What is OEE? | Calculation | Definition | Example | Case Study

What is OEE (Overall Equipment Effectiveness)?

→ OEE (Overall Equipment Effectiveness) is an index to judge production run in terms of machine availability, production rate & quality rate of the product.
→ For TPM (Total Productive Maintenance) and Lean Manufacturing programs, OEE is a key metric.
→ 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.

What is mean by OEE? (Overall Equipment Effectiveness)

→ There are three parameters for Overall Equipment Effectiveness) monitoring

1. Availability
2. Performance
3. Quality

What is Availability?

→ Availability shows the machine available duration for manufacturing.
→ In other words, for how much time our machine is available for manufacturing.
→ Availability takes into account of Breakdown Losses.
→ Downtime losses include events or incidents that lead to a stoppage of planned production for a considerable duration.
→ After removing, downtime we can get the operating duration of the machine.
➨ Examples of Downtime:
     ⇢ Equipment failure,
     ⇢ Material shortage,
     ⇢ Excess change over timing, etc...

What is Performance?

→ Performance shows the excess time taken for manufacturing as compared to standard operating timing.
→ The performance takes into account of Speed Losses.
→ The Speed Losses includes any factor that leads to operating 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...

What is Quality Rate in OEE?

→ Quality shows the Good Quality of Product.
→ It takes into account the losses (loss due to the manufacturing of a bad part).
→ Quality loss can only be present due to the manufacturing of a defective part or non-conforming part.

How to calculate OEE?

➨ OEE_Calculation is mentioned in the below picture.

Times and Losses Calculation:

→ Planned Shutdown – Not part of Overall Equipment Effectiveness Calculation.
→ Break Down Loss - Operating timing to Planned Manufacturing timing ratio is called availability when a process runs without any stoppage there will be 100% availability.
→ Speed Loss – It is the ratio of net operating timing to total operating timing or it can be calculated by actual cycle time / ideal cycle time. When the process runs 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.

OEE Calculation Example:

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

➨ Planned Production duration = Total Available Time – Planned Breaks
                                                    = 480 Minutes – 55 Minutes
                                                    = 425 Minutes
➨ Actual Production duration = Planned Production duration – stops (breakdowns)
                                                  = 425 Minutes – 40 Minutes
                                                  = 385 Minutes
➨ Availability (A) = Actual Prod. Time/Planned Prod. Time
                               = 385/425 Minutes
                               = 0.905
➨ Actual Production Rate  = Total Count/Total Run Timing
                                             = 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 %

➨ Read this Article for Six Big Losses

OEE Benefits:

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

👉 Also Read:

      1. Various Problem Solving Methods | 8D Methodology, DMAIC, PDCA Cycle

      2. 7 QC Tools for Process Improvement

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👉 See Also:

➨ All Topics

➨ Lean Manufacturing

➨ ISO 9001:2015 & IATF 16949:2016

➨ 7 QC Tools

➨ Quality Core Tools like MSA, FMEA, APQP, SPC

➨ Six Sigma & Lean Six Sigma

➨ QA & QC Topics