OEE, or Overall Equipment Effectiveness, is a key indicator used to measure the efficiency of equipment in production processes. It can be used to quantify and analyze machine performance, and to detect lost time due to stoppages, reductions in quality, or under-utilization. Measuring OEE is essential for any plant seeking to improve its overall efficiency and optimize its production system.
OEE definition
OEE measures machine efficiency by taking into account three factors: availability, performance and quality. It is used to determine the extent to which a plant is making optimum use of its resources. The aim is to minimize losses and achieve the highest possible OEE percentage, usually 85% or more, which is considered excellent performance.
Origin and importance of the OEE
The synthetic rate of return (SRR) or Overall Equipment Effectiveness (OEE) is a performance indicator developed by Seiichi Nakajima in the 1960s to measure the utilisation rate of an industrial installation. TRS is the most frequently used indicator today for measuring equipment performance, even though there is currently no international consensus on this indicator.
However, the measurement provided by such an indicator is relative and is, in practice, used to identify areas for improvement. The improvement in OEE is measured against a benchmark for a given piece of equipment; the value of this indicator is therefore specific to that piece of equipment and is not comparable with other types of equipment in other departments or plants. Maximising OEE or TEEP does not necessarily mean achieving the global optimum for the production entity.
TEEP (Total Effective Equipment Performance) evaluates the total potential utilization of a piece of equipment, including all downtime and unplanned periods, unlike OEE, which is limited to planned production hours. This gives a broader view of potential efficiency, but remains a relative indicator, specific to each machine and context.
OEE components
The OEE is based on three major components:
- Availability: Actual uptime compared with total planned production time, taking downtime into account.
- Performance: Actual production speed compared with theoretical maximum speed.
- Quality: The ratio between compliant products and those requiring correction or rejection. These three aspects are crucial for an overall view of a system’s efficiency.
How to calculate OEE?
The OEE calculation is based on a simple formula combining the three above-mentioned components, but several calculation methods exist, enabling companies to tailor the measure to their specific needs. This helps to assess machine efficiency and target areas for improvement.
OEE calculation formula
The OEE calculation formula is as follows:
OEE = Availability × Performance × Quality.
Each of these components is expressed as a percentage. For example, if a machine is available 90% of the time, operates at 95% of its capacity and produces 98% compliant products, the OEE would be :
OEE = 0.90 × 0.95 × 0.98 = 83.7% FOR THE YEAR
Practical example of OEE calculation
Let’s take another example: a factory schedules 8 hours of production. Out of these 8 hours, the machine has an unscheduled downtime of one hour. This gives an availability of 87.5%. If machine performance is 92% and 96% of products are of high quality, the OEE will be :
OEE = 87.5% × 92% × 96% = 77.4%. This result can be used to determine what improvements can be made to optimize machine utilization.
Why is OEE important?
OEE is crucial for understanding actual equipment performance, providing opportunities to optimize production processes. By improving availability, quality and performance, companies can increase their overall efficiency.
Impact on productivity
By measuring and improving OEE, companies can increase productivity without necessarily investing in new equipment. Better utilization of existing machines reduces waste and improves production flow, thus increasing the number of finished products per cycle.
Lower production costs
A well-monitored OEE reduces downtime, machine malfunctions and quality defects, which in turn reduces the costs associated with lost time and product non-conformity. Less unplanned maintenance and less waste mean significant savings for the company.
Improving product quality
OEE enables early detection of quality problems in the manufacturing process. By identifying the causes of defects, companies can take steps to improve product quality, reduce scrap and rework, and provide sustainable long-term solutions to ensure customer satisfaction.
How to improve OEE?
OEE improvement involves in-depth analysis of production data, identification of recurring problems, and adoption of effective strategies to maximize availability, performance and quality. This ensures optimum equipment utilization and better management of unplanned downtime.
Identifying major losses
TEEPTRAK lets you assign a set of fully configurable performance loss cause categories to each piece of equipment or zone monitored. With PerfTrak, QualTrak and PaceTrak solutions, these causes can be entered by the operator on his tablet when a production deviation (machine stoppage, under-performance, etc.) is reported to him by the TEEPTRAK module.
These causes of loss will be attached to groups of causes which will make up the performance indicators. When constructing an indicator, certain groups of causes may be included or excluded from the calculation of the indicator.
Strategies for optimizing equipment use
Key strategies include optimizing maintenance times, improving production cycles, and reducing downtime. Real-time monitoring tools and integrated OEE calculation systems help identify points of inefficiency and adjust production parameters to maximize machine efficiency.
Case studies and practical examples
Many companies have seen their OEE improve by adopting continuous measurement and monitoring systems. For example, an automotive manufacturing plant increased its OEE by 10 percent by identifying the causes of inefficiency linked to frequent interruptions and optimizing the availability of its equipment. This kind of optimization translates directly into productivity gains.
Benefits of OEE enhancement
Improving OEE has many advantages for companies seeking to maximize the performance of their equipment while reducing losses in the production process. This often translates into financial gains and improved competitiveness in the marketplace.
Return on investment
Improved OEE means less downtime and better resource utilization. This leads to a faster return on investment by reducing costs associated with maintenance and product non-conformity. Companies can then invest in other areas of improvement.
Performance visualization
The use of visual indicators enables better analysis of machine performance. Clear, real-time reports help identify problems before they affect production. This ensures greater reactivity in the management of manufacturing cycles.
Competitive advantage
By optimizing equipment efficiency, companies can produce higher-quality products faster. This improved performance gives them a competitive edge in the marketplace, offering more reliable and competitive solutions to their customers.
OEE improvement challenges
Despite its benefits, OEE enhancement can be difficult to implement. Common problems encountered include resistance to change and technical difficulties associated with data collection and analysis.
Common problems encountered
Challenges include misuse of monitoring systems, team training issues and frequent downtime due to machine failure. In addition, it can be difficult to keep accurate track of equipment availability and performance over the long term.
Solutions to overcome these challenges
To overcome these challenges, it is crucial to establish clear standards for OEE measurement and to integrate automated monitoring tools. Regular performance reporting helps to identify the causes of losses and to implement preventive maintenance programs. Ongoing team training also helps to maintain effective process management.
OEE trends and innovations
Technological innovations are transforming the way OEE is measured and monitored. Companies are adopting new interactive and automated solutions to continuously improve the efficiency of their equipment and the quality of their products.
Emerging technologies
The use of IoT and artificial intelligence in equipment monitoring enables even more accurate real-time data monitoring. These innovations help prevent unplanned downtime, optimizing machine availability and performance.
Interactive tools and software for calculating OEE
Specific software and interactive tools, such as those offered by TEEPTRAK, facilitate the calculation and visualization of OEE indicators. These tools provide greater process visibility, enabling companies to monitor performance in real time, identify losses, and make informed decisions to improve production.