There’s a reason why manufacturers call Overall Equipment Effectiveness (OEE) the productivity gold standard. To put it bluntly, the success of your business depends on the availability of your equipment to operate at peak efficiency and produce high-quality goods. The first step in making your equipment more efficient is to track its performance. The majority of manufacturers work at 60–65% OEE. OEE of the highest caliber is 85% or above. What exactly is OEE, then?
OEE: What is it?
OEE stands for Overall Equipment Effectiveness, as was previously explained. The creator of the Total Productive Maintenance method, Seiichi Nakajima, created this productivity score.
Trying to develop an almost ideal production technique was Nakajima’s lifelong ambition. He underlined that in order to optimize equipment lifetime and output, proactive and preventative maintenance is essential. Three factors—Availability, Performance, and Quality—are used to calculate the OEE score.
“To put it simply, OEE determines the proportion of production time that is actually productive. A 100% OEE score indicates that you are producing only high-quality parts as quickly as possible without any stop time. That translates to 100% Availability (no Stop Time), 100% Performance (as quick as feasible), and 100% Quality (only Good Parts) in OEE terminology. OEE.com
OEE assists businesses in determining losses, comparing performance, and locating and removing waste in their operations. In a highly competitive environment, this has become even more crucial. Businesses may gain a great deal from even a 1% increase in OEE.
Notably, the notion of Overall Equipment Effectiveness was developed in a distinct production age. Because machines were far more prone to malfunction or be unreliable in the 1980s, Nakajima’s worldview viewed defective machines as the main causes of failure on the line. Machines have gotten 20 times more dependable in the past several decades.
The systems that control the human component of the equation are increasingly more likely to be the cause of mistakes in manufacturing. It is hard to keep all the information you need in your brain or even in a three-ring binder when manufacturing lines produce more goods and operate increasingly sophisticated machinery.
According to Nakajima, people are the ideal cogs that keep the factory’s machinery turning. Because he developed his calculation before the development of digital Front Line Worker tools, he did not believe that the human element could be maximized.
OEE is determined by three factors: quality, performance, and availability.
1. Availability of OEE
The availability score accounts for both scheduled and unforeseen production halts. A 100% availability score indicates that all of the scheduled production time was spent with the equipment operating. The duration of scheduled stoppage and the frequency and duration of unscheduled downtime are what reduce availability score.
Your workforce’s work on related service activities and machine monitoring guards against these interruptions. Unfortunately, paper-based monitoring isolates important data and hinders management’s ability to see enough to perform preventative maintenance and minimize unscheduled downtime.
2. Performance of OEE
Slow cycles and minor production halts are taken into consideration by the performance score. When a process has a 100% performance score, it is operating at its maximum speed. Reduced production speed, wasteful idling, and small stops are what impair performance.
Machine idle time may reach 40% on typical industrial shop floors, which lowers ROI by 30%. Many of these losses go unrecorded because paper-based reporting for machine monitoring and associated servicing chores doesn’t capture the time between tasks. As a result, management is unable to see what is going on on the production floor in real time.
3. Quality of OEE
Defects and sections that require revision are factored into the quality score. A 100% quality score indicates that only high-quality parts were made. Since the majority of manufacturing businesses have unavoidably established production lines that produce little faulty components, this is typically the most difficult component of OEE to address. People will not purchase useless items, after all!
Why Is Improving OEE Important?
It’s possible that you believe OEE sounds cool and a bit geeky. But how does tracking it benefit my business?
Return on investment
Manufacturing businesses must optimize their return on investment after spending enormous sums of money on cutting-edge machinery. A business may boost production and extend the life of its equipment by increasing OEE.
Keeping one step ahead of the competition
Customers will turn to your rivals if your equipment malfunctions and you are unable to satisfy their demands. Making the most of what you currently have is more crucial than ever since supply networks are becoming more and more stressed.
Improve and iterate
You may start implementing process iterations and use data analysis to determine whether the new procedures are effective once you’ve started measuring your company’s OEE correctly. Companies may advance innovation initiatives by effectively monitoring OEE because they can demonstrate to senior management the financial benefits.
Find out how efficient your processes are.
Generally speaking, a company’s production efficiency is far lower than anticipated. Businesses can start to uncover significant benefits by identifying minor inefficiencies and getting rid of waste by accurately monitoring output.
Cut down on the expense of machinery repair
You can improve your preventative maintenance procedures by monitoring OEE. Proactive equipment maintenance is far less expensive than waiting for systems to malfunction.
Boost the quality of the procedure
Finding flaws in your production line is made simpler with increased process transparency.