OEE stands for Overall Equipment Effectiveness, a dimensionless parameter used to measure the efficiency of equipment, cells, production lines and even entire plants. More specifically it is the product of three factors: availability, performance, and quality.
“OEE takes the most common and important sources of manufacturing productivity loss and distills them into metrics that provide an excellent gage for measuring current effectiveness and how to improve,” says Jim Feltman, vice president at Vorne Industries Inc., a manufacturer of real-time monitoring products based in Itasca, Ill. “OEE can be a formula for success if it is used to get to the root causes of manufacturing ineffectiveness.”
The factors and their product are usually expressed as percentages. For example, the availability factor is a measure of downtime and is calculated as Availability = Actual Operating Time devided by Planned Production Time. The quality factor accounts for losses from poor quality and is calculated as Good Pieces devided by Total Pieces Produced.
Calculating the performance factor in the OEE is not quite as straightforward. As the factor that accounts for losses from running too slowly, it can be calculated in one of two ways. First is Performance = Ideal Cycle Time devided by (Actual Operating Time devided by Total Pieces). “The ideal cycle time is the minimum cycle time that your process can be expected to achieve in optimal circumstances,” says Feltman. “It is sometimes called the design cycle time, the theoretical cycle time, or the nameplate capacity.”
Because the reciprocal of cycle time is the running rate, another method exists for calculating the performance factor in the OEE equation. The first equation, therefore, can be rewritten as follows to include the running rate: Performance = (Total Pieces devided by Operating Time) ? Ideal Running Rate. Feltman notes that current practice is to cap the performance factor at 100 percent to limit the effect that any errors in specifying the ideal cycle time or ideal running rate will have on OEE.
Another variation often found in calculating OEE is the exclusion of set-up and changeover times. Feltman urges users not to follow this practice. “Many manufacturers could significantly reduce their set-up time and regain valuable manufacturing time,” he explains. “Including set-up or changeover time in the OEE calculation exposes this loss and helps manufacturers focus on improvement.”