OEE: Overall Equipment
Effectiveness", I've heard about that before!
Unfortunately, in many facilities, that's all OEE (Overall Equipment
Effectiveness) is to the personnel. Something they heard of, talked
about or read about. Many maintenance departments today still do not effectively
utilize the OEE tool even though it's widely used among the world class
of OEE: Overall Equipment Effectiveness
performance of a single piece of equipment or even an entire factory, will
always be governed by the cumulative impact of the three OEE factors: Availability,
Performance Rate and Quality Rate.
is a percentage derived by multiplication of the three ratios
for the factors mentioned above. The OEE percentage is used for
analysis and benchmarking.
In speaking with Mike Sondalini (Best Practice
Facilitator/Author) about a similar topic - Root Cause Analysis (RCA),
Mike makes a statement I think identifies one of the main barriers to
successful OEE implementation today.
Mike: "I must admit that a
lot of people know of RCA and its implications but very few people use
it. I think it's because they aren't able to convince enough of
the right people at their work place to try it and then to stick with
In my experience, OEE has had better coverage than the other analysis
tools like RCA or Fault Tree Analysis
(FTA). This may be due to the fact
that Overall Equipment Effectiveness is also a benchmarking tool as well
as an analysis tool. In an attempt to grow the numbers who profit from
using OEE, I will go over what OEE is,
why you should use OEE, and how to use it.
OEE = Availability X Performance Rate X
Availability - Percent
of scheduled production (to measure reliability) or calendar hours 24/7/365
(to measure equipment
utilization), that equipment is available for production.
Note: measures the percent of time that the equipment can be used (usually
total hours of 24-7-365), divided by the equipment uptime
Performance Rate - Percent
of parts produced per time frame, of maximum rate OEM
rated production speed at. If OEM
specification is not available, use best known production rate.
Note: Performance efficiency is the
percentage of available time that the equipment is producing product at
its theoretical speed for individual products. It measures speed losses.
(e.g., inefficient batching, machine jams)
Quality Rate - Percent
of good sellable parts out of total parts produced per time frame.
Note: Determining the percent of the
total output that is good. (i.e. all products including production, engineering, rework
Example: 50% Availability (0.5) X
70% Performance Rate (0.7) X
20% Quality Reject Rate (results in 80%(0.8) acceptable) =
(Please see www.DowntimeCentral.com/OEE_TEEP.htm
for a free online calculator to practice with.)
Why use OEE?
Overall Equipment Effectiveness (OEE) can be used to save companies
from making inappropriate purchases, and help them focus on improving the
performance of machinery and plant equipment they already own. OEE is used
to find the greatest areas of improvement so you start with the area that
will provide the greatest return on asset. The OEE formula will show how
improvements in changeovers, quality, machine reliability improvements,
working through breaks and more, will affect your bottom line.
As you strive towards World Class productivity in your facility, this
simple formula will make an excellent benchmarking tool. The derived OEE
percentage is easy to understand and displaying this single number where
all facility personnel can view it, makes for a great motivational
technique. By giving your employees an easy way to see how they are doing
in overall equipment utilization, production speed, and quality,
they will strive for a higher number!
I highly recommend using an automated equipment monitoring system with
an LCD display for your OEE in each respective area of your facility so
all can monitor. To the employee in each area, it will become as common to
glance at, as the speedometer on a car. While showing machine speed with
such a display helps, machine speed is only a small percentage of your overall
equipment effectiveness - OEE.
How to use OEE?
Implementing the Overall Equipment Effectiveness formula in your
facility can take on many different forms. It can be used as an
analysis and benchmarking tool for either reliability, equipment utilization, or
both. Don't let indecision on how to best use OEE become a barrier that
prevents you from using it at all. Start out small if necessary,
picking your bottleneck to collect the OEE metrics on.
Once you see first hand what a valuable tool it is, you can gradually
take OEE measurements on other equipment in your facility. If you work in
manufacturing , there is no substitute for going out to the shop floor
and taking some rough measurements of OEE. You will be surprised by what
While monitoring OEE per equipment brings focus on the equipment
itself, it may not provide true cause of major costs, unless the cause is
obvious. For example OEE can appear improved by actions such as purchasing
oversize equipment, providing redundant supporting systems, and increasing
the frequency of overhauls.
To improve your OEE percentage, you will need to use other tools and methodologies
available to you, like TDC, RCA, FTA etc. TDC is a
relatively new methodology that focuses on True Downtime Cost for
justification and making better management decisions. You can learn more
about TDC at www.downtimecentral.com/tdc.htm.
TDC overcomes the main implementation barrier for OEE by giving
maintenance managers a tool in which to show actual cost savings in
relationship with OEE.
For the ultimate decision making tool, incorporate
OEE with TDC.
into your data collection. (contact me for a free power point)
Back End: Incorporate
into your software reporting by requiring it of
your software vendor.
On a larger scale, you should not only be calculating equipment OEE,
you should also be calculating a production line OEE, and within a corporation,
a facility OEE. Factory automation companies are starting to incorporate
OEE into the reports they generate automatically! There are also a few companies
who specialize in providing shop floor data in automatic easy to read OEE
reports. If you would like more information or recommendations on
companies that can get your automated OEE system up and running, please
contact me at bin95 @ bin95.com,
I'll be happy to recommend a service provider.