What is Overall Equipment Effectiveness(OEE)?
OEE (Overall Equipment Effectiveness) is the key standard for measuring manufacturing productivity and analyzing the equipment performance. It is a combination of the Machine Availability, Performance and product quality. OEE is a single important metric that can help you track your delivery timeline, your operator performance & efficiency, machine health and the overall effectiveness. By optimizing OEE, you can improve quality and increase efficiency in your production lines and helps increase the capacity of your shop floor.
Define OEE and related KPIs
The three major influencers are the Availability of the machine, performance of the operation and the product quality. Factories will always thrive to keep the quality high and keep it nearer to 100. Performance of the operation can vary based on the operation to be performed on the part or operator. The machine availability should be kept maximum by reducing the impact of machine downtime.
The OEE calculation as well vary based on the process you follow at the shop floor. You can identify the right way to calculate OEE and make it easier to require action against the underlying causes of lost productivity.
Availability
Maintenance department plays a major role to upkeep the availability of the machines. The reduction of the MTTR (Mean time to repair) and increasing the MTBF (Mean time between Failure) helps improve the machine availablity for the production. Material availability is one major concern in the shop floor that affects the runtime. The planning should be made in such a way that the material is available for the production keeping the overhead material cost as well in mind.
Availability is calculated as a ratio of Machine Run Time (operating time) to Planned Production Time or the working hours of the factory. It is advisible to remove the management loss from this planned time.
Availability = Machine Run Time Planned Production Time
Runtime is the time at which the machine is actually producing parts. Stoppage times include all times like operator breaks, material unavailabilty, breakdowns, etc.,
Machine Run time = Planned Production Time – Machine Downtime
Performance
Higher Performance can be achieved in a highly automated system. However, not all process can be automated. In the semi automated process, operator comes in to handle parts inbetween. At times the machines runs slower due to some reason which brings down the actual number of parts that can be processed.
Performance score is the ratio between Time that should be utilized to create the parts that produced to the actual runtime.
Performance = (Ideal cycle time * no of parts produced) Run time
The Ideal cycle time is the fastest rotation time that your process can achieve under optimal conditions. Therefore, when multiplied by the total count, it is the net runtime (the fastest time to manufacture the components).
Since the ratio is a reciprocal of time, the performance can also be calculated as follows:
Performance = (Total count / Run time) Ideal run rate
Efficiency can not exceed 100%. If it is, it usually indicates that the ideal cycle time is set incorrectly. However, the R & D efforts can be under taken to reduce the cycle time to improve the efficiency.
Quality
Quality considers manufactured parts that don’t meet standards, as well as parts that require reworking. Remember, the OEE standard is similar to the first pass yield, in that the good parts define the parts that pass the manufacturing process successfully for the first time without the need for any rework.
Quality score is calculated as follows:
Quality = Number of good parts produced Total part produced
This is equivalent to taking the ratio of full production time (only good parts produced as quickly as possible without stop time) to net run time (all parts produced as quickly as possible without stop time)
OEE Calculation
OEE is a measure of how all the three factors is performing. The higher the OEE, the factory is running in good condition.
OEE = Availability X Performance X Quality
If the equations for availability, performance and quality are changed to the above and reduced to their simplest terms, the result is:
OEE = (Good count × Ideal cycle time) Planned production time
This is the “simple” OEE calculation described earlier. Also, multiplying a good count by the ideal cycle time, as described earlier, results in a full production time (producing only good parts, as quickly as possible, without stopping time).
Why OEE is important?
Machine Utilization, quality of the produced goods & performance of the Machine/Operator are the core of any production industry. OEE is one common metric that defines all the three put together. The higher the OEE, the shop floor produces higher number of shippable products and lower will be the cost used to produce a part that can be sold to customers. This is especially true for the long term, but often for the short and medium term as well. These include adding new transitions, increasing overtime, purchasing new piece of equipment, outsourcing production or opening a new facility.
How to Track & Improve OEE?
To improve OEE, the first step is to understand the current state of the factory and start tracking it. For this, you need a robust Smart Manufacturing Execution System (MES) that can monitor all three key OEE metrics by acquiring data directly from the machines. Additionally, any manual data that cannot be directly acquired must be entered into the system accurately and promptly, ensuring no gaps in data collection. By implementing a reliable MES, you can gain a complete view of your production processes, enabling informed decisions to boost efficiency and reduce downtime.
- Conducting regular scheduled maintenance will bring the unforseen downtime improving availability
- Make material available for each machines - improves uptime of machines
- Knowledge training for the operator on how to run the part - improves performance
- Proper process parameter setup for the operation - improves quality
- Timely and quality lubrication and coolant flows - improves performance and quality
- increase sample inspection - reduces rework
What is a good OEE Score?
The world class OEE Score stands above 85%. Anything between 65 to 85% is in the acceptable limits. However anything less than 65% is bad and have a lot of scope for imporvements. The unfortunate reality is that most companies today have an OEE score of around 40%, and they are not calculating it.
Availability
93-95%
Performance
93-95%
Quality
>99%
Six big losses to avoid
The three OEE factors that correspond to six major losses provide a robust and manageable framework for categorizing your losses. This makes it easier to identify where your improvement efforts will have the biggest impact. Common causes of equipment-based production losses are also addressed in this framework.
First, let’s characterize the six big losses:
Availability loss
- Unplanned Stops – Machine / Equipment failures
- Planned Stops – Setup and Adjustments
Performance loss
- Small Stops – Idling and minor stops
- Slow Cycles – Reduced speed
Quality loss
- Production Rejects – Process defects
- Startup Rejects – Reduce yield
Overall, the Six Big Losses is a framework that categorizes the problems manufacturers face every day. Continuing to work within this framework to take action, one loss at a time, will constantly improve the OEE score.
Shop floor metrics (TAED)
OEE is a great tool for managers, but it can be a bit brief for shop floor employees. The shop floor employees will perform better when delivering real-time, easy-to-understand and highly motivating goals. The best example of an effective set of plant floor measurements is TAED:
- Target : Real-time production target driven by the planned production rate
- Actual : Actual production number
- Efficiency : Goal ratio and actuality; How far forward or backward the production is based on a percentage
- Downtime : Accumulated unplanned stop time for real-time updated change; It has a strong focus on a key action development area
Do's & Don'ts in the OEE Tracking
Accuracy and consistency are essential to effectively track OEE and produce significant improvements. Adhere to these best practices to make sure your OEE data accurately depicts your manufacturing process and fosters expansion
- Don’t compare your OEE with a different process
- Compare the same machine with yesterday, last month and more. A growing trend is important.
- Use the right OEE measurement tools and right calculations specific to your process.
- Automate Measurement of the shop floor data on the Availability, performance and quality.
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