A definition of Overall Equipment Effectiveness (OEE)

A vital component of the Lean Manufacturing philosophy, OEE provides a methodology for calculating the overall effectiveness of the production environment.

Overall Equipment Effectiveness, often shortened to just OEE, is an established method of measuring and then optimising the efficiency of a machine's performance or that of a whole manufacturing plant. OEE can have a significant impact on the productivity of a manufacturing unit. While implementing OEE software typically improves the OEE score by 10-20% in the first year, we can show that improving the Overall Equipment Effectiveness by just 1% can lead to a disproportionate change in throughput and consequent reduction in unit cost of the manufactured product.

The OEE score is made up of three components:

Availability (A) – percentage of uptime of each asset,
Performance (P) – percentage throughput against target, and
Quality (Q) – percentage of scrap, waste, or re-work.

When multiplied together A x P x Q = OEE and measures each different form of wastage in any manufacturing process.

It is important to understand the relationship between Overall Equipment Effectiveness (OEE) and Total Effective Equipment Performance (TEEP). TEEP = Loading x OEE (where loading is the total number of scheduled operating hours v calendar hours). In other words, TEEP gives bottom line utilisation of assets compared to effectiveness for scheduled hours of operation given by the OEE calculation.

Once the OEE calculation has been made, a gap analysis is undertaken between the current plant efficiency and the desired target or benchmark. The necessary investment and optimisations can be undertaken and progress monitored through the Overall Equipment Effectiveness calculation.

Idhammar's excellence in Overall Equipment Effectiveness

OEE is a critical key performance indicator (KPI) for all levels of operators and management involved in manufacturing operations. The complexity of these OEE calculations necessitates the use of a specialised and sophisticated OEE System that can capture and analyse the data before rendering it in a manner suitable for all levels of the manufacturing team to use and facilitate changes that will result in OEE improvement. Providing near-real time updates and the ability to drill down to see underlying issues makes it an essential tool in any lean manufacturing operation that needs to work as close to optimum as possible. Idhammar Systems is a world leader in the development, supply, and implementation of OEE expertise and software.

Real-life OEE improvements using Idhammar OEE Software

Idhammar’s OEE System has proven its worth with all its customers. The recommended solution can typically deliverROI in 6-12 months of being fully operational, and significant financial savings year on year:

• A leading food manufacturer calculated that a 1% improvement in OEE, was worth £800,000 per year, and improved OEE by 13% in 15 months.
• A pharmaceutical company reduced the six losses of OEE and produced the same product volumes in four and-a-half days, that had previously taken seven.
• A bottling plant increased line speed from 250 bottles per minute to 280bpm and now produces the same number of cases in 77 hours which previously required 113 hours.
• A food manufacturer using OEE measurement to improve energy consumption, reduced its annual gas spend by 7%, and achieved savings of £456,000 per year
• A pharmaceutical customer improved OEE by 36% for the night shift and 21% for the day shift, and within 6 months were producing the same output on a single shift.

There are a range of industry OEE Case Studies on this site that you can read to understand the typical financial and operational benefits your manufacturing environment could achieve if you implemented the Idhammar OEE System.