OEE – Overall Equipment Effectiveness

• What is OEE
• OEE terminology and calculation
• Why is OEE a better KPI
 OEE – Overall Equipment Effectiveness

What Is OEE?
 OEE is an international standard for measuring manufacturing productivity
 it identifies the percentage of manufacturing time that is truly productive

OEE = Availability x Performance X Quality

OEE is a metric for identifying losses, benchmarking progress, and improving the
productivity of manufacturing equipment

An OEE score of 100% means : manufacturing only Good Parts (100% Quality), as
fast as possible(100% Performance), with no Stop Time(100% Availability- machine
do not stop at all).
Availability – Theory Definition

Availability refers to the machine or cell being

available for production when scheduled. At the
most basic level, when a process is running it is
creating value for the end user. When a process
is stopped, it's creating a cost with no
associated value. Whether it's due to
mechanical failure, raw materials or
operator issues, the cell or machine is either
producing or not producing. By comparing
scheduled run time to actual run time, the
availability component of OEE allows for a
determination of lost production due to down
https://www.vorne.com/learning-center/oee.htm
time.
 OEE – Calculations

OEE = Availability x Performance X Quality

Availability

It is the ratio of Run time to available time (Excl Dept closure)

Availability = Run Time / Total available time

Run Time = Total planned prod time – stoppage

Stoppage:

 Planned – Change overs, Cleaning, Maintenance, …..

 Unplanned – Breakdown, Absenteeism, Quality issues, Operator issues, planning ,

no orders, all issues related to making the factors for production not available……
E.g: availability = 67 Hrs / 77 hrs = 85%
 Car –Not Running (Non availability)

 Engine/Machine:
Mechanical problem
Electrical problem
Tyre issues
……

 Material/ Resources:
Petrol

 Man:
Driver not available
Driver not having licence
 Performance – Theory Definition

Performance is determined by how

much waste is created through running
at less than optimal speed. By
comparing the actual cycle times
against ideal cycle times, OEE allows
for a determination of how much
production was lost by cycles that did
not meet the ideal cycle time.
Ratio of actual production speed/output to speed/output at
maximum speed

https://www.vorne.com/learning-center/oee.htm
 OEE – Calculations

OEE = Availability x Performance X Quality

Performance
It is the ratio of actual output to output at optimum performance (ideal cycle time)

Equipment Performance = Actual cycle time / ideal cycle time

Ideal Cycle Time is the fastest cycle time that your process can achieve in optimal
circumstances

Less than maximum speed:

 Machine issues – broken parts, worn out parts
 Product issues – Material stability, Quality checks, process
 Operator issues – Experience, multi task, Know-how
E.g: Performance = 7,500 kg / 10,000 kg = 75%
 E.G Car –Running less than maximum
speed (Performance)
 Machine:
Parts broken/malfunction
Road not ok

 Man:
Not experienced
Speed limitation
Quality – Theory Definition

Quality focuses on identifying time

that was wasted by producing a
product that does not meet quality
standards. By comparing the
quantity of good to reject parts
the percent of time actually adding
value by producing good product is
exposed.
https://www.vorne.com/learning-center/oee.htm
Ratio of good production to total
 OEE – Calculations

OEE = Availability x Performance X Quality

Quality

It is the ratio of RFT to total production

Quality = RFT / Total production

Non Quality:
 Rework
 Reject

E.g: Performance = 7,275 kg / 7,500 kg = 97%

 OEE – Calculations
OEE = Availability x Performance X Quality
Taking example from previous slides

Availability = 85%
Performance = 75%
Quality = 97%
OEE = 85% x 75% x 97%
= 61%

World class organisation

OEE = 85% x 100% x 100%

= 85%
 OEE – Why a better KPI
OEE compared to other KPI as Efficiency and quality, gives an overall view of
how a machine/ group of machine is used. (overall)
That is:
Availability –
 If planned to be run max no of Hr available? – (min planned downtime)

 If is run to max Hr in planned time? – (Min unplanned downtime)

Efficiency –
 if output matches optimum machine capacity (optimum speed, min change over)

Quality –
 If item produced is to quality conformance

Any of the three parameter would make the machine operation utilisation not to
maximum utilisation  this why OEE provides good insight
OEE – Why a better KPI
 OEE – Why a better KPI

OEE
 OEE – Why a better KPI

Non
Availability
(Run Time)

OEE
 OEE – Why a better KPI
No No Orders Marketing
material
Int Suppliers
Non Operation
Availability Planning
(Run Time)

OEE
 OEE – Why a better KPI

Non
Availability
(Run Time)

OEE
 OEE – Why a better KPI

Non
Availability
(Run Time)
Machine Breakdown
Down Maintenance
Maintenance
OEE
 OEE – Why a better KPI

Non
Availability
(Run Time)

OEE
 OEE – Why a better KPI

Non
Availability
(Run Time)

OEE
Operator Absent
On other task HR
Left job/not
recruited
 OEE – Why a better KPI

OEE

Performance
 OEE – Why a better KPI

Machine Worn-out/broken Maint

OEE

Performance
 OEE – Why a better KPI

OEE

Performance
 OEE – Why a better KPI

Know-how
Operator
OEE Operation
Multi-Task
Performance
 OEE – Why a better KPI

OEE

Performance
 OEE – Why a better KPI

OEE

Quality
 OEE – Why a better KPI

Material Procurement Purchasing

Internal Operation
process RND

OEE

Quality
 OEE – Why a better KPI

OEE

Quality
 OEE – Why a better KPI

OEE
Machine Malfunction Maintenance

Quality
 OEE – Why a better KPI

OEE

Quality
 OEE – Why a better KPI

OEE

Quality
Operator Know how
Supervision
Discipline
 OEE – Why a better KPI

Bottom line:
OEE identifies why machine is not used to
optimum best and who is accountable

Gives a complete picture at what is happening

and points out at the root cause