Why is OEE such a popular manufacturing-operation metric? The reason is simple: OEE can deliver accurate and actionable information to manufacturers for significant productivity improvement.
First, a reminder of some OEE basics:
OEE (Overall Equipment Effectiveness) is a best-practice metric for measuring the effectiveness and efficiency of a manufacturing process.Calculated asthe product of three factors – Availability, Performance and Quality –it shows a percentage of the planned production time that is truly productive.An OEE score of 100% represents perfect production: manufacturing only good parts, as fast as possible, with no down time.
So, why should you care?
OEE is useful as both a benchmark and a baseline:
- Benchmark:Use OEE to compare the performance of one piece of equipment to similar equipment, industry standards, or even to results for different shifts working on the same equipment.
- Baseline: Use OEE to track progress in eliminating losses/waste from a piece of equipment.
We’re pretty excited about this technology partnership with OFS, which will see a new level of dashboard functionality on iDSnet, providing deeper OEE insights across the production line and enabling more efficient manufacturing.
Benefits of OEE
OEE shows you where to improve manufacturing process
One of the biggest myths surrounding OEE is that it simply provides a big-picture indication of how well your manufacturing processes are doing. While that’s correct, the true value of OEE utilisation is realised when you use those metrics to improve.
What gets measured gets done. You need to know whether a production process or asset is efficient or inefficient before you can take steps to improve it. The OEE metric quantifies efficiency into a simple number, while uncovering the actual effectiveness of the production process.
The performance limitations of machinery can often be the bottleneck on capacity. OEE helps you recognise bottlenecks in the process and instigate continuous improvement projects. By measuring OEE improvement, you can also track the impact of process changes, and other improvement initiatives.
OEE helps you manage the Six Major Losses
The goal of OEE is to identify and reduce (or even eliminate) the Six Big Losses of Total Production Management– the most common causes of equipment-based productivity loss in manufacturing:
- Availability: breakdowns and failures
- Availability: setup and adjustments
- Performance: small stops
- Performance: reduced speed
- Quality: start-up rejects
- Quality: production rejects
In simple terms, this means OEE can help you reduce the costs of downtime, rejects and defects. Using OEE, lean manufacturing is a realistic target. (Here’s how SMEs can benefit from lean manufacturing and while here’s a piece I wrote a while ago on think about “quality” if you’re thinking about lean manufacturing.)
OEE helps you achieve ROI on equipment
Every piece of equipment on your production line is an investment. To achieve the maximum return on investment in the shortest possible time, you need to ensure the equipment is being used to its optimum efficiency and effectiveness.
That’s precisely what OEE Utilisation sets out to do. OEE Utilisation (OEEu) measures OEE effectiveness against calendar hours (24 hours a day, 365 days a year) to report the bottom-line utilisation of assets. OEE yields insights into where and how manufacturers can make changes to get the best performance from new and existing machinery, and whether an investment in additional equipment is required.
OEE helps you visualise performance easily
OEE puts a huge emphasis on visibility. OEE lets you know the real factors behind production issues, rather than relying on gut feel – revealing the “Hidden Factory”. Importantly, OEE also helps you visualise these issues in simple terms, by filtering the most important sources of productivity losses into one single percentage. Everyone from the factory floor to top-level management can easily see what’s working and where OEE improvement is needed.
OEE provides a real-time target
OEE is also a management tool. It can provide operators with a real-time, achievable target. Armed with the metric, operators can tweak and fine-tune the process to hit their production targets. In other words, they can make proactive improvements.
OEE helps maximise workforce productivity
An OEE system identifies operator downtime reasons and highlights lengthy changeovers or set up times. It also reveals productivity data. Using this information, management can better allocate resources and identify where there may be extra capacity, or where new hires are needed.
OEE helps you remain competitive
By reducing production losses (and therefore costs), OEE is a tool to help manufacturers remain competitive. If you know your production line is capable of making 100 units per hour, but is only producing 70, the OEE score indicates why there are losses and you can make the required changes to increase production capacity.
Another way OEE helps competitiveness is by improving quality. Defective products can be one of the biggest causes of expense for a manufacturer. With OEE, quality is measured as a percentage of good parts produced versus total parts produced. The OEE quality metric can help identify root causes of issues, and eliminate costs associated with rework and scrap.
Remember, thequality metric is a pure measurement of process yield (an OEE quality score of 100% means there are no defects and only good parts are produced).
OEE is intended to help manufacturers drive improvement by providing a better understanding of the losses. It is a metric that reduces seemingly complex production problems into simple, accessible information that helps you to make the right decisions to improve efficiency and reduce operating expenses. And because OEE can be implemented on a single machine, there’s no limit to the size or type of manufacturers who can benefit.
Check out these blogs in “lean manufacturing & OEE” for more information.
Looking for highly informative case studies, whitepapers and infographics for manufacturing? Or videos showing solutions in action and lots of detailed brochures? Find all that and more in Matthews’large resource library. It also has presentations we’ve done to industry bodies and articles from our thought leaders. Plus, it’s all free to download!