OEE - Overall Equipment Effectiveness

Effectiveness is a measure of how well you do what you plan to.  OEE provides a robust measure of improvement potenitial and helps to target the causes of equipment downtime, under performance and quality defects.  Combined with our Lean Action toolbox, OEE is an essential driver of the pace of improvement.  

In order to calculate OEE the result is dependent on 3 factors:

Machine Availability (A)
Performance level (P)
Quality (Q).

The relationship between these values is:

OEE = A * P * Q

Factor 1

Determine machine availability (A)

This parameter is based on the planned production time. In a 3-shift operation, this value can therefore be up to 24 hours per day. In a company with shift working, the reference size is usually 8 hours. If the machine runs continuously during those eight hours the plant availability is 100%.

Reduced availability can be divided into two categories:

Planned stoppages such as breaks, maintenance, set-up times, etc.
Unplanned Stoppages, such as repairs, power outages, lack of materials etc

Factor 2

Reaching the machines full performance (P)?

This parameter is based on the manufacturer's specified values. A value of 100% means that the machine provides the maximum output, when run at full load.

For example, a stamping machine has a manufacturer specified production rate of 100 stamping operations per hour. When used in your business, you produce 80 parts per hour. The machine thus has a performance level of 80%.

Factor 3

Quality - how much scrap is produced (Q)?

The final factor - Quality - determines the relationship between the quantity produced and the amount actually recoverable as a fraction.

Now multiply the three factors to determine productivity.

For example, a CNC lathe operates in two shifts of eight hours. Your company works 5 days per week. The planned production time would be 256 hours per week. 10 hours a week you do planned maintenance and upgrades. After the final measurements you need to allow an average 2 hours per week for unplanned stoppages due to disturbances. This results in 244 operational hours per week, the plant availability would be approximately 95%.

According to the manufacturer of the machine it should produce 5 parts per hour. In 244 hours actually running time the machine should produce 1220 units, but only reached 1,080. The performance level is 90%. From those 1080 units, only 1048 are of good quality, which gives a quality factor of 97%.

These numbers give you an OEE of:

OEE = 0.95 * 0.9 * 0.97 = 0.83

The OEE is therefore 83%

In this example, 5% of available time is lost.

The reasons for this loss can be categorised either as 1. Breakdowns or 2. Set up and adjustment

In the above example 10% of output is lost when running. 

The reasons for this loss can be categorised as either 3. Idling and Minor Stops or 4. Running at reduced speed

In the above example Quality loss is 3%

The reasons for this can be categorised as either 5. Start up losses or 6. Rework or Yield losses

Each of these 6 losses is a different type of problem.  Our Lean Action toolbox provides the countermeasures to systematically reduce these hidden losses and increasing capacity, flexibility and reliability of supply, reducing costs, defects and customer service failures.

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