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 equipment deployed.

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 or waste. 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 Efficiency (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.

Find out about Idhammar's excellence in Overall Equipment Effectiveness

OEE is a critical key performance indicator (KPI) for all levels of management involved in manufacturing operations. The complexity of these OEE calculations necessitates the use of specialised and sophisticated OEE software that can capture and analyse the data before rendering it in a manner suitable for all levels of the management chain. Providing near-real time updates and the ability to drill down to see underlying issues makes it is 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.

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