What Is OEE?

How efficient is your organization with its manufacturing time? How do you know? Overall Equipment Effectiveness, or OEE, is the industry-standard metric that considers three ratios — availability, performance, and quality —  to determine how efficiently your machine, process, or entire facility is running. This video takes a step-by-step approach to calculating each ratio and determining your OEE benchmark.

The Sepasoft OEE Downtime Module Here
 

Video Transcription:

How efficient is your organization with its manufacturing time? How about last month? Were you more efficient? Less? How do you know?

Overall Equipment Effectiveness, or OEE, is the industry-standard metric for tracking asset utilization so that you can get the most out of what you already have.

OEE considers three ratios to determine how efficiently your machine, process, or entire facility is running. The ratios are:

• Availability: which is the actual runtime to the planned production time
• Performance: which is the of number of units started to the number of units processed at the standard rate
• Quality: which is the number of good units produced to the number of units started

Using these ratios, organizations can analyze their operations, gain valuable insight, and then make changes to improve production and equipment throughput.

Let’s take a closer look at each of these OEE metrics to see how they quantify efficiency.

We’ll start with availability, the ratio of actual runtime to planned production time.

The concept of planned production time is key here. Availability excludes any planned downtime, so events like breaks, lunches, safety meetings, scheduled maintenance, or really any time where you do not plan to run the process you’re calculating the availability for. What this ratio homes in on is the inefficiency caused by not running that process when you planned to.

Here’s an example:

Your process is scheduled to run for two 8-hour shifts, each with two 15-minute breaks and one 30-minute lunch.

8 hours times 2 is 16 hours.

15 minutes times 2 is 30 minutes, plus the 30 minute lunch break equals 1 hour planned downtime per shift, meaning 2 hours planned downtime total.

16 minus 2 equals 14 hours, or 840 minutes, of planned production time.

Now, let’s say during this 14-hour production period, there are 5 downtime events, one of which was a major mechanical malfunction, totaling 1 hour and 35 minutes of unplanned downtime.

14 hours planned production time minus 1 hour and 35 minutes of unplanned downtime equals 12 hours and 25 minutes, or 745 minutes, of actual runtime.

If we go back to our OEE availability equation: 745 minutes of actual runtime divided by 840 minutes of planned production time equals 89% availability.

Now, let’s look at performance.

Performance is the production rate, meaning the number of units started compared to the number of units processed at the standard rate. Notice that it’s the number of units started, not units finished. The standard rate is simply the rate the machine was designed to run at. If a machine is running slower than it was designed to, then it has untapped capacity and is therefore less efficient than it could be.

To illustrate this point, let’s build off the previous example.

The process from before is designed to run at a standard production rate of 120 units per hour, or 2 per minute. Multiplying our actual runtime of 745 minutes by 2 units per minute, we can expect to start 1,490 units at the standard rate.

Now let’s say that a malfunction happened early in the shift and made one of the operators unnecessarily cautious. This operator slowed down the process so it only produced 90 units per hour, or 1.5 per minute.

745 minutes times 1.5 equals 1,118 units started.

Going back to our OEE performance ratio, 1,118 units started divided by 1,490 expected equals 75% performance.

The final OEE ratio is quality: the number of good units produced to the number of units started. This calculation is pretty straightforward.

Continuing with the example, your Quality Control department found that 65 units do not meet quality standards.

1,118 minus 65 equals 1,053 good units produced.

1,053 good units divided by 1,118 units started equals 94% quality. 

With all three of these ratios, we can determine our OEE.

Overall Equipment Effectiveness equals availability, times performance, times quality.

Using our previous examples, multiplying 89% by 75% by 94% equals 63% OEE. This number may seem low, and while it does indicate plenty of room for improvement, it’s important to remember that OEE should not be compared to a perfect 100% score. Ideally, your process would have no downtime, be constantly running at the standard rate, and have no bad product. But no piece of equipment exists in an ideal world. An OEE of 85% or higher is generally considered a world-class score. Think about your OEE right now as a benchmark. 

So whatever your current score may be, OEE allows you to translate your availability, performance, and quality into a percentage that can be compared from shift to shift, process to process, facility to facility, or industry to industry. And tracking OEE gives objective, actionable data to improve operational efficiency over time.

If you're interested in calculating and improving your downtime, Sepasoft, one of our Solution Partners, actually offers an OEE Downtime Module for the Ignition platform. It gives you the tools necessary for making data-driven decisions to maximize your manufacturing effectiveness.