What is OEE?

OEE is an essential aspect to total productive maintenance (TPM), as well as Lean manufacturing. The acronym OEE stands for Overall Equipment Effectiveness, a best practice that evaluates how productive a facility is each day. It analyzes production rates and attempts to determine areas that can be improved; on large production lines, it can be difficult to see whether operators and equipment are performing efficiently. If production isn’t as efficient as possible, OEE considers every reason possible for this, including minor stoppages, breaks or lunches, shift changeovers, and machine breakdowns. No matter how insignificant these losses, they do add up over time.

Overall Equipment Effectiveness was developed in order to provide an accurate estimation of how much loss exists in the production process, to help ensure manufacturing is as efficient and as Lean as possible. There is a formula for calculating OEE so you can determine what maximum production would look like for your facility. Consider these factors:

• Availability: The amount of time a production line is scheduled to be in operation (also known as uptime). This is calculated by taking the actual run time and dividing it by the time that was originally planned.
• Performance: The actual speed a machine is able to operate by. This is calculated by multiplying ideal cycle time with the total number of produced parts, divided by run time.
• Quality: The number of units produced versus the number of units that were actually sellable. Some parts or products end up having defects, so this is calculated by dividing the number of defect-free products by the total produced.

Then you can use the equation of Availability (A) x Performance (P) x Quality (Q)=OEE. Understanding your results helps to visualize losses and take the next step towards planning an effective way to increase production. OEE can also be used to track improvements as time goes on; you can regularly complete the equation on a regular basis to see how production is going, and determine whether plans for improvement were indeed effective. Analyzing your rates of production and figuring out how you can improve is a key factor in establishing a Lean business.

How to improve OEE

Your Overall Equipment Effectiveness (OEE) is an important metric, so it's important to take every possible step to improve it. We've outlined some of the best actions you can take to make your production facility more efficient and productive overall.

1. Measure and Track OEE 

   To start improving your production efficiency, first measure and track Overall Equipment Effectiveness accurately. Set a baseline and aim for progress, using OEE as a measure to assess improvements and spot areas requiring attention.

2. Maximize Equipment Availability

   Focus on reducing downtime and making the most of its availability to keep your equipment running smoothly and efficiently. Regularly maintain it to prevent breakdowns and schedule maintenance activities during planned breaks in production; also optimize the process of switching between different production tasks to minimize setup time and maximize the use of your equipment.

3. Utilize IIOT for Real-Time Data Collection 

   Instead of manually tracking data, the Industrial Internet of Things (IIoT) allows for automatic data collection directly from production equipment and machines when they are connected to a network. 

4. Automate Data Collection and Reporting 

   Automating production data collection and reporting can minimize human error and ensure data consistency. It saves time by avoiding tedious manual tasks for your employees. 

5. Real-Time Visual Production Monitoring

   Presenting data visually makes it much easier for us to understand complex information, and we can more easily identify the relationships between different elements, which results in higher levels of engagement and understanding. 

6. Use Root Cause Analysis 

   RCA is a method to find the main cause of any issue that comes up during production, and by focusing on solving the main cause instead of just the symptoms, you can prevent the problem from happening again and achieve long-term success for your organization.

7. Document All Production Stops 

   Documenting and analyzing every production stoppage is crucial for improving OEE, and you can identify trends and recurring breakdowns to correct them effectively. Involving operators in continuous improvement efforts by collecting their suggestions can give you valuable insights and ideas. 

8. Build a Continuous Improvement Culture 

   Continuous improvement is about constantly making things better. Using methods like Kaizen helps create a company culture where everyone is always looking for ways to improve and can share their ideas, which in turn makes the company perform better. 

9. Do Daily Huddle Meeting 

   Regular meetings or performance reviews keep the production team informed and allow them to quickly identify and address any issues. These discussions help maintain a real-time understanding of the production process so the team can spot problems early and develop action plans. 

Benefits of improving OEE

Improving Overall Equipment Effectiveness can have a positive impact on production quality and efficiency, potentially resulting in higher revenues and profits. Here are some benefits of improving OEE:

1. Scaling Up Production Efficiency

   After completing pilot tests with specific machines, you can consider scaling the use of OEE across your entire production line. Comparing the performance of different production lines can provide an accurate baseline of your machines and their potential for improvement.

2. Insights into Machine Performance

   Including OEE measurements for each machine will give you insights into how machine yields, scrap rates, and rejection rates are impacting your overall cost of quality and acceptance rates. 

3. Support Long-Term Organizational Goals

   Creating effective OEE strategies involves supporting long-term organizational goals and improving process quality and line performance. In the short term, OEE is a useful metric for maintaining stability but, to measure the overall reliability of the manufacturing process, long-term goals should be tied to business outcomes and OEE investment returns. 

4. Improving Quality with Scalable Processes 

   When you improve production-line performance by scaling up OEE, quality naturally gets better too. This happens because you gain a deeper understanding of how each machine on the production line can be optimized with simpler, more efficient processes.

5. Linking OEE Performance to Business Outcomes

   Improving OEE is accelerated when we connect improvements in line performance and process quality to business results. Understanding how these improvements can result in tangible gains and outcomes, such as reducing costs and increasing revenue makes it easier to achieve cost and revenue objectives quickly.

Challenges for Improving OEE

1. Unplanned Downtime

   Unexpected periods of inactivity can severely impact productivity in the manufacturing industry. When maintenance issues arise without prior notice, they can greatly disrupt operations and result in significant revenue loss.

2. Machinery and Equipment Breakdowns 

   When machinery and equipment experience malfunctions, it can lead to expensive repairs, delayed fulfillment of orders, and frustrated customers.

3. Streamlining Changeover Procedures

   The time it takes to switch between different production runs can be a lengthy process in manufacturing. This includes the period between the completion of one batch of products and the start of the next batch, where the required quality standards need to be met for the customer.

4. Slower Production Speed 

   Slow manufacturing speed has a direct impact on the quantity of products produced and the revenue generated. Analyzing data in real-time can help you make well-informed decisions for continuous improvement.

5. Quality Defects 

   Quality issues during manufacturing can result in product recalls, unhappy customers, and increased costs. 

6. Lack of data and visibility 

   When there is a lack of relevant data available, it becomes difficult to make well-informed decisions.

7. Operator Errors 

   Operator errors can result in damaged or defective equipment and problems with product quality. 

8. Lack of Traning 

   Proper training is very important for machine operators and maintenance teams. 

9. Outdated Equipment

   Older equipment frequently demands more maintenance and is prone to experiencing breakdowns.

10. Supply Chain Disruptions 

    Disruptions in the supply chain can result in material shortages and delays in production.