What is OEE?

OEE is an essential aspect to total productive maintenance (TPM), as well as Lean manufacturing. The acronym OEE stands for Overall Equipment Effectiveness, a best practice that evaluates how productive a facility is each day. It analyzes production rates and attempts to determine areas that can be improved; on large production lines, it can be difficult to see whether operators and equipment are performing efficiently. If production isn’t as efficient as possible, OEE considers every reason possible for this, including minor stoppages, breaks or lunches, shift changeovers, and machine breakdowns. No matter how insignificant these losses, they do add up over time.

Overall Equipment Effectiveness was developed in order to provide an accurate estimation of how much loss exists in the production process, to help ensure manufacturing is as efficient and as Lean as possible. There is a formula for calculating OEE so you can determine what maximum production would look like for your facility. Consider these factors:

  • Availability: The amount of time a production line is scheduled to be in operation (also known as uptime). This is calculated by taking the actual run time and dividing it by the time that was originally planned.
  • Performance: The actual speed a machine is able to operate by. This is calculated by multiplying ideal cycle time with the total number of produced parts, divided by run time.
  • Quality: The number of units produced versus the number of units that were actually sellable. Some parts or products end up having defects, so this is calculated by dividing the number of defect-free products by the total produced.

Then you can use the equation of Availability (A) x Performance (P) x Quality (Q)=OEE. Understanding your results helps to visualize losses and take the next step towards planning an effective way to increase production. OEE can also be used to track improvements as time goes on; you can regularly complete the equation on a regular basis to see how production is going, and determine whether plans for improvement were indeed effective. Analyzing your rates of production and figuring out how you can improve is a key factor in establishing a Lean business.


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