Overall Equipment Effectiveness – OEE as a performance KPI
Overall Equipment Effectiveness - OEE as a performance KPI
OEE – Overall Equipment Effectiveness
OEE is the gold standard for measuring manufacturing productivity. Simply put, it shows the percentage of manufacturing time that is actually productive. A 100% OEE value means producing only the best parts as quickly as possible without downtime. In the OEE language, this means 100% quality (good parts only), 100% performance (as fast as possible), and 100% availability (no downtime).
The OEE formula
The most common way to calculate OEE is to multiply three factors: asset availability, asset performance, and production quality. Each measures different parts of the asset’s work and its performance in that area.
How much time the asset is available to function?
– How much items does the asset manufacture?
– How many high-quality items does the asset produce?
Breaking down the formula:
= Total run time of an asset ÷ Total planned
production time of an asset
= Actual system output ÷ Maximum possible output
= Number of utilizable items produced ÷ Number of total
OEE takes into account all losses, resulting in a measure of truly productive manufacturing time. It is calculated as:
OEE = Availability × Performance × Quality
Cryotos can help drive OEE performance improvement by reducing downtime, shifting organizations to proactive maintenance models, improving preventive maintenance planning and scheduling, and optimizing labor resource efficiency.
Benefits of OEE in Manufacturing
There are three key advantages to analyzing production through overall equipment efficiency.
Return of Investment (ROI) for Equipment
Machinery and equipment represent a large investment made by a company to maximize the rate of return on investment. First of all, OEE helps manufacturers identify the best areas to invest their money. In addition, OEE calculations help the facility compare performance before and after adding new equipment, ensuring that new machines are being used to the fullest extent. Operators can use the measurable data provided by OEE to demonstrate the economic value of these investments.
Reduce Machinery Cost
Understanding how a machine actually works correlates directly with knowing if the machine is working efficiently. Also, identifying in advance if there are any issues that may lead to the need for future repairs, prevents the occurrence of serious failures. An OEE strategy helps you understand the real performance of your equipment so you know if it’s running efficiently. It also alerts you to problems that could lead to future breakdowns and repairs. The overall effectiveness of the equipment allows you to anticipate potential machine failures, reducing maintenance costs and downtime.
Boosting Equipment Efficiency
To be more efficient, manufacturers must reduce downtime. To reduce downtime, all equipment should be checked and the problem addressed appropriately and promptly. Keeping equipment components properly maintained will ensure that they operate for several hours continuously bringing downtime drastically.
This helps optimize the performance of any device improving efficiency and eventually having a positive impact on revenue.
Instead of buying another machine, you can get the data from the software and decide whether to sell it or invest a certain amount so that you can optimize the results.
What is a good OEE?
In a utopian world, a perfect score of 100% OEE would be the goal. But in real life, a range of intervals should be considered when assessing the efficiency of any equipment.
40% – 60% – beginning of the OEE spectrum with a lot of scope to improve along with rapid and significant gains.
60% – 80% – middle of the OEE spectrum where the production processes are in good condition but have significant potential to improve.
80% – 100% – end of the OEE spectrum where the organization is doing a world-class job in optimizing the production processes. At this level, any gain becomes marginal and hence costs must be considered when trying to achieve this score.
How to improve OEE
Many factors influence the overall OEE score. Implementation of best practice like Preventive Maintenance, Lean Manufacturing, or Automation can dramatically improve manufacturing procedures.
But any improvement starts with the data collection. Real-time intelligence, reporting, and analysis are the backbone for improvements. Based on the data, you can identify bottlenecks, weaknesses, and inefficient processes. By obtaining an overview of the machines, equipment, or supply chain, managers can introduce upgrades such as automated spare parts and work order scheduling.
How does Cryotos help in achieving the OEE?
If you want to gather benchmark data for evaluating OEE, Cryotos has free templates designed for manufacturing industries to help you get started. You can easily track details of your products through various checklists, schedule preventive maintenance, or conduct quality audits.
For even more advanced manufacturing insights, try Cryotos Inspections for free or book a demo to see how we can help with your specific use case.