May 23, 2023

Making sense of maintenance metrics: Overall equipment effectiveness

Welcome to our series of blog posts about maintenance metrics. This post outlines everything you need to know about overall equipment effectiveness (OEE (opens in new tab)), the benefits of OEE, and how to improve OEE. Click here to see the rest of the series.

What is overall equipment effectiveness?

Overall equipment effectiveness (OEE) is a metric that measures the performance of your equipment and processes. The idea behind OEE is to understand how much time each component of your production system spends in a state where it is either producing at full capacity or not producing at all.

The OEE formula: How to calculate OEE

The most common way to calculate OEE is by multiplying three factors: asset availability (opens in new tab), asset performance, and production quality. Each one measures a different part of an asset’s job and how well it’s doing in that area.

Availability – How often does the asset function when needed?

Performance – How much does the asset produce?

Quality – How many high-quality items does the asset produce?

Let’s break down the formula for OEE by each factor:

Availability

=

Total run time of an asset  ÷

Total planned production time of an asset

Performance

=

Actual system throughput  ÷

Maximum possible throughput

Quality

=

Number of usable units produced  ÷

Number of total units started

We took a more in-depth look at each of these calculations here. When crunching the numbers, remember to exclude planned shutdowns, such as preventive maintenance, holiday shutdowns, and similar periods.

When you have these three numbers, you can use them to figure out OEE.

OEE = Availability × Performance × Quality

Making an effort to analyze and improve OEE can help you make a simple change in your maintenance practices… and lead to big improvements on the production floor.

Here’s one quick example. If availability is 92% (0.92), performance is 89% (0.89) and quality is 97% (0.97), your OEE calculation would look like this:

OEE = 0.92 × 0.89 × 0.97

OEE = 0.794 (79.4%)

In order to get 100% OEE, your facility would have to produce perfect products, as quickly as possible, with no unscheduled downtime. This is near-impossible to achieve. World-class OEE is considered to be 85% or better, and the average OEE score is around 60%.

World-class Average
Availability 90% 79%
Performance 95% 80%
Quality 99.9% 95%
OEE 85% 60%

What are the benefits of OEE?

Availability, performance, and quality are all tied to maintenance, which makes OEE an extremely useful tool for improving your operation. Conducting an OEE analysis and finding ways to improve OEE helps you uncover areas ripe with opportunity by connecting the dots between machine performance and maintenance performance. Below are a few of the benefits:

1. It gives your preventive maintenance program a boost

Tracking OEE allows you to see when and where poor maintenance practices are creating a disastrous domino effect. Relying too heavily on reactive maintenance leads to more equipment breakdowns (availability), which stops them from making goods (performance), and increases the chances of defects (quality). When you know where the weaknesses lie in your preventive maintenance program, it’s a lot easier to take action, improve OEE, and solve the problems.

In order to get 100% OEE, your facility would have to produce perfect products, as quickly as possible, with no unscheduled downtime… World-class OEE is 85% or better, and the average is around 60%.

2. Targets inefficiencies and eliminate them

Preventive maintenance alone doesn’t guarantee better asset performance. You can be doing all the PMs you want, but it won’t matter if they aren’t the right tasks, done by trained technicians, with the right tools and a proper timeline. Measuring OEE uncovers if any of these elements are out of whack so you can fix them. If availability, quality, or performance are suffering on an asset, it’s probably time to audit your PMs on that machine and make changes where necessary. This ensures work is done faster and done right.

3. Reduces common causes of equipment failure

OEE can help you eliminate issues that wreak havoc on your organization. These issues are generally grouped into what are called the big six losses:

1. Equipment failure
3. Idling or minor stoppages
4. Reduced speed
5. Production defects
6. Startup defects

You may know that you have production problems, but aren’t sure what they are, how bad they are, or how to fix them. Looking at the three elements of OEE allows you to identify which of the big six are affecting your operation the most, and the steps necessary to address them.

Should maintenance teams measure OEE?

Yes, maintenance teams should measure OEE, but unfortunately, not all do. Some maintenance teams may not fully understand OEE or how it can be measured and utilized to improve equipment effectiveness. Others may use different performance indicators to measure equipment effectiveness. For example, they may focus on mean time between failures (MTBF) or mean time to repair (MTTR) instead of OEE.

Here are a few reasons why your maintenance team should be measuring OEE:

• It ensures you’re optimizing every minute of your company’s downtime. You can think of downtime as being like a leaky pipe—if you don’t fix it right away, it’ll cost more and more money over time. But if you catch it early, you can fix it before any serious damage is done.
• You can use OEE as a metric for gauging your success in tackling downtime-related issues. If your company is experiencing an uptick in downtime and you’re not seeing any improvement from your efforts to fix it—that’s a sign that something needs to change. Maybe there’s a process problem or maybe there’s some part of the schedule that needs improvement. But whatever the case may be, by measuring OEE regularly, you can keep track of how well you’re doing at fixing those problems before they become too big to handle.

Challenges to improve OEE and how to overcome them

Analyzing and improving OEE can help you make a simple change in your maintenance practices, like the way you order inventory or complete work orders, and lead to big improvements on the production floor. Below are some challenges that maintenance teams may meet when it comes to improving their OEE:

1. Availability

What brings it down: Breakdowns, machine idle time, machine adjustment time, and machine stoppages.

How maintenance can improve it: Maintenance can target the causes of low availability with three main strategies—preventive maintenance, improved inventory management, and better access to information. A fine-tuned preventive maintenance schedule will lead to fewer failures and stoppages as problems can be spotted ahead of time. Tracking spare parts usage makes repairs quicker, cutting downtime, idle time and minor stoppages. Lastly, having manuals, work order histories, and other resources at your fingertips reduces repair time and gives technicians exact specs for adjustments, so they are quick and accurate.

2. Performance

What brings it down: Poorly operating equipment, inefficient work processes, material variations, lack of lubrication, and aging assets.

How maintenance can improve it: The key to boosting asset performance lies in optimizing planned maintenance and increasing standardization. Low performance usually points to an issue with a specific part or PM task, such as bearings that aren’t lubricated or a belt that isn’t serviced regularly. Refining your preventive maintenance triggers or adopting a condition-based maintenance approach catches these problems before they impact performance. Once PM tasks are scheduled, standardizing them is crucial. Take it one step at a time with little changes, like attaching task lists to work orders, to ensure things are done properly and efficiently.

3. Quality

What brings it down: Poorly maintained equipment, system misalignment, inconsistent raw materials, and haphazard troubleshooting.

How maintenance can improve it: Poor product quality can be addressed by improving maintenance processes and making consistency a top priority. Process failures are at the root cause of many defects. For example, if gauges are set differently between shifts or if every technician aligns a system differently, it could lead to a rise in subpar products. Building policies, workflows, knowledge hubs, and training programs improve processes, establish consistency, and create a culture of total productive maintenance. A better culture and superior processes lead to less chaos, standard results and higher-quality goods.

The bottom line: Build a foundation for success with OEE

Overall equipment effectiveness is one of the best tools for identifying production issues, solutions for those problems, and where maintenance fits into your strategy. OEE allows you to follow the trail of breadcrumbs from failure, inefficiency and lost production to the root cause of all these headaches, making long-term fixes possible and helping the entire organization succeed.

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