Overall Equipment Effectiveness (OEE) is a “best practices” way to monitor and improve the effectiveness of machines and manufacturing processes (i.e. manufacturing cells, assembly lines). OEE is frequently used as a key metric in TPM (Total Productive Maintenance) and Lean Kaizen Workshops.
OEE is calculated by multiplying 3 factors Availability x Performance x Quality. Although OEE can be calculated through a simple formula as well, i.e. Actual Good output / Total Equipment Capacity for time plant is required to run, calculating OEE by three factors is important to understand the key losses impacting the equipment efficiency.
First element of OEE calculation is Availability Ratio. Availability takes into account Down Time Loss. Availability is calculated as Running Hours / Net Operating Time
Lets understand Net Operating Time first. it is the time you wanted your plant to run. Net Operating time is calculated as
Total Available Time – Planned Shutdown time
Total Available Time is the amount of time your plant is open and available for equipment operation.
Planned Shut Down is total of time taken by events such as Lunch time, Tea Time or time taken for Planned Maintenance. These are the events where there was no intention of running production.
Running Hours is calculated as Net Operating Time – Unplanned Downtimes
Unplanned downtimes includes downtimes due to breakdown, lack of raw material, lack of manpower, tool change time, changeover time etc. Changeover time is included in Unplanned downtimes, since it is a form of down time. While it may not be possible to eliminate changeover time, in most cases it can be reduced by implementing SMED (Single Minute Exchange of Die). One school of thought is to count changeover time as planned shutdown, which is not a good approach as it will remove focus on minimising or reducing changeover time.
Lets take an example to understand Availability Ratio Calculation:
Total Available time = 24 Hours
Net Operating Time = (Total Available time – Planned Shutdown) 24 Hours – 1 hours = 23 Hours
Running Time = (Net Operating time – unplanned downtimes) 23 Hours – 3 hours = 20 hours
Availability Ratio = (Running Hours / Net Operating Time) 20 Hours / 23 Hours = 86.95%
Second element of OEE calculation is Performance Ratio. Performance takes into account Speed Loss, which is caused by equipment running at speed lower than target speed. Performance Ration is calculated as Total Output / Target output in Running hours.
Total Output is total output from machine including rejection or bad output.
Target Output in running hours is calculated as Target output per hour x Running Hours.
Continuation of above example to understand Performance Ratio Calculation:
Total Output = 1700 Pcs (1600 Good pcs + 100 Rejected pcs)
Target Output = (Target output per hour x Running Hours) 100 Pcs x 20 hours = 2000 pieces
Performance Ratio = (Total Output / Target Output) 1700 pcs / 2000 pieces = 85%
Third element of OEE calculation is Quality Ratio. Quality takes into account Quality Loss, which accounts for produced pieces that do not meet quality standards, including pieces that require rework. Quality Ratio is calculated as Good output / Total Output.
Continuation of above example to understand Quality Ratio Calculation:
Good Output = 1600 Pcs
Total Output = 1700 Pcs
Quality Ratio = (Good output / Total Output) = 1600 Pcs / 1700 Pcs = 94.11%
OEE = (Availability x Performance x Quality) 86.95% x 85% x 94.11% = 69.55%