OEE | Overall Equipment Effectiveness

OEE Definition | Calculation | Formula | Examples | Lean Tool

What is OEE (Overall Equipment Effectiveness)?

→ OEE (Overall Equipment Effectiveness) is an index to judge production run in terms of machine (equipment) availability, Production rate & quality of the product.
→ For TPM (Total Productive Maintenance) and Lean Manufacturing programs, OEE is key matric.
→ It is an important characteristic of capacity planning, material planning, and other resource planning.
→ OEE is also known as TEEP (Total effective equipment performance).
→ Overall Equipment Effectiveness is a Lean Manufacturing Tool.

Basics of OEE (Overall Equipment Effectiveness)

→ There are three parameters for OEE (Overall Equipment Effectiveness) monitoring
  1. Availability
  2. Performance
  3. Quality


➤ [1] Availability:

→ Availability shows the available time of the machine.
→ In other words, for how much time our machine is available for production.
→ Availability takes into account of Down Time Losses.
→ Downtime losses include event or incidents that lead to stoppage of planned production for a considerable time.
→ After removing, downtime we can get operating time.

➥ Examples of Downtime:


➤ [2] Performance:

→ Performance shows the excess time taken for the production as compared to standard operating time.
→ The performance takes into account of Speed Losses.
→ The Speed Losses includes any factor that leads to operate production with more cycle time than maximum permissible.

➥ Examples of performance losses:

  • Low speed of job loading/unloading,
  • Fatigue of the operator,
  • Excess cycle time in manual work, etc...

➤ [3] Quality:

→ Quality shows the good quality of the produced parts.
→ It takes into account the quality losses (loss due to the production of a bad part).
→ Quality loss can only be present due to the production of a defective part or non-conforming part.

OEE Calculation:

OEE = Availability (A) x Performance (P) x Quality (Q)

OEE Calculation


→ Where,
→ Availability (A) = Actual Production Time/Planned Production Time
→ (Planned Production Time = Total Available Time – Planned Breaks)
→ (Actual Production Time = Planned Production Time – Stops)
→ Performance (P) = Actual Production Rate / Ideal Production Rate
→ (Actual Production Rate = Total Count / Total Run Time)
→ Quality (Q) = Good Parts / Total Parts Produced

➤ Times and Losses in OEE Calculation

→ Planned Shutdown – Not part of OEE (Overall Equipment Effectiveness) Calculation.
→ Down Time Loss - Operating Time to Planned Production Time ratio is called availability, when a process run without any stoppage there will be 100% availability.
→ Speed Loss – It is the ratio of net operating time to total operating time or it can be calculated by actual cycle time / ideal cycle time. When process run with maximum theoretical speed then performance will be 100%.
→ Quality Loss- it is the ratio of total good parts to a total part produced. When all produced parts are good then there will be 100% quality.

Times and Losses in OEE Calculation



Example of OEE Calculation:

→ Let’s assume below data to understand OEE calculation
→ Shift Duration = 8 Hours (480 Minutes)
→ Total Breaks = 55 Minutes
→ Down Time / Break Down = 40 Minutes
→ Ideal Production Rate = 1 Part per Minute
→ Total Part Produced = 350
→ Rejected Parts = 4

➨ Planned Production Time = Total Available Time – Planned Breaks
                                             = 480 Minutes – 55 Minutes
                                               = 425 Minutes

➨ Actual Production Time = Planned Production Time – stops (Downtimes)
                                        = 425 Minutes – 40 Minutes
                                        = 385 Minutes

➨ Availability (A) = Actual Production Time/Planned Production Time
                            = 385 / 425 Minutes
                           = 0.905

 ➨ Actual Production Rate  = Total Count / Total Run Time
                                           = 350 / 385
                                          = 0.909
 ➨ Performance (P) = Actual Production Rate / Ideal Production Rate
                               = 0.909 / 1.0
                               = 0.909

➨ Quality (Q) = Good Parts / Total Parts Produced
                      = (350-4) / 350
                       = 0.988

➨ OEE = Availability (A) x Performance (P) x Quality (Q)
            = 0.905 x 0.909 x 0.988
            = 0.812 ~ 81.2 %



Six Big Losses of OEE

  1. Breakdowns
  2. Setup and Adjustment
  3. Small Stops
  4. Reduced Speed
  5. Start-up Rejects
  6. Production Rejects
Six Big Losses of OEE

➤ [1] Breakdowns:

→ The breakdown comes under the Category - Downtime Loss.
→ Unplanned downtime elimination is critical.
→ Preventive maintenance is a key weapon to kill unplanned downtimes.
→ Root cause analysis can be done on severe downtimes.
→ Timely validation of tool is also important in order to prevent unplanned downtime.
→ Prediction of equipment failure is a key skill of engineering that helps a lot in the prevention of downtime.

➥ Examples of Breakdown Losses:

  • Tooling Failure,
  • Unplanned Maintenance,
  • Equipment Failure,
  • General Breakdowns, etc...

➤ [2] Setup and Adjustment:


→ Setup and Adjustment come under the Category - Downtime Loss.
→ It is generally called time between the last good part produced before setup change and first good part produced after the changeover.
→ Tracking of adjustment time is very important in reducing this loss.
→ We can use the concept of SMED (Single Minute Exchange of Dies) for reducing the Setup and Adjustment time.

➥ Examples of Setup and Adjustment:

  • Excess setup/change over time,
  • Material shortage,
  • Operator shortage,
  • warm-up times, etc...

➤ [3] Small Stops:


→ Small Stops comes under the Category - Speed Loss.
→ Recording of this type of loss is very difficult.
→ Cycle time analysis to be used to identify this type of loss.
→ Activity wise actual time monitoring and micro-mapping of this data help in the identification of small stops and speed reduction.

➥ Examples of Small Stops:

  • Component jam,
  • Sensor blocked,
  • Delivery blocked,
  • Cleaning and Checking, etc...



➤ [4] Reduced Speed:

→ Reduced Speed comes under the Category - Speed Loss
→ Recording of Reduced Speed losses is very difficult.
→ It can be recorded by Cycle time analysis.

➥ Examples of Reduced Speed:

  • Poor planning,
  • Machine wear and tear,
  • Operator inefficiency,
  • Under design capacity, etc...

➤ [5] Start-up Rejects:

→ Start-up Reject comes under the Category - Quality Loss.
→ “First Time Right” concept to be adopted during each startup of production.
→ Effective use of production start-up check sheet can eliminate start-up rejects.
→ Process parameter setting plays a vital role in the manufacturing of the good part at the first time.

➥ Examples of the Start-up Rejects:

  • Damage,
  • Scrap,
  • Rework,
  • Incorrect assembly, etc..

➤ [6] Production Rejects:


→ Production Reject comes under the Category - Quality Loss
→ It is related to the rejection during the production

➥ Examples of the Production Rejects

  • Damage,
  • Scrap,
  • Rework,
  • Incorrect assembly, etc...


Benefits of OEE:

→ It helps us to set goals for improvement, and track the progress.
→ OEE helps us to find inefficiencies in production.
→ It Provides us a benchmark data for the new process setup.
→ Overall Equipment Effectiveness helps to track progress in eliminating waste from a manufacturing process.




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