Overall Equipment Effectiveness (OEE) explained

Overall Equipment Effectiveness (OEE) is a valuable metric that measures the efficiency of a machine.

OEE takes into consideration the Availability, Performance, and Quality of a machine. OOE (Overall Operational Effectivness) and TEEP (Total Effective Equipment Performance) are identical to OEE except in how they define Availability

In mathematical terms, OEE = Availability * Performance * Quality

For the purposes of calculating OEE, these underlying metrics are defined as follows.

Availability

Availability is calculated differently for each of the OEE metrics.

OEE - The amount of time the machine is in-cycle is compared to the amount of time a job has been scheduled on the machine.

OOE - The amount of time the machine is in-cycle compared to all-time during scheduled shifts.

TEEP - The amount of time the machine is in-cycle compared to all time.

Performance

Performance refers to the speed that parts are produced while the machine is in cycle. It is calculated as the average in-cycle time to produce a part divided by the ideal in-cycle time to produce a part. The more parts produced within a period of time, the higher a machine's performance percentage.

Quality

The quality metric is the percentage of parts that are good. Any rejected parts from a cycle will lower the quality percentage.

Example Calculations for OEE

As an example, say a machine produces 1 part per cycle and a cycle takes 10 minutes to complete including setup.

Theoretically, the machine should produce 48 parts over the course of an eight hour shift.

8 hours * 60 minutes per hour = 480 minutes / 10 minutes per cycle = 48 cycles * 1 part per cycle = 48 parts

If a machine actually produces 48 good parts with no downtime over the course of a shift it's OEE will be 100%

Availability = 8 Hours / 8 Hours = 100%

Performance = 10 minutes per part / 10 minutes per part = 100%

Quality = 48 good parts / 48 good parts = 100%

OEE = 100% * 100% * 100% = 100%

In the real world, this machine may be more likely to be up for 6 hours of its scheduled 8 hours uptime. It may still produce the required 48 parts but 6 of these parts are rejected and not considered good.

In this case:

Availability = 6 Hours / 8 Hours = 75%

Performance = 10 minutes per part / 10 minutes per part = 100%

Quality = 42 good parts / 48 good parts = 87.5%

OEE = 75% * 100% * 87.5% = 65.6%

Note that in this case the performance metric was still considered to be 100% since the machine reached its part production goal. OEE is such a valuable measure because it takes these underlying metrics into consideration. By using OEE to measure your machine's efficiency, you are taking a much more comprehensive approach to identifying weak links on your shop floor. Not only does OEE allow you to identify these weak links, it also provides you with a value to determine which links are the weakest. 

In the case above, Availability dropped to 75% because of 2 hours of unscheduled downtime and Quality dropped to 87.5% because of 6 rejected parts. In order to best improve our OEE in this scenario, we should work on raising our Availability since it has a lower value and brings down OEE the most. If it was possible and cost effective to upgrade equipment in a way that increases the machine's in-cycle time to 7.5 hours of each 8 hour shift, the availability would increase to 93.75%. In this case the overall OEE in the above example would be 82%.

Now, OEE = 93.75% * 100% * 87.5% = 82%

Even if there is no improvement in the Quality of the parts produced by this machine, our OEE improves by nearly 17 points. 

An increase in Overall Equipment Effectiveness results in an increase in revenue as more good parts are being produced in a timely manner. This is why MachineMetrics provides you with this metric. We want to supply you with the information necessary to create a more efficient shop and OEE is an important piece of data that will help you to do so.