Managing a strategic and proactive maintenance department requires systematic tracking and meaningful quantitative measurement of both performance and outcomes. Maintenance technicians, quality control experts and reliability engineers use a variety of informative metrics, or Key Performance Indicators (KPIs) to track the condition of equipment, evaluate the effectiveness of maintenance processes, and monitor the overall performance of maintenance programs.
Tracking these metrics can provide maintenance teams with quantitative benchmarks as they pursue continuous improvement. Maintenance metrics like Mean Time Between Failures (MTBF), Mean Time to Repair (MTTR), and overall equipment effectiveness (OEE) can also help your organization approach maintenance tasks more strategically and proactively.
Why is Overall Equipment Effectiveness (OEE) important?
Overall Equipment Effectiveness (OEE) is a particularly useful metric for organizations in the manufacturing sector. OEE offers a holistic quantitative measurement for overall performance of the manufacturing process by combining measurements of equipment availability, performance, and quality.
Overall Equipment Effectiveness (OEE) is an important metric for organizations seeking to:
Assess the manufacturing process
Identify areas where the operation may be underperforming
Yield data-driven solutions to the root causes of this underperformance
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Overall Equipment Effectiveness (OEE) is a comprehensive metric that combines several important dimensions of the manufacturing process into a single quantifiable performance indicator. OEE offers a clear picture of your production operation. It answers questions related to how well the process is performing, how effective your maintenance program is at minimizing downtime, how successful your organization is at meeting its broader manufacturing goals, and how well your quality control procedures are working.
Overall Equipment Effectiveness (OEE) is expressed as a percentage, with 100% representing the best possible OEE score. This score is devised using the following three factors:
Availability, which measures the proportion of scheduled time that the equipment is available for production.
Calculation: Availability = (Operating Time / Planned Production Time) x 100
Performance, which measures whether the equipment is running at its maximum possible speed during the time it is available.
Calculation: Performance = (Ideal Cycle Time × Total Count) / Operating Time x 100
Quality, which measures the proportion of good units produced out of the total number of units produced.
Calculation: Quality = (Good Count / Total Count) x 100
Calculating OEE first requires the calculation of the above factors. In a later section, we’ll detail the steps used to calculate OEE more fully.
Availability, performance, and quality
As noted above, calculating OEE first requires the calculation of three manufacturing variables–availability, performance, and quality. Each of these variables is based on a combination of factors. Improving OEE first requires a fuller understanding of the underlying factors contributing to your organization’s performance in each of these three areas.
Below, we take a closer look at these areas and offer a detailed breakdown of the factors contributing to each.
Availability factors include planned downtime for regular, preventive maintenance activities; unplanned downtime for unexpected equipment failures or operator errors; and downtime for operational adjustments including shift changes and non-production activities.
Performance factors include “Ideal Cycle Time” for the production of single units, operating speed relative to optimal performance; and consideration of external factors such as variations in the quality of raw materials or environmental conditions.
Qualityfactors include the “good count” of units produced, the total count of both “good” and defective units; and the number of units that must be reworked or scrapped.
How is OEE used?
OEE is a powerful metric for maintenance teams. Because OEE incorporates a full spectrum of factors into its calculation, the resulting OEE score can provide a great deal of insight into the performance of both your manufacturing process and the maintenance program responsible for its continuity, efficiency, and upkeep.
Indeed, OEE calculations can help maintenance teams identify the need for improvements, pinpoint the areas where these improvements are needed, and build preventive maintenance planning around these findings.
OEE calculations can help maintenance teams operate more effectively, and ultimately, achieve greater levels of excellence. Calculating OEE can help your maintenance team:
Identify bottlenecks by calculating individual OEE for each component, piece of equipment, and system involved in the manufacturing process
Reduce unplanned downtime by revealing patterns of malfunction and failure in specific assets, types of equipment, or assets from specific providers
Improve production speed by pinpointing the machines or components that are running below their ideal cycle times
Enhance quality control by highlighting the statistically significant portion of products from a specific machine, process or operator that fall short of your company’s quality standards
Benchmark current performance outcomes and adapt areas of the process, maintenance strategy, training program, production environment, etc. to promote continuous improvement
OEE vs. OOE vs. TEEP
OEE is one of several metrics that organizations use to measure operational performance. Similar metrics include OOE (Overall Operations Effectiveness) and TEEP (Total Effective Equipment Performance). As their names suggest, all three metrics offer a holistic view of systemic efficiency in manufacturing.
However, there are important differences in the way these metrics are applied to measure equipment and production efficiency.
Overall Equipment Effectiveness (OEE) is used to measure the efficiency and effectiveness of a single piece of equipment or an entire production line during its scheduled runtime. This calculation is based on the combined calculation of availability, performance, and quality scores.
Overall Operations Effectiveness (OOE)is very similar to OEE in that it uses calculations of availability, performance, and quality to evaluate equipment efficiency over a duration of time. However, OOE expands on the duration of time used to make its measuring, calculating efficiency using all available time, which includes both runtime and downtime where machinery is not scheduled to run.
Total Effective Equipment Performance (TEEP)measures the total effective utilization of equipment across a theoretical duration of 24/7 availability. TEEP evaluates how well a piece of equipment is being utilized compared to its full potential, including all possible available time. Like OEE and OOE, TEEP incorporates measures of availability, performance, and quality. TEEP differs from OEE and OOE by including a fourth component called loading, which refers to the percentage of total time the equipment is scheduled to run. TEEP also differs from OEE by basing its calculations on “total calendar time” rather than total equipment runtime.
Calculating OEE
As noted in the sections above, OEE is calculated using three key components: availability, performance, and quality. Calculating OEE first requires the calculation of these factors. The section below provides the formula for calculating OEE as well as a step-by-step example for completing this calculation.
The formula for calculating OEE
OEE is calculated by multiplying the three key components (availability, performance, and quality) by one another. This produces the following formula:
OEE = Availability × Performance × Quality
For example:
Assume a machine has:
Availability of 91%, where equipment is available 91% of scheduled production time
Performance of 89%, where equipment runs at 89% of maximum speed during the available time
Quality of 96%, where 96% of the produced items meet quality control standards
In this example:
The OEE would be calculated using the following formula:
OEE = .91 x.89 x .96
OEE = 77.7 or roughly 78%
OEE formula in action
Understanding OEE and what it says about your operation can provide an important baseline for pursuing maintenance performance improvements, regardless of your industry. Quality control teams, reliability engineers, physical asset managers, and maintenance technicians alike rely on metrics like OEE to make data-driven decisions in a wide variety of production settings.
Below, we offer a few examples of industries in which the OEE formula is commonly used to inform and support performance improvements.
An automotive manufacturing plant that struggles with frequent unplanned downtime may leverage OEE calculations to implement predictive maintenance planning, optimize machine settings, and introduce stricter quality control measures.
A food processing plant experiencing slower-than-expected production speed may use OEE calculations to identify root causes in processes, calibrate equipment to ensure it operates at the ideal cycle time, and schedule regular maintenance to minimize disruptions due to planned and unplanned downtime.
A pharmaceutical manufacturing company that struggles with delays due to changeover, machine setup, and prolonged downtime may use OEE calculations to optimize setup procedures, introduce quick changeover techniques, and incorporate more flexible scheduling.
How to improve OEE
OEE calculations offer a clear and comprehensive picture of just how effectively your manufacturing process is operating based on the availability of your equipment, the performance of these assets, and the quality of the units they produce. This picture is an important reference point for pursuing continuous improvement.
Calculations like OEE combine with other indicators in order to provide deeper performance insights and, ultimately, ongoing enhancements to the equipment you use, the processes you deploy, and the maintenance strategies used to support these processes.
Below, we take a closer look at some common methods for using OEE calculations to drive continuous improvement:
Improving performance by optimizing machine settings to ensure ideal speed, automating certain processes to reduce the frequency and duration of minor stoppages, and maintaining optimal environmental conditions such as temperature, humidity, pressure, etc.
Improving quality by implementing automated inspection systems to detect defects in the production process, using statistical process control (SPC) to maintain consistent product quality, and conducting Root Cause Analysis (RCA) to trace the origin of, and correct, product defects.
Utilizing a CMMS platform to improve OEE
The right Computerized Maintenance Management System (CMMS) can help your organization integrate these features along with tools like maintenance activity tracking, work order management, preventive maintenance scheduling, inventory optimization, and data collection. A leading-edge CMMS can also provide real-time insights and advanced reporting to support OEE improvement efforts.
Find out what else the right CMMS can do to help your organization improve OEE, refine your production processes, enhance your maintenance program, and allow your manufacturing operation to reach new heights of productivity.
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