Maximise production with Overall Equipment Effectiveness (OEE)

Overall Equipment Effectiveness (OEE) is a common Key Performance Indicator within industry, which compares actual production output with the maximum capacity of production processes.

OEE is defined as the percentage of actual production that meets set specifications, relative to theoretically achievable production within a given time period. This value is applicable to individual machines and processes as well as entire production lines. 
 
Organisations that are able to measure and manage their OEE reliably and qualitatively can make targeted improvements. This enables them to strengthen their competitive position by making production processes smarter, more efficient and sustainable, ultimately leading to achieving Operational Excellence. 

Why is OEE used? 

When production machines are idle, not running at full capacity or not producing to specifications, the efficiency of a production facility drops. Overall Equipment Effectiveness is a valuable KPI to identify downtime, lost capacity and production errors so that targeted improvements can be made. 

Besides OEE, there are more performance indicators that help plant managers monitor the performance of production facilities. Indicators such as FPY and TPM are part of Lean Manufacturing. 

TPM (Total Productive Maintenance) is a holistic approach to machine maintenance developed by Toyota that aims to achieve perfect production, without breakdowns, minor stops or failures. OEE and TPM complement each other in the pursuit of production optimisation, with both methods focusing on minimising downtime, defects and inefficiencies to maximise productivity.  

Whereas OEE focuses specifically on the effectiveness of machinery and equipment, TPM has a broader, proactive approach that focuses on the management of machinery and maintenance processes. OEE identifies factors that affect the effectiveness of production processes, such as unplanned downtime, declining performance and quality losses. TPM instead focuses on eliminating the causes of these losses by improving maintenance, increasing operator skills and promoting a culture of responsibility and ownership on the shop floor. TPM uses OEE as a measurement tool to improve the effectiveness of maintenance and machine management, leading to higher OEE scores.  

In the long run, OEE helps identify inefficiencies, while TPM ensures that machines operate optimally and operators are able to spot and prevent problems early.

You can identify these production problems with OEE 

Overall Equipment Effectiveness can help identify various production problems. Common factors that affect lead time and are reflected in OEE dashboards are related to the three main pillars of an OEE calculation.

Production line availability

One of the most common causes of low production line availability is unplanned downtime. This can occur due to breakdowns, maintenance, or delays while changing production lines. By providing real-time visibility of production line availability through OEE dashboards, manufacturing companies can effectively apply predictive maintenance and reduce production losses.

Performance loss during the production process

Performance loss is also reflected the OEE value. This can be due to lower speeds, theoretical production limits of machines, micro-stops or sub-optimal settings of production equipment. By quantifying this through OEE calculations, one can find out more specifically which factors are responsible for the speed reduction and which optimisation steps are prioritised.  

In practice, this could mean giving operators extra training, redesigning processes or making adjustments at IT and OT level. Consider implementing Lean Manufacturing solutions such as Factorise. A Mendix low-code-based solution aimed at optimising the shopfloor.

Quality loss

Loss of quality comes mainly from products that do not meet prescribed quality standards. This in turn leads to rejection, rework or complete rejection of products, all resulting in loss of efficiency and resources. By accurately measuring and analysing quality loss through OEE, companies can identify the exact steps in the production process where quality problems arise.

Calculate OEE

To measure Overall Equipment Effectiveness, multiply the following factors: Availability, Performance and Quality. 
OEE = Availability x Performance x Quality 

Calculate availability

To calculate availability, we divide the actual production time by the planned production time. In practice, for example, a production line may be available for 8 hours (480 minutes), but may also undergo 1 hour of planned maintenance. This results in a net production time of 7 hours (420 minutes). 
 
Availability = (net production time / planned production time) x 100 
For example: (420 minutes / 480 minutes) x 100 = 87.5% 

Calculate performance

To measure performance, you measure how fast production is going compared to the maximum speed possible. Suppose your production process has a maximum theoretical output of 600 units per day, but in reality you produced only 500 units. Then the calculation would look like this: 
 
Performance = (Actual output / Theoretical output) x 100 
For example: (500/600) x 100 = 83.3%

Calculate quality

To check the quality of a production process, divide the number of well-produced products by the total number of products produced. Suppose a production process uses a mould and can simultaneously inject 48 products. For technical reasons, 3 of the holes are blocked and the calculation looks like this: 

Quality = (Number of well-produced products / Total number of products produced) x 100 
For example: (48/43) x 100 = 93.75% 

OEE formula

To calculate Overall Equipment Effectiveness, multiply availability by performance and quality. Using the aforementioned examples, you get the following calculation:
OEE = 0.875 x 0.833 x 0.9375 ≈ 0.544 or 54.4%

An OEE score of 54.4% indicates that there is definitely room for improvement in the production process. In world-class manufacturing processes, the OEE score is usually above 85%. 

Real-time OEE calculation

As soon as you want to apply digital manufacturing in a modern production process, it becomes increasingly crucial to gain real-time insight into the Overall Equipment Effectiveness. By linking your existing production machines with our Low-Code MES solution, you gain direct insight into the OEE performance of your production process. 

Using the OEE dashboard, you gain direct insight into the current availability, speed and quality of your production process. This enables shop floor managers to realise Lean manufacturing more effectively.  

Start with OEE optimisation today

Starting immediately to optimise your OEE can be challenging. To effectively get a grip on OEE, it is important that you start with a thorough OEE calculation.

You may run into some common challenges when making the first calculation. These include lack of reliable machine data, insufficient understanding of loss factors, lack of support from operators or management.

All these challenges sometimes make it seem a bit overwhelming to get off to a successful start. If you are at the very beginning of the process, Emixa can help you create the solid foundation for real-time OEE measurement. We also offer solutions to integrate complex (legacy) IT and OT landscapes with modern OEE dashboards.