What is OEE (Overall Equipment Effectiveness) in manufacturing ?
Manufacturing Industries always strives hard for quality production of goods. Time is money for every industry and it is important to consistently keep an eye on each and every asset’s performances. Hence the term OEE exists. OEE (Overall Equipment Effectiveness) is the key performance indicator metrics that is used to calculate and analyze the performance of every asset in the organization. There are three major terms in OEE measurement such as Availability(A), Performance(P) and Quality(Q). Thus OEE metrics gives you a clear insight on how often and how well a shop floor unit is capable of producing goods and the areas where there is lag. This helps you to carry out a regular maintenance of machines resulting in maximum output.
Why measure OEE ?
The ultimate goal of any manufacturing sector will be to enhance the operation to yield more production. In a complex manufacturing environment there are more chances of risk factors that could affect the operations. Hence constant maintenance and streamlining of processes should take place mandatorily. Performing an OEE analysis gives you valuable information that avoids many critical issues. The effective use of OEE will help you find the loss, eliminate the errors and improve machine performance.
OEE is measured by three factors, namely Availability, Performance and Quality. Availability refers to how often the machines are available for the scheduled production process. Performance refers to how well the machine operates at its efficiency level during the operation. Quality refers to how much standard goods are produced without any defects.
1.First measure the availability of the asset, that will be the total scheduled hours divided by the actual run time the asset has operated.
Example : A machine is set to run 12 hours of production but it suffers a breakdown and operates only for 11 hours, then the availability will be 91.7%.
2.Secondly measure the performance metrics, that will be the total number of units set to be produced divided by the actual units produced by the asset.
Example : Let’s say the production rate per hour is 1000 units of goods hence out of total 12000 units, only 11500 had been produced. Then the machine speed is reduced that results in the performance score as 95.8%
3.Third we have to measure the quality, that is total items produced divided by the number of defective products.
Example : The asset produces 12000 units of goods in 12 hours but only 11700 items are usable and others are defective products. The quality score here will be 97.5%
Now the OEE is calculated by multiplying all the 3 factors, A x P x Q = 85.7%
This is the overall equipment effectiveness for the particular asset and with this information we can easily track the defects and improve the performance by taking necessary actions on time.
OEE Benchmarks :
For a perfect OEE, a machine must be 100% available without downtime, give100% performance and 100% quality products without any defective ones.
An OEE score of 85% means a world class for discrete manufacturing with high output and quality ratio.
An OEE score of 60% means there is room for some improvements that need to be done.
An OEE benchmark of 40% is very low and generally occurs for starters when measuring the OEE of their machines where constant improvements are required.
Benefits of Overall Equipment Effectiveness :
OEE strategies are a great advantage for organizations to achieve product targets. It helps in reducing machine downtime, eliminating errors, avoiding delay in production, ensures quality standards and increases competitiveness. Let us see some of the benefits from implementing OEE.
Return of Investment for Equipment :
Since the companies invest a lot of money in machineries it is important to track the performances and get the most out of it. With the help of OEE metrics, you can produce more items with the same machine in the same duration compared to the initial period.
Increase Competitiveness :
Manufacturing companies are more focused on reducing defects and production lags to withstand the competitiveness. OEE metrics help to identify those lags and make the right time decisions to avoid future problems thus ensuring enhanced production. This will automatically lead to quality products as well.
Cutting Machinery Costs :
Once you start tracking the machine performance, you can calculate the efficient run time and analyze the possibilities for breakdown times. This allows you to have regular maintenance thus preventing any bigger problems that may occur if not properly taken care of.
Easily Visualize Performance :
With OEE, you can easily visualize the exact problems in the production process rather than relying on assumptions. This data clearly indicates where there is an issue and which area needs more focus and improvements.