The Power of OEE : If You Can Measure It, You Can Improve It

One problem that organizations in the world of manufacturing commonly deal with has to do with the fact that there are so many different metrics to track that it can be easy to lose sight of the bigger picture.

Throughput. Cycle time. Process end time. Inventory turns. All of these things are important to stay abreast of, yes – but with so many key performance indicators in the wild, it can quickly prove overwhelming. How does product attainment actually relate to avoided costs? What do changeover times have to do with your overall performance? Which of these factors actually impacts your return on investment in a meaningful way? It can be very, very easy to overthink what should ultimately be a simple, straightforward situation.


That, in essence, is why Overall Equipment Effectiveness (or OEE for short) is so important. Not only does it help to eliminate a lot of the guesswork from the equation, but it helps to remove a lot of the confusion, too. What you’re left with is a vivid picture of the steps you need to take to improve the quality of your work, the speed at which you’re able to produce that quality, and how you can eliminate some of the common losses you may be experiencing along the way.

The Major Benefits of OEE Automation

By far, the biggest advantage of an OEE system is that it helps you better understand your current (not to mention potential future) performance in a visual way that is easy for anyone to understand.

Keep in mind that your OEE software will show you a percentage of the planned production time of your operations that is truly that – productive. A score of 100% means that you’re manufacturing the highest quality parts, with no down time, as quickly as you’re currently able to.

Once you know that, you have what you need to take a look at certain production inefficiencies that may exist, along with losses that you’re experiencing in the three aforementioned areas. By way of an associated manufacturing KPI dashboard, you can literally see which of your current operations are working well and which areas need improvement – allowing you to take action to fix the latter and empower the former as soon as you’re able to.

This also gives way to a deeper level of production insight than ever before. Don’t forget that you don’t know what you’re not measuring and if you’re not measuring something, you can’t improve it. More often than not, manufacturers in particular make the mistake of assuming that their operations are far more efficient than they really are. That, too, is the great thing about OEE – you can’t argue with a score like that.

Once you begin to measure everything about your operations, you see in cold, hard terms which areas of your facility are at peak efficiency, which ones may be moving in that direction and which ones are in dire need of improvement. From that perspective it’s about putting actionable intelligence in the palm of your hand – all so that you can make smarter and more informed decisions moving forward.

But even going beyond all of that, OEE also helps to identify not just losses, but the six major losses that manufacturers often deal with in terms of production. These include ones like:

  • Availability losses. This category encompasses not only breakdowns and failures, but also certain productivity issues that you may be dealing with in terms of setups and adjustments that take longer than they should.
  • Performance losses. This can involve not only small stops that end up taking up far more time than you realize in a given day, but also instances of reduced speed as well.
  • Quality losses. While certain start-up and production rejects are something of a foregone conclusion, you’d be shocked to learn how much money they’re costing you once you really start paying attention to why and how often they’re happening.

In a larger sense, OEE brings with it the major benefit of helping manufacturers achieve the highest possible return on investment for their equipment. Every single asset on a shop floor is an investment, and it’s one that deserves to be protected. In order to hit the biggest ROI that you can as quickly as possible, you need to guarantee that all of those machines are being used in the most efficient way that they’re capable of.

That’s a large part of what world class OEE reporting is trying to tell you. It’s giving you insight into not only where you can make changes to improve performance, but also what changes need to be made and how they should be best implemented. You can also see this information within the context of your entire organization. You can compare one piece of machinery to the next in terms of performance, or even compare multiple locations if yours is a larger business.

Regardless, that critical level of context is what allows you to continuously improve your operations – all of which makes you more competitive than ever as well.

How to Improve Your OEE Score

As stated, the highest possible OEE score that one can achieve is 100%. This means that you’re only manufacturing the best quality parts, without stop time, as quickly as you can.

If that seems like a lofty goal, that’s because it is – absolutely nobody gets an OEE score of 100%. These operations are still run by humans, after all, and humans aren’t perfect. Having said that, there are a number of steps that you can take to improve your OEE score as much as possible.

One of the best ways to improve your OEE score is to assign one person to monitor your progress, both now and in the future. Part of the reason why businesses struggle with OEE implementation has to do with there being “too many cooks in the kitchen.” What you need is one person who can take ownership of the long-term goal of improving OEE, monitoring your progress on a daily basis and making recommendations as to what you need to do to improve it, why, when and where.

For the best results, this person should be someone who is already well respected within your organization – particularly on the factory floor. They’re going to be making recommendations as to how certain people can improve the job they’re doing so it would be helpful to come at that from a place of mutual respect. Obviously, this should also be someone who feels comfortable working with large amounts of data as well.

Another major way to improve your OEE score has to do with embracing not only automation, but visualization with open arms.

OEE automation and data collection is important because you’re not relying on your operators to manually enter information. Manual data entry is a process that is prone for error and if you’re not tracking things accurately, you’re not getting nearly the level of insight that you thought you were. Plus, your operators already have a job to do and you don’t want to distract them from it.

Data visualization means taking all that information that you’re collecting and presenting it in a way that is easy for absolutely anyone to understand. Many OEE and downtime tracking solutions do this for you so you don’t have to worry about it. In addition to drawing conclusions and insights faster, data visualization by way of a manufacturing KPI dashboard is a way to take even complicated topics and make them far easier for anyone to understand.

As a note, however, you’ll also want to make sure that operators are making notes whenever issues like production stops come up. OEE automation is great for collecting cold, hard information about when a stop happened, how long it lasted for and similar bits of data. But nothing will replace that human insight which is why operator comments should be welcome. They should outline the conditions when the issue arise, what they did to fix the problem and more – all so that this can be preserved for the purposes of historical OEE reporting.

In the long-term, this level of visualization also brings with it the added benefit of allowing you to see the fruits of your labor in real-time. When you make a strategic adjustment in an effort to fix a particular problem with quality or availability, you’ll know almost instantly whether it is working or not. You don’t have to wait weeks or even months to find out if you were successful – you’ll know right away so that you can either double down on the path you’re on or pivot again in an attempt to find a better solution.

In the end, Overall Equipment Effectiveness is more than just another key performance indicator. It may very well be the most important way to see how far your organization has come and what direction it might be headed in.