Overall Equipment Effectiveness

“We cannot control price, we can only control cost.”
-Andrew Carnegie

A core competency of any successful business must be to control and reduce costs. Measurement is the critical tool that allows this to be accomplished, but what to measure? Measuring the wrong thing is likely to produce wrong results. If throughput is the key metric, large quantities of defective product may be produced. If quality is the key metric, good product may be produced but at low throughput.

Overall Equipment Effectiveness (OEE) combines 3 key metrics of line performance (Availability, Performance and Quality) into a single value. This single value allows comparison of performance over time, between shifts, between products and between other lines and facilities. It boils performance down to a single easily understood number.

Availability
Availability is the ratio of available time, the time the line is actually running, to scheduled time, or the time the line is expected to be running. Availability does not consider speed, throughput or quality. It is any time the line is running regardless of how well or how poorly.
Example: A line normally runs 480 minutes/day (1 shift) with stops for two 15 minute and one 30 minute breaks. Scheduled time is 480 – (15 + 15 + 30) = 420 minutes.
During the course of the day the line runs out of materials and experiences 45 minutes of downtime. Available time = 420-45 = 375 minutes
Availability = 375/420 = 89%

Performance
Performance defined as the ratio of actual line speed to theoretical line speed. Generally theoretical line speed will be the nameplate speed of the slowest machine. In some cases it may be desirable to use a different value but once the value is determined it should be fixed and used in all OEE calculations.
Example: A line has a rated speed of 200PPM (Products Per Minute) and an availability of 375 minutes. Theoretical production is 200 X 375 = 75,000 products. Actual production is 67,500.
Performance is 67,500/75,000 = 90%

Quality
Quality is the ratio of good products produced to total products started. There are different definitions of quality but for the purpose of OEE, a good or quality product is any product that is not initially rejected. It does not count products that are initially rejected but reworked and ultimately accepted.
Example: The line begins 67,500 products during the shift. 67,000 good products are produced, 500 products are rejected
Quality = 67,000/67,500 = 99.2%
Overall Equipment Efficiency is the product of Availability, Performance & Quality
OEE = 89% X 90% X 99.2% = 79.5%

The factors affecting availability are generally long (>5-10 minutes) and recordable. They typically include: Lack of qualified personnel, lack of materials, components, product, machine breakdowns, plant breakdowns such as loss of power, meetings, cleanup and setup (Changeover less startup).

The factors affecting performance are short in duration (

Factors affecting quality can include improper machine design, defective materials, machine wear, imprecise adjustment, contamination and spills, operator error and inspection system errors (False rejects).

OEE is not the be all and end all but it is a good starting point. It gives a single number indicative of productivity. Using the individual factor values will help identify areas needing attention. There are various schools of thought on how to measure the different factors and I don’t think that the actual techniques are as important as that there be techniques which are uniformly applied over time and across lines. It is only by accumulating and tracking this data that one can tell whether performance is improving or deteriorating.