Maximising Manufacturing Efficiency and Performance with OEE

In the world of fast-paced manufacturing industry, efficiency is vital for competitiveness. One way to do that is by using Overall Equipment Effectiveness (OEE). In this blog post, we will explore what OEE is and how to calculate it. We’ll also discuss its crucial role in boosting productivity and driving continuous improvement.

So, you know how sometimes you want to know how well your manufacturing equipment or production processes are doing? That’s where Overall Equipment Effectiveness (OEE) comes in. It’s useful metric that gives you a complete picture on how well your factory is performing. Furthermore how efficiently you’re producing quality output.

The Three Musketeers of OEE

OEE consists of three fundamental components: availability, performance, and quality. Let’s delve into each of these components:

1. Availability. It measures the percentage of time that equipment is available and operational for production. It quantifies equipment uptime without unplanned or scheduled downtime. So, to figure out how often your equipment is available for production, you gotta keep these things in mind:

• Operating Time: This is the time when your equipment is actually available for production. It doesn’t include the times when you’ve planned for maintenance or changeovers. To calculate it, you just gotta subtract the planned downtime from the total planned production time.

• Planned Production Time: This is the total time that your equipment is scheduled to be in operation for production. It’s based on the shift duration or the planned work hours for a specific time period, like a day or a week.

To get the availability percentage, divide operating time by planned production time and multiply by 100%. That’ll give you the percentage.

Availability = (Operating Time / Planned Production Time) × 100%

A higher availability percentage indicates consistent equipment readiness for production. Conversely, a lower percentage implies more downtime, negatively impacting productivity and efficiency.

Monitoring availability identifies downtime causes, such as breakdowns or changeovers. Analysing availability data can help you find patterns, prevent issues from happening, optimise scheduling, and reduce unplanned downtime.

That’ll help improve your equipment’s overall effectiveness.

2. Performance. This measures how efficiently the equipment operates relative to its optimal speed or design capacity. It focuses on the actual production speed achieved compared to the maximum potential speed of the equipment. To figure out how well your equipment is doing, you need take a look at a couple things:

• Actual Output: This is the real number of units or products that your equipment made during a specific time period. Basically, it’s what you got done in practice.

• Maximum Possible Output: The highest potential production output if equipment operated at peak speed or capacity during that time.

To get the percentage on how well your equipment is doing, you divide the actual output by the maximum possible output and then multiply the result by 100%. That’s how you get the performance percentage.

Performance = (Actual Output / Maximum Possible Output) × 100%

If your performance percentage is higher, that means your equipment is working closer to its best possible speed. This leads to more productivity and efficiency, which is always a good thing. But if your performance percentage is lower, that means your equipment is not working up to its full potential. This could be because of minor stops, idling, reduced cycle times, or other performance-related issues. Monitoring machines performance reveals machine inefficiencies and productivity bottlenecks. This helps companies find ways to make things better, speed up production, reduce cycle times, and make things run smoothly overall. If you track and analyse performance data, you’ll be able to make smart decisions that’ll help you get the most out of your equipment. You can optimise your machines speeds, minimise slowdowns or performance issues. This on the whole increases overall productivity. That’s how you improve your equipment effectiveness and productivity.

3. Quality. This focuses on the percentage of products or output that meet the desired specifications without any defects or rework. It measures the ability of the equipment to consistently produce high-quality output. To understand quality in the context of OEE, consider the following factors:

• Good products: This means the number of units or products that meet the required quality standards and specifications. These are the units that are considered to be of acceptable quality without any defects or rework required.

• Total Units Made: Sum of all produced units, including both good and defective ones.

Quality percentage is calculated by dividing the number of good units by the total units produced, then multiplying by 100% to express as a percentage.

Quality = (Good products / Total Units Made) × 100%

A higher quality percentage indicates consistent, desirable output, reducing waste. Conversely, lower quality suggests many units don’t meet standards, requiring fixes and risking customer dissatisfaction.

Quality monitoring identifies defect areas, enabling corrective action. Analysing data helps understand issues, enhance control, and reduce defects.

Maintaining high quality is vital for customer satisfaction, brand reputation, and business success. Continuous quality improvement builds trust, reducing waste and rework costs, and boosts customer loyalty.

Maximise Manufacturing Efficiency Calculate OEE?

OEE is calculated by multiplying the availability, performance, and quality percentages together. The formula is as follows:

OEE = Availability × Performance × Quality

When we talk about OEE, we’re usually looking at a percentage that tells us how well our equipment is working. The percentage goes from 0% to 100%, with a higher number being better. It’s like getting a high score in a video game, but instead of saving the world from aliens, we’re making sure our equipment is effective and efficient.

Now let’s say we have a manufacturing company that has a production line running for eight hours a day. That’s 480 minutes of planned production time. During that time, they made 33,750 units, but 1,125 of them were scrap product. Bummer, but we can work on making that number smaller next time.

1. Availability: The line experienced 30 minutes of unplanned downtime due to a minor equipment malfunction
   Availability = (480 - 30) / 480 * 100% ≈ 93.75%

2. Performance: The line runs at a speed of 80 units per minute, but due to occasional minor stops and slowdowns, the actual average speed is 75 units per minute.
   Performance = (75 / 80) * 100% = 93.75%

3. Quality: Out of the 33,750 units produced, 1,125 were identified as defective.
   Quality = (33,750 - 1,125) / 33,750 * 100% ≈ 96.67%

Next, let’s calculate the OEE:

OEE = Availability × Performance × Quality = 93.75% × 93.75% × 96.67%≈ 85.89%

Therefore, the OEE for this production line, based on the provided data, is approximately 85.89%.

Keep it mind this example shows how each part of OEE (availability, performance, and quality) helps with the overall calculation. Even with a little bit of unexpected downtime and some small performance issues, the line still got a pretty high OEE percentage, which means that the equipment is doing a pretty good job overall. Be sure to check out our Ultimate Guide To What is Overall Equipment Effectiveness

Why You should know Your OEE?

Measuring and monitoring OEE has a bunch of cool benefits for companies:

1. Performance Evaluation. OEE gives a full evaluation of gear or process performance, so companies can spot ways to improve and see how efficient they are.

2. Production Optimisation. OEE data helps find bottlenecks, inefficiencies, and downtime. This lets companies make their production better, cut out disruptions, and boost overall productivity.

3. Continuous Improvement. OEE is a benchmark for continuous improvement initiatives. By keeping an eye on OEE over time, companies can see how their improvements are doing, make changes, and create a culture of constant betterment.

4. Equipment Maintenance. OEE tells companies how reliable their equipment is and when it needs maintenance. By looking at the availability and downtime data, factories can predict maintenance, get rid of unplanned downtime, and make the equipment last longer.

What availability is worth in money

Percentages are easier to act on once they are in euros. Take a line producing 50 units in an 8-hour shift at €30 per unit. The first measurement puts availability at 65%.

Looking at the downtime causes, the team found three:

• Working habits. Operators skipping machine checks at the start of the shift, ignoring minor error codes, reporting issues inconsistently. Each of those turns into longer unplanned stops and missed maintenance cues.

• Insufficient maintenance. Machines run to failure instead of being serviced, lubrication schedules missed, parts past their life, maintenance logs out of date.

• Missing logistics. Raw material not at the line on time, or production waiting for packaging because nobody could see the stock. No amount of machine efficiency fixes a bottleneck like that.

After three months of work on those three, availability reached 85%. What that is worth:

• Before: 8 hours × 65% = 5.2 productive hours, 50 units, €1,500 a day.

• After: 8 hours × 85% = 6.8 productive hours, about 65 units, €1,950 a day.

That is roughly €450 more per day from the same line, the same people and the same machines, or about €9,450 a month across 21 working days. Nothing was bought. The only thing that changed is that the downtime became visible enough to work on.

Overall Equipment Effectiveness (OEE) is a super powerful metric that lets manufacturers see how good their production equipment or processes are. By looking at availability, performance, and quality, factories can find ways to improve, make their production better, and keep getting better over time. Keeping tabs on OEE gives manufacturer valuable insights that help them get more efficient, work better, and stay ahead in today’s competitive business world.

Frequently asked questions