenance (TPM) initiatives. These results will lead to an increase in profits and a positive work environment.
OEE is not just a methodology to track underperforming processes and equipment. It’s also a way to end the blame game in the workplace. OEE tracking can help you assess snags in the production line and understand why those complications are occurring. Using numbers and percentages, the assessments are free of opinions and prejudices and explain if underperforming machinery is due to unplanned manufacturing downtimes or performance issues during production. OEE can also pin-point whether the machine operator is wasting too much time in idling and process changing or is losing time due to lack of skill or training. OEE also gives you a clear picture about the quality performance of manufactured goods and if time and resources are being wasted due to the production of unsellable products.
Overall equipment effectiveness ratios give you the opportunity to improve at every stage. Production can be increased by specifically working on problem areas without having to revamp the entire production line. From scheduling timely maintenance routines to retraining operators, everything can be streamlined without affecting other processes.
How OEE Assists You
OEE gives you the power to understand the three most important things that affect output on the shop floor:
Availability Rate: Equipment Availability and Actual Operating Time (Planned Operating Time–Downtime)/Total Planned Operating Time=Availability
Here, availability rate brings out the downtime loss.
Performance Rate: Actual Productivity of the Equipment (Number of Goods Being Produced in a Shift)/Potential Productivity of Equipment (Number of Goods Expected to be Produced in a Shift) =Performance
Here, performance rate brings out the speed loss.
Quality Rate: Number of Qualified Goods Produced in the Shift/ Number of Total Goods Produced=Quality
Here, quality rate brings out the quality loss.
Overall equipment effectiveness is the cumulative result from the product of these three factors. The higher the OEE percentage is, the higher the productivity becomes and lower the manufacturing downtime goes. A higher OEE percentage encourages lean manufacturing thanks to efficient management of resources and reducing lost time and resources. If these three types of waste are managed properly, the system can be made leaner and highly optimized.
Increasing OEE Percentages
For a higher percentage of OEE and eventually achieving lean manufacturing, it is important that the manufacturing units take a few basic initiatives.
Train and Retrain Your Employees: This is one of the most significant steps for achieving a higher OEE percentage. A bad or unskilled employee will never yield high productivity and your OEE calculations will remain below satisfactory. Training and retraining your employees not only keeps them acquainted and updated with the machinery and new technology, but also keeps them familiar with your expectations, which keeps them motivated. Your employees must know the importance of OEE and its contribution to the production line so that they can also contribute to the process.
Standardize Your Measurements: From one unit to another, the parameters for what is important can differ and make comparisons and correlations difficult. Measurements should always remain the same so that comparative performance analysis becomes easier for everyone to understand.
Bring Automation to Your Tracking: In this fast-paced world, waiting for exact OEE results will kill the sole purpose of employing an effective overall equipment effectiveness strategy. You need to know which section is struggling in real time so that problems can be prioritized and addressed properly. Automating your OEE tracking will give concerned departments a chance to analyze simplified data in real time so that problems can be addressed in real time. This will reduce manufacturing downtime and increase productivity.
Overall equipment effectiveness calculations are the easiest way to reduce losses and increase productivity. A great OEE score will make your manufacturing process leaner while also cutting down on manufacturing downtime. Instead of trying to understand complex numbers, your work will become easier and synchronized while also infusing a positive attitude on the shop floor thanks to clearer job responsibilities that hold employees accountable for their tasks.
Lean manufacturing has some of the most revered principles in the production industry. Managers want to incorporate these principles into company culture and processes because of the potential for excellent results and increased production.
There are two main thoughts on exactly what lean manufacturing is. Some see it as a way of eliminating waste in the production line. Others see it as achieving economical perfection through workplace organization and working methodologies in an orderly manner.
The fact is, lean manufacturing is both of these ideas, and a whole lot more.
What is Lean Manufacturing?
Lean manufacturing is a systematic approach that aims at adding value to consumer products while lowing the cost of manufacturing. Lean manufacturing strives to attain order, standardization, discipline and respect at the workplace, while also maintaining safety. Using tools such as TPM, OEE, 5S techniques, and others helps eliminate waste during production, which maximizes profits.
Simply put, lean manufacturing produces high quality goods in a shorter time, all while adding value to the product. This process aims at maximizing profit by eliminating waste, not by increasing prices.Hence, customers get a better quality product for a great price.
Reducing Waste in the Manufacturing Processes
This is one of the most important parts of being lean. That’s why lean manufacturing focuses on identifying waste in all aspects of production. Items that are eliminated during lean manufacturing, include:
- The use of needless tools and equipment
- Overuse of manpower
- Unnecessary processes that are time-consuming for workers and equipment that lead to idle workers and machines.
- Delaysduring production
- Waste produced by faulty products
- Lost labor, time, money, management and resources by rectifying troubled areas of production.
- Unnecessary inventory loads in the production house
- Over production caused by first producing and then creating an artificial demand. This is done by studying supply and demand needs.
Adding Value to Products
Lean manufacturing places great emphasis on adding value to products. Value can be added by producing the desired quantity of products and delivering them on time without deteriorating the quality. By synchronizing the production cycle, quality products can be delivered using the same costs but with higher profit margins thanks to waste elimination and lower inventory costs. This allows the consumer and producer to come out winners.
Creating an Organized and Safe Workplace
A clean workplace is vital to ensure safety. A clean workspace that is free of obstructions reduces the chances of accidents, while also invoking a positive work environment. The workforce is trained and inspired to strive for cleanliness and orderliness so that problems can be detected quickly and resolved, which results in less downtime.
Reduce Unplanned Downtime and Frequent Breakdowns
Applying equipment effectiveness techniques to detect problems in real time is a great way to reduce unplanned downtime. Lean manufacturing aims at studying why frequent downtimes occur and then eliminating the causes. This leads to a better overall equipment effectiveness score because of less downtime and higher productivity.
Lean manufacturing is a broad concept with simple principlesthat make the production process more efficient. It allows companies to become more consumer-friendly by producing higher quality products more quickly and at the same cost.
Professionally speaking, manufacturing downtime is a manager’s worst nightmare. The scarier part is that it’s a regular phenomenon. The good news? While it may not be possible to entirely eliminate downtime, it is possible to greatly reduce manufacturing downtime. Downtime tracking, along with proper understanding of the root causes and subsidiary issues, is an essential piece.
- Machinery breakdown: This is a fairly common scenario, especially on shop floors of busy industrial units utilizing their full potential and running 3 shifts a day. New orders have to be filled, but it doesn’t make sense to keep expanding the shop area. In these cases, the best solution is to maximize the performance of existing machinery.The race to increase production can often lead to neglecting routine maintenance like oiling, greasing and dusting machines. Small and simple checks like looking for overheating and adequate production can greatly help in downtime tracking. However, these checks aren’t the responsibility of the operator alone. Working with a machine day in and day out can make it easy to miss the little signs that it’s about to break down. This is one task that should be externally managed by the people who are going to get hurt by it the most, the management.
- Skilled, trained and updated employees: Every establishment evaluates and interviews new recruits at all levels. Employees come, and the loyal and hardworking ones remain with the company for the long haul. But is it the same with machines? In this age of competitiveness it isn’t really possible to maintain necessary speed with outdated machines. So, the management does the right thing by upgrading to new machines as necessary.What about the employees? Were they retrained and upgraded with same sincerity? This is a factor that is very beneficial in reducing manufacturing downtime. Downtime may be a result of many factors like professional inefficiency due to lack of proper training or even stubbornness of the employees to update their skills. Many times, senior employees don’t show the same drive to learn new things because of ego, overconfidence or even sheer laziness. It’s important that regular, mandatory training sessions are scheduled and employees are evaluated relative to the machines they regularly use. Downtime tracking helps in finding the potential candidates, showing inefficiency so that employees can be retrained.
- Efficient manufacturing processes: Assembly line production systems have proven to be a big boon to the industrialized manufacturing processes. These systems tend to make a person specialized to do a particular job by continuous repetition. But, a chain is only as strong as its weakest link. What if there is a snag in one process, or it isn’t working at its full potential? It will put extra burden on both the equipment and operators of subsequent processes, leading to a greater danger of manufacturing downtime.Downtime tracking helps one examine these snags and bottlenecks in detail. The faulty process can be tracked and mended before the greater damage is done, leading to a streamlined version of the entire process.
- Advance spares and tools: Business is all about profit. A penny saved is a penny earned, so there will always be a tussle between requirement and procurement. Although it may seem wise to only keep necessary parts on hand, can a standard shop floor really predict which breakdowns will happen?This is where downtime tracking plays a major role. It helps you to understand the regular causes of mechanical breakdowns. It helps you to analyze particular spare parts that malfunction, according to the frequency of occurrences. This will not only help in keeping the spares and knowledge handy, but also help eliminate idle employee time while parts are being procured.
- User feedback and employee contribution: Most management decisions come from the top down, based on facts presented by people who aren’t on the shop floor. Although it’s a good idea in theory, the reality on the ground often differs from the scenario management thinks they see.When professionals request new machinery or an upgrade, they often take it for granted that production projections are for ideal conditions, which don’t typically exist. Hence achievable output is usually less than the pitched output. Various factors like environmental conditions, ease of operation, and complicated functioning can all contribute.It is very important to gather user feedback to fully understand a machine’s efficiency and handling. The issues could range from mechanical hindrances to handling difficulties or vulnerability of a machinery to function in a particular environment. Issue can only be solved properly if a proper approach is applied to measure the output and the potential hindrances. If employees are kept in the loop, not only can real-time problems could be solved, but they also feel encouraged and motivated to curb manufacturing downtime.
- Careful tracking of downtime: Even if you’ve been taking all the right steps to reduce manufacturing downtime in your plant, there could still be some solutions that are just out of reach. Even when you are well-prepared for downtime, you could still find machines not running because employees are not starting on time. Such problems can only be effectively solved if your downtime tracking precisely pinpoints the issues. Manual downtime tracking always leave space for errors of judgment based on subjective analysis and delays.Today, many downtime tracking software options are available that will cater to this exact requirement precisely and simply. The downtime tracking software prioritizes information and indicates in real time which machine needs repair and maintenance.These tools also assess the potential productivity killers that stand in the way of your facility’s long-term production goals. For achieving ‘world class’ to ‘perfect’ overall equipment efficiency goals, downtime tracking could be a perfect solution. It will help you not only in finding the breakdowns as soon as they occur, but also in understand the reasons for frequently recurring problems. It will provide you with the advantage of taking preemptive measures.
- Holistic approach: The work environment in big industrial units can be frustrating and overwhelming. It’s human nature to keep trying for more, especially when there are deadlines to meet. Machines, as well as employees, tend to break down or reach their boiling point when things get busy. Use a holistic approach for both employees and machines to help avoid extra pressure. If the system is perfectly oiled and greased, there are far fewer chances of developing friction.Downtime tracking helps to keep the system oiled and greased for the greater good of both the people and the company. It keeps the communication channel open, shows the possible factors causing the downtime or snags, and avoids the unnecessary “blame game,” which is a fairly common scenario in high-pressure work environments. Creating a culture of accountability helps promote a work environment that is cordial, healthy and supportive.