# Overall equipment effectiveness (OEE)

How to master OEE and other maintenance metrics (opens in new tab)

## What is OEE?

Overall equipment effectiveness is a maintenance KPI (opens in new tab) that measures an asset’s level of productivity. OEE is a combination of three factors that tell you how efficient an asset is during the manufacturing process: asset availability (opens in new tab), asset performance, and production quality. Each one can tell you something different about how an asset operates.

1. Availability – How often does the asset function when needed?
2. Performance – How much does the asset produce?
3. Quality – How many high-quality items does the asset produce?

When an asset operates with an OEE of 100%, it means that every item it produces is without defect (quality), it is producing as fast as possible (performance), and it experiences no unplanned downtime (availability). Availability considers unplanned and planned stops. An availability score of 100% means the process is always running during the planned production time (which is the ideal scenario).

## What is the OEE formula?

The OEE formula is a straightforward calculation used to determine the overall efficiency of a piece of equipment. The formula is:

Each component of the formula plays a critical role in understanding and improving equipment performance.

### Example of using the OEE formula in manufacturing

Consider a manufacturing plant that produces glass bottles. Here are some hypothetical values:

• Good Count: 9,000 bottles
• Ideal Cycle Time: 0.5 minutes per bottle
• Planned Production Time: 5,000 minutes

Using the OEE formula:

OEE = (9,000 × 0.5) / 5,000 = 0.9 or 90%

This means that the equipment is operating at 90% efficiency.

## Components of the OEE framework

In our example above we walk through how to use the OEE formula, but it's important to understand the four main components of the OEE framework.

1. Good Count: The number of units produced that meet quality standards. This metric excludes defective or reworked units.
2. Ideal Cycle Time: The shortest possible time to produce one unit, assuming everything is running perfectly.
3. Planned Production Time: The total time scheduled for production, excluding planned downtime (i.e., maintenance).
4. Fully Productive Time: The actual time during which the equipment is producing good units at the ideal cycle time. This represents the theoretical maximum production capacity (i.e., no stop time).

## What does OEE mean for maintenance?

Conducting an OEE analysis can provide insight into the way you schedule, organize and conduct maintenance tasks. Ultimately, this information can help you avoid common and critical issues with assets costing your organization time and money.

Low asset availability can indicate that a machine is breaking down too often or for too long. This might mean the asset isn’t getting the proper amount of preventive maintenance, or critical spare parts aren’t available to quickly repair a problem.

Low performance could point toward issues with a specific part or preventive maintenance tasks, such as bearings that aren’t receiving enough lubrication or a belt that is too old and needs to be replaced.

A poor-quality score is often the result of process failures and a lack of standardization. For example, if gauges aren’t set properly from shift to shift, or the system isn’t aligned consistently between every use, it could lead to a higher number of defects.

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## The Six Big Losses in relation to OEE

In manufacturing and, consequently, in maintenance, there are six major categories of losses that impact OEE. Addressing these losses will improve OEE, they are:

1. Equipment failures: Breakdowns that lead to unplanned downtime.
2. Setup and adjustments: Time lost during equipment setup, changeovers, and adjustments.
3. Stops: Minor interruptions that cause brief idling and equipment stoppages.
4. Reduced speed: When equipment operates below its maximum speed.
5. Rejects: Defective units produced during equipment startup.
6. Rework: Units that require additional processing to meet quality standards.

## Benefits of conducting OEE

OEE provides several benefits, particularly in the contexts of Lean manufacturing and Total Productive Maintenance (TPM).

• Improved efficiency: By identifying and eliminating inefficiencies, manufacturers can enhance overall equipment performance.
• Enhanced productivity: Higher OEE scores translate to more output with the same resources, boosting productivity.
• Cost reduction: Reducing downtime and waste leads to significant cost savings.
• Continuous improvement: OEE serves as a foundation for ongoing process improvements and operational excellence.

### Benefits of OEE in Lean Manufacturing and TPM

• Lean manufacturing: OEE aligns with lean principles by identifying waste and promoting continuous improvement. It helps streamline operations and minimize non-value-added activities.
• Total Productive Maintenance (TPM): OEE is a key metric in TPM, providing insights into equipment performance and maintenance needs. It supports proactive maintenance strategies to prevent breakdowns and extend equipment lifespan.

## Availability score in relation to OEE

Availability is one of the three key factors in the OEE framework, alongside performance and quality. The availability score specifically measures the percentage of planned production time during which the equipment is available for production. It accounts for losses due to equipment failures and set-up/adjustments.

### Calculation of availability score

The availability score is calculated using the following formula:

Run Time is the actual time the equipment is running and producing products. While the Planned Production Time is the total time scheduled for production, excluding planned downtime.

### Example of calculating availability score

A machine is scheduled to run for 500 minutes (about 8 and a half hours) a day. During this time, it stops for 50 minutes unexpectedly, and 30 minutes for setup and adjustments.

• Planned Production Time: 500 minutes
• Run Time: 500 minutes - 50 minutes (breakdown) - 30 minutes (setup) = 420 minutes

Availability = 420 / 500 = 0.84 or 84%

This means that the equipment was available for production 84% of the scheduled time. High availability indicates that equipment is reliably available for production, minimizing downtime and maximizing potential output. Low availability, on the other hand, suggests frequent interruptions, which can significantly reduce production efficiency.

In this example, the availability score is at a good level but could use some improvements to increase to reach about 90% and above (which would be ideal). Some ways to improve availability include:

• Preventive maintenance: Regular maintenance to prevent unexpected breakdowns.
• Quick changeover techniques: Reducing setup and adjustment times through methodologies like SMED (Single-Minute Exchange of Die).
• Training and procedures: Ensuring operators are well-trained and have clear procedures to follow, reducing the likelihood of errors leading to downtime.

## Availability loss and changeover time in OEE

Availability loss refers to the time when equipment is not available for production due to unplanned downtime (i.e., breakdowns) or planned downtime (i.e., routine maintenance). Minimizing availability loss is crucial for maximizing and maintaining OEE.

Changeover time is the period required to switch from producing one product to another. Reducing changeover time is vital for improving equipment availability and overall efficiency. Techniques like SMED (Single-Minute Exchange of Die) can help streamline and reduce changeover times, enhancing OEE.

## OEE is a tool for evaluating the efficacy of assets

Overall equipment effectiveness can also be used to investigate the people, processes, and tools that impact how assets operate. When combined with the insight from other maintenance metrics, OEE provides a great foundation for identifying areas of an operation that can be improved and a quantifiable way to measure progress.

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