OEE (Overall Equipment Effectiveness)


Definition of overall equipment effectiveness ? Term initially used by Seiichi Nakajimn in the year 1960 to measures how efficiently we are utilizing our equipment’s. Seiichi Nakajimn was a Japanese citizen also the inventor of total productive maintenance (TPM).

OEE cannot the measurable number but it can widely use to find the scope of improvement in a manufacturing process and identifies the scope to increase the productivity with optimum resources.

Definition of overall equipment effectiveness

In several organizations, Definition of overall equipment effectiveness is using as a key performance indicator (KPI) and to identify the various scope of to success of lean manufacturing best practices.

Overall Equipment Efficiency (OEE) is the best practices which are assigned for best improvement opportunities in a manufacturing.
Definition of overall equipment effectiveness is a very simple metric to immediately indicate the status of a manufacturing process and providing a frame of improvement in process

OEE = Availability × Performance × Quality

Availability Rate: Availability rate is quantifying of how much the production equipment is available to run for a value-added production process.

Availability can be calculated as the percentage of time the production equipment is ready to produce, working without any unplanned stoppage.Definition of overall equipment effectivenes ! OEE Definition

There are two factors responsible for Availability loss, first is unplanned stops such as equipment break down, material Shortage and other one is planned stoppage like change over time etc.

Availability Rate is calculated as machines planned run time divided by planned Production Time.

Availability Rate = ((Total planned time – Total down times) / Total planned time) * 100

In the calculation of equipment scheduled run time usually excludes the set planned time slot for preventive maintenance or breaks but it includes other downtime’s like setup adjustments, machine break down or material shortage etc.

Performance Rate: Performance rate is the measure of the effectiveness of the process / Equipment to produce parts within defined cycle times. Performance loss considers all factors responsible for less run the equipment at its maximum possible standard running speeds. Normally these factors are slower cycle time, Small unplanned stoppage etc.

Performance rate = (Actual output product line / Ideal output to be delivered from the line based on cycle time in total available time) *100

Performance Rate = Actual Output/ Standard Output

The Standard output is the best fastest possible output rate produced on the equipment. The factors responsible for limiting the performance are the mainly small stoppage, idling the equipment or slow cycle time.

Quality Rate: Quality rate or First-time pass yield is the measure of Quality performance and it quantifies how robust the processes are to deliver consistent Quality Results.it is the ratio of good quality product compared to the total output rate.

Quality Rate (%) = (Units passed in first go/ Total units Produced) * 100

The factors responsible for quality loss are mainly the defective products that need to rework later not meeting the set quality standards.

OEE Benchmarking

Benchmark of OEE is very important as it can be compared the performance of used equipment’s from set standard industry parameters and applicable to similar assets using in-house operations.
So, considering standard parameters how to evaluate the good and bad OEE score is very important to understand.

  • 100% score of An OEE is an ideal production it means we are manufacturing defect-free products with full speed without any breakdown or stoppages.
  • 85% score of an OEE can be considered as excellent manufacturing and can be considered as a long-term target of any organization.
  • 60% score of An OEE can be considered as good but need to effort for improvements in the production system.
  • 40% An OEE score can be considered as bad operation and need to restructure to improve productivity, cycle time or defect rates.

Perfect Production

Perfect production is call when production is done at full capacity without any time loss without losing any quality of the product.

  • Production of all product with 100 % Quality score.
  • Producing as fastest as possible without any loss means 100% performance.
  • Zero stoppage means 100% availability of equipment.

Further reading