Several performance KPIs are used to help managers get realistic data about production line status and performance. The OEE metric’s ability to benchmark performance and track progress at various critical points throughout the process is very useful. Using this measure, it becomes easy to quickly identify unusual downtime penalties, below-standard processing efficiencies, and low quality standards. This, in turn, allows immediate action to be taken to mediate the condition and get production back on track.
What Is OEE?
OEE is a comprehensive calculation used to gauge the effectiveness of a machine, production line, or factory. The metric encompasses several important manufacturing activities. These activities include availability, performance, and quality, which are key elements of most manufacturing processes. All three activities are part of OEE, so managers can get a quick, numeric look at current process line productivity. Comparisons of line performance between time periods show productivity levels and trends. Comparisons of OEE scores between similar processing lines or machines across the factory can be used to evaluate relative performance. OEE can be calculated to cover any period and historically has been calculated manually at the end of the day or the week. Employees collect the required data for these variables on the line and then convert the data into the all-inclusive OEE.
More specifically, OEE is the overall equipment effectiveness of a defined production process during a specific operative period or mode and during which all activities related to production, personnel, and inputs are accounted for. The defined production process is the start and end boundary under review such as from depalletizing to palletizing or from receipt of materials into finished goods warehousing and out through shipping.
Availability is a number equal to the amount of time available to the production line to manufacture a product. Overall availability is the time the production line is running as a percentage of planned production time.
To calculate the availability value, use the following equation:
- Availability = runtime / planned production time, where
- Runtime = planned production time - stop time, where
- Planned production time is scheduled production time, and
- Stop time is any measurable stop or delay in production
The value for performance takes into account the speed at which the production line is running. This value is a comparison of the fastest cycle time the production line can achieve under ideal circumstances compared to the actual cycle time. The number is a percentage based on total production time and counts.
Performance can be calculated using the following equation:
- Performance = (ideal cycle time x total count) / run time, where
- Ideal cycle time is the fastest cycle time under optimum conditions, and
- Total count is the total quantity produced including reworked and scrapped, and
- Run time is the actual line run time
The quality figure used in the OEE calculation is similar to first-pass yield. This value is a percentage of “good” parts (parts that pass through production and do not require rework) as compared to total parts produced, including reworked and scrapped parts. Quality is the last of the three key indicators making up OEE and is calculated using the following equation:
- Quality = good count / total count, where
- Good count is the number of good parts that pass through the production cycle the first time (no rework), and
- Total count is the total number of parts produced including good parts, scrapped parts, and reworked parts.
The three values above are then multiplied together to develop a value for OEE:
OEE = availability x performance x quality and is expressed as a percentage of overall equipment effectiveness