OEE (Overall Equipment Effectiveness) is one of the best tools to optimize a production system. But it takes a little middle school math to get you there.
Don’t be afraid. We will walk you through the process of performing OEE calculations at your organization, and you will be well on your way to improving productivity. With simple formulas and examples to help, we’re sure you’ll get a passing grade.
OEE in manufacturing
Overall Equipment Effectiveness is a quantifiable (i.e., uses numbers) way to find out how well your equipment, people, and processes do their job by measuring:
- Available time/uptime (availability)
- Production speed and consistency (performance)
- The number of defects (quality)
Before calculating and using it at your organization, make sure you take the time to understand the OEE meaning, benefits, and best practices for implementation.
The data you need for an OEE calculation
Below is a list of performance and maintenance data needed for OEE measures. Whether it is in spreadsheets or a full functionality CMMS, ensuring you have consistent measurement of the following data is essential.
The numbers you need will fall into three main categories: parts, time, and ideals.
Measuring the number of parts you have produced
- Good count – the number of good parts (that meet quality standards the first time without rework) made during a set period.
- Total count – the number of all parts (including defects) made during a set period.
- Defective count – The number of defective products (rejected because they do not meet quality standards) made during a set period.
Measuring production time
- Planned production time – total time a piece of equipment is expected and scheduled to run.
- Run time – the amount of operating time a process is running. Run time does not include unplanned downtime but does include small stops, slowed production, or time spent addressing rejected parts.
- Stop time – the total time production was stopped due to both unplanned (equipment failures, material shortages) and planned stops (changeovers, make-ready events).
Measuring your ideal productivity
In addition to those real-life numbers, you will need to have an ideal for comparison. Consider what 100% productivity or a perfect manufacturing process would look like.
- How many parts would you produce in an hour?
- How long would it take you to make one good part?
Even though you will never achieve them, knowing what 100% productivity might look like is necessary if you want to know how close you are to it. Here are the ideal productivity measures you will need to set.
- Ideal cycle time – the ideal time it takes to produce one part.
- Ideal run rate – the maximum number of parts made in a minute under ideal conditions/at maximum productivity.
- Net runtime – the fastest/ideal amount of time it would take to produce a specific number of parts.
Ideals are hypothetical (i.e., they are made up). They must be high enough that you always have something to work toward. But not so high that it is not a relevant comparison.
So, the obvious question here is this: If all these ideal measurements are made up and impossible to achieve, how on earth do you know what they should be?
How do you set an ideal?
Base your ideals on the least amount of time it could take to make one part. To find that, you will have to work with your colleagues to consider the following:
- Machine capacity
- Production goals
- Machine operators’ skill level
- Scheduling issues or conflicts with other equipment
- Quality and availability of materials
Work with other leaders to develop the ideal metrics that are right for you, the process at hand, and your company.
How to calculate OEE
Let’s set one ground rule for the numbers you’re using: always use the smallest unit of measurement you can. Otherwise, you will not be able to get to the correct OEE score. That means time will appear as seconds rather than minutes or hours, for instance.
Let’s put that into practice and do a little math warm-up now to establish that there are 3,600 seconds in an hour. You’ll see that reflected in our examples below:
60 seconds in a minute x 60 minutes in an hour = 3600 seconds in an hour
Simple OEE formula
If you are new to OEE or have an atypical production model or process, you may want to start with this. It uses fewer calculations to get to a score but doesn’t provide as much depth or detail.
It goes like this:
Simply insert the numbers you collected for each item and plug them into this formula. You will then have a simple OEE score. Let’s walk through an example with real numbers.
- The fastest your production system can make one part is 3 seconds per part. So, your ideal cycle time is 3.
- Let’s also pretend that you need to make 4,000 of those parts. That makes your good count 4,000.
- If you multiply one by the other, you’ll find that ideally, it should take you about 12,000 seconds to make those 4,000 parts. If we do a little more math, 12,000 seconds comes to 3 hours and 20 minutes for those 4,000 parts, provided there are no interruptions, defects, etc.
- Your shift is 18,000 seconds long (or 5 hours). This is your planned production time.
- If you divide 12,000 by 18,000, you get .667.
- Convert that to a percentage (i.e., move the decimal two places to the left and add a %), and you find that you are running at about 66.7% OEE.
Let’s review in formula format:
(ideal cycle time x good count) / planned production time = simple OEE
( 3 seconds x 4,000 goods) / 18,000 seconds = 66.7%
Now, let’s say that 500 of the 4,000 products we made were defective. That brings our good count to 3,500. How does that impact our OEE score with this calculation?
(3 seconds x 3,500 goods) / 18,000 seconds = 58.3%
That’s quite a difference!
Although this is an acceptable calculation of OEE, it doesn’t give us enough insight to know what we need to change if we want to improve it. For that, we need to use the advanced version of this calculation.
Advanced OEE formula
The full-on OEE score involves three numbers, and each one takes a little math to get to on their own. It is not hard, but there are a few steps involved, so if you are reading this on a Monday morning, let’s grab one more cup of coffee and get to it.
Availability is the amount of time that your equipment or process is running as it should. It is the percentage of your planned production time that was spent producing (run time). Here is the formula for that:
Using our example from above, even though our planned production time was a 5-hour shift (18,000 seconds), production stopped for 45 minutes (2,700 seconds) due to a breakdown. That gives us a run time of 15,300 seconds.
15,300 Run time / 18,000 Planned production time = .85
Divide 15,300 by 18,000 and do our decimal place magic, and we get an availability score of 85%. This is the first number in our advanced OEE score.
This is the speed of your production process and your ability to stay at that pace over time. It is the percentage of how close your run time was to the ideal.
In our example above, we know that it would take 3 seconds to make one part under perfect conditions. Making 4,000 parts should take 12,000 seconds. Given that our actual run time to make that amount was 17,100 seconds, our math will look like this:
(3 seconds Ideal cycle time x 4,000 Total Count) / 15,300 Run Time = .784
That is a performance score of 78.4%. Not bad!
Quality refers to, well, the quality of parts and how often you make defects. And this one is pretty easy. It is the percentage of all parts you made that met your quality standards (good).
Using our example here, we know that of the total parts we made (4,000), 3,500 met our standards. So…
3,500 Good parts / 4,000 Total parts = .875
That’s a quality score of 87.5%.
Your final OEE
We are entering the home stretch now! We have our availability, performance, and quality scores. Let’s combine them to get our final OEE.
Availability x Performance x Quality = OEE
.85 x .784 x .875 = .583
Congratulations. You made it! You have an OEE score of 58.3%.
Tools and software that enable OEE tracking
Just because you know how to calculate OEE on your own now, that doesn’t mean you want to walk through that process manually every time. Nor does it make sense to do so – the goal here is efficiency, after all.
There are a lot of software solutions, tools, and calculators out there that can do this work for you. Not only that, they can easily track OEE and other metrics over time and pull trends into helpful dashboard-style visuals.
Software ratings agencies such as Capterra or Software Advice are good places to start if this is the type of solution you are looking for. In addition, many OEE software systems can integrate and work well with other tools used to collect and monitor relevant data and activities such as a CMMS software.
Your OEE is now an essential part of your continuous improvement process. It is an instrument that helps you identify which of the common six big losses in manufacturing may be impacting your business the most.
Once you have a method to regularly measure and track your OEE, you have the information you need to minimize the losses that may have been causing inefficiencies and holding you back from world-class performance.
Limble is your partner in OEE and many other efficiency strategies. We offer an easy-to-use CMMS platform that enables each step in the OEE process. You can start a free trial here, request a demo, or even try out our online self-demo.