What is OEE ?

OEE stands for Overall Equipement Effectiveness. It is a technique used to reduce the amount of downtime of a production machine. OEE was first described as a central component of the TPM methodology in 1982. Total Productive Maintenance is a concept that was introduced in 1971 by Japan’s Institute of Plant Maintenance. There is no standard how OEE should be calculated so when starting with OEE there can be a lot of discussion about calculations. We recommend to look at http://www.oeefoundation.org for further clarification on this subject.

OEE The calculations

The following graph shows how the different calculations are done.

Source: http://www.oeefoundation.org

Calculation of OEE

OEE consists of 3 parts:
  • Availability = Production time / Loading time
  • Performance = Actual output / Production time
  • Quality = Good output / Actual output
So OEE = Availibility * Performance * Quality or in other words Good products produced / expected number of products produced during the loading time. For each product/machine combination the expected number of products will be established (machine rate). During production all downtimes will be recorded. At the end or during a production run the number of parts produced and the number of rejected products will be registered. Based on this information the OEE calculation can be made and below you see an example of this calculation.

OEE calculation

This graph gives a quick indication where the losses come from. What the best approach is to start with continuous improvement depends on a lot of factors. A few examples:
  • The quality loss only shows the time lost due to defective products. The report doesn’t tell what the cost of defective products is.
  • When reducing downtimes strategic considerations are important. For example if a machine is no bottleneck and a lrge part of downtime is no orders then reducing downtime for specific reasons (change over, machine break) will only change the cause of the downtime, it will not change the OEE for that machine.
  • Increasing the lot size will improve the OEE because you need less change over but it will also lead to more stock in the final warehouse and more stock in the final warehouse is almost always a bad result

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