Overall equipment effectiveness (OEE) is a key measurement in the improvement approach called Total Productive Maintenance (TPM). Before you begin learning about OEE, it is useful to  understand a little bit about TPM. TPM is a companywide approach for improving the effectiveness and longevity of machines. It is key to lean manufacturing because it attacks major wastes in production operations. Developed origi­nally to help a supplier meet the stringent requirements of the Toyota Production System,

TPM is used today in companies around the world to improve the capability of their equipment. TPM has a number of waste-reduction goals, including equipment restoration and maintenance of standard operating conditions. TPM methods also improve equipment systems, operating procedures, and maintenance and design processes to avoid future problems. The main strategies used in TPM are often referred to as “pillars” that support the smooth operation of the plant.

The overall equipment effectiveness measure is important to many of the TPM pillars, but is probably most important to the first four pillars in the figure. This is because these pillars can directly influence OEE through daily operations, maintenance, or improvement activities.

Manufacturing companies are in business to make money, and they make money by adding value to materials to make products the customers want. Most companies use machines to add value to the products. To add value effectively, it is important to run the machines effectively, with as little waste as possible. Overall equipment effectiveness is a measurement used in TPM to indicate how effectively machines are running.

What do we mean by overall equipment effectiveness?

Many people are familiar with the idea of” efficiency,” which usually reflects the quantity of parts a machine or a person can produce in a certain time. OEE is different from efficiency in several ways. A machine’s overall effectiveness includes more than the quantity of parts it can produce in a shift. When we measure overall equipmcnt effectiveness, we account for efficiency as one factor:

Availability: a comparison of the potential operating time and the time in which the machine is actually making products.

Performance: a comparison of the actual output with what the machine should be producing in the same time.

Quality: a comparison of the number of products made and the number of products that meet the customer’s specifications.

When you multiply performance, availability, and quality, you get the overall equipment effectiveness, which is expressed as a percent­age. OEE gives a complete picture of the machine’s “health”­not just how fast it can make parts, but how much the potential output was 1imited clue to lost availability or poor quality. When you multiply performance, availability, and quality, you get the overall equipment effectiveness, which is expressed as a percent­age. OEE gives a complete picture of the machine’s “health”­not just how fast it can make parts, but how much the potential output was 1imited clue to lost availability or poor quality