There are certain parts of your business that you may be neglecting almost in a benign way. And even though you’re not thinking much of it, those parts could be costing you cost-effectiveness when it comes to your production process. So there are obvious benefits to learning how to reach 100% Overall Equipment Effectiveness (OEE).
Working out OEE and working toward pushing it to 100% can tremendously help in rising operational productivity and minimizing remaining material from the production operation.
We prepared a neat guide that will teach you how to reach maximum OEE by eliminating bottlenecks along the way. Those pesky glitches in your production lines all have their root causes. And if you figure out the root causes, you’re on a highway to maximum efficiency.
Definition of OEE ()
Overall Equipment Effectiveness, also frequently shortened as OEE, is the main performance indicator of an organization’s production line.
It’s a useful metric for lean product development, telling us how good our production lines are at churning out products. OEE covers the whole shtick – from resource allocation to shipping.
When you calculate your OEE, you can realize the opportunities that lie in your production operations and thus work towards profiting from those opportunities.
How to Calculate OEE
Let’s continue with the basics that will help you set the foundation for improving your Overall Equipment Effectiveness.
How do you calculate OEE for a part of your product? The Overall Equipment Effectiveness of one part is calculated by taking into account these components:
The main formula you need is this one:
OEE = Availability x Performance x Quality
Now we’ll look at these components one by one.
Availability refers to a machine’s uptime. It’s displayed in percentages that tell us how much (of scheduled time) a machine is available to run operations.
The main formula for calculating availability is:
Availability = Operating Time / Scheduled Time
A standard 8-hour (480-minute) shift is allotted for a particular sector. The scheduled break is 45-minutes, and the production halts during that time. Let’s further presume that there is unplanned downtime that will last for 45 minutes, too.
So here are our numbers:
Scheduled Time = 480 min – 45 min = 435 min.
Operating Time = 480 min – 45 min Scheduled Loss – 45 min Unscheduled Downtime = 390 min.
Now let’s calculate our availability:
Availability = 390 min / 435 min = 89.65%
Performance refers to the sector’s speed as a percentage of its planned speed.
A specific sector is planned to operate for an 8-hour (a.k.a. 480 minutes) shift with a scheduled break of 45 minutes, and again, the downtime is 45 minutes as well.
Operating Time = 435 minutes Scheduled Time – 45 minutes Unscheduled Downtime = 390 minutes
The Standard Rate for the produced element is 30 Segments/Hour or 1.2 minutes/Segment.
The sector produces 250 Total Segments during the shift.
Time to Produce Parts = 250 Segments * 1.2 minutes/Segments = 300 minutes
Note: The basis is Total Segments, not Good Segments. The Performance metric does not penalize Quality.
Performance (Productivity) = 300 min / 390 min = 76.9%
Quality refers to the percentage of Good Segments manufactured out of the Total Segments Started.
250 segments are manufactured. Out of that number, 25 are not working.
That leaves us with 225 working segments.
Quality = (Segments Manufactured – Defective Segments) / (Segments Manufactured)
225 Good Segments / 250 Total Segments Manufactured = 90%
Overall Equipment Effectiveness Benchmarks for Industries
Here are some benchmarks for OEE that can help you determine if you’re doing an optimal job or if the improvement is expected.
- 100% OEE Score: Wow, perfect production! Such a number indicates the production of quality parts and nothing but! Also, zero downtime!
- 85% OEE Score: Since perfection is rarely if ever, achieved, strive for an 85% score. That is a coveted long-term goal, especially for discrete product developers.
- 60% OEE Score: Also often sought-after among discrete product developers. Good, but shows that there is much to improve.
- 40% OEE Score: We’re entering problematic territory. This low score is not that uncommon. It’s quite a common percentage to get if you’re just starting to monitor and improve performance.
How to Get Better OEE?
You can’t get better at OEE if you’re not monitoring the percentages and paying attention to bottlenecks. Ensure you are measuring OEE smart – with the most recent solutions. Instead of gathering data from every device involved in the process, you should concentrate on the data from the ones important to your company. Rather than using historical metrics, it is essential to collect live data so you can understand what is going on right now. It is best to use an Overall Equipment Effectiveness formula that has been specifically created for your industry. For instance, in some production processes, execution and quality precede things such as smaller product flaws.
- Measure: Continuous reporting is the foundation for data comparison across the business, so your Overall Equipment Effectiveness solutions should begin by standardizing equipment performance metrics and Key Performance Indicators (KPIs).
- Visualize: Real-time performance metrics give you a concise and thorough overview of the production system and offer actionable data that helps lower equipment downtime.
- Improve: Continue working on your Overall Equipment Effectiveness solutions by improving equipment efficiency, increasing equipment uptime and producing capacity, lowering expenses, and enhancing product quality.
And through this process, many organizations enlist the help of proven product development consultancy.
In the competitive world of product development, OEE can be the key to building authority and maintaining efficient manufacturing processes that lead to business growth.
Start small, and in time, monitoring OEE will offer valuable data that can be used as building blocks for enhanced production processes.