What is Overall Equipment Effectiveness (OEE) calculation in manufacturing?

Overall Equipment Effectiveness (OEE) shows how effectively plant and production equipment are being utilised. OEE assigns a numerical value to the improvement opportunity, indicating how efficient a manufacturing process currently is and creating a benchmark for measuring future improvement.

OEE is a total measure of performance that helps focus improvement to the most critical (and common) areas of productivity loss. These fall into three primary categories:

1. Availability
2. Performance
3. Quality

Availability is the proportion of planned running time that is available for production. The losses in this category include unplanned and planned stops.

Unplanned stops are when equipment is scheduled for production but is not running due to unplanned events. Examples include equipment breakdowns, unplanned maintenance, lack of operators or materials.

Planned stops are when equipment is scheduled for production but is not running due to planned events. Examples include changeover, tooling adjustment, cleaning, planned maintenance and quality inspection.

Performance compares the actual running speed of the plant or equipment against its specified operating speed – often referred to as ‘ideal or best cycle time’. Performance is the throughput of the plant during the time it ran, compared to the maximum throughput that it could have achieved running at the ideal cycle time. Performance losses include micro stops and slow speed.

Micro stops are when machines or production lines stop briefly and frequently. Examples include miss-feeds, material jams, incorrect settings, misaligned or blocked sensors.

Slow speed is when machines or production lines run slower than the ideal cycle time. It may be a consequence of dirty or worn-out equipment, poor lubrication, substandard materials, poor environmental conditions or operator efficiency.

Quality is the actual production throughput which meets the product specification exactly and is right, first time. Quality losses include production rejects and start-up rejects.

Production rejects are defects that are produced during everyday production. Production rejects often occur because of label problems, chemical or physical conformity issues or broken packaging.

Start-up rejects are defects that can occur after any equipment start-up – like after changeovers. Examples include equipment that needs warm-up cycles, or equipment that creates waste after start-up.

OEE is a calculation of all three components – availability, performance and quality.

85% OEE is considered world class for discrete manufacturers and an appropriate long-term goal for most companies.

60% OEE is a typical score for discrete manufacturers and indicates there is considerable scope for productivity improvement.

40% OEE is common for manufacturing companies that want to improve manufacturing performance but are just starting to measure OEE.

OEE helps manufacturers to understand and measure production processes by quantifying and visualizing all losses from production lines and machines. It not only shows what was produced with existing resources, but also what could have been produced – revealing a plant’s true potential.

Read more – Why use an OEE calculation?