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What is Overall Equipment Effectiveness (OEE) and Why Does it Matter?

Overall Equipment Effectiveness (OEE) is a standard used to measure manufacturing productivity. It determines if aspects such as time, facilities and material are used to their full potential.
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An OEE score is usually expressed as a percentage, and is made up of 3 keys parts:

Quality, performance and availability.

 OEE = Quality * Performance * Availability

OEE looks at each of these components within the planned production time. That is, ignoring time spent in plant shutdowns, lunch hours, break times etc, which is considered schedule loss. The goal of the OEE is to identify any productivity and efficiency losses within this planned production time, and where these efficiencies are located. Steps can then be made to mitigate these losses.

Quality of Production

Quality accounts for production rejects, defects and parts which require any rework. 100% quality indicates that only ‘good’ parts are produced, with no scrap.

Asset Performance

Performance looks at the time taken for production. It accounts for any stops in production, such as idling or minor stops, or slow cycles and reduced speed. A 100% performance score means that, when running, the production process is doing so as fast as possible.

Production Availability

Availability looks at planned and unplanned stops. It is the ratio of run time to the scheduled production time. A score of 100% for availability suggests that the production process is running when it is scheduled to do so.

An OEE score of 100% suggests that an asset is not producing any waste parts (100% quality), at maximum speed capable (100% performance), with no interruptions (100% availability).

Image- OEE Factors [1]

The Six Big Losses

One of the aims of the OEE is to reduce the Six Big Losses, such that the resultant increase in efficiency and productivity intended by the OEE is achieved.

The Six Big Losses describe the most common causes for a loss of productivity in manufacturing.

Image- Six Big Losses [2]

Equipment Failure

Equipment failure is an aspect of availability loss, and accounts for any time period that the process is not running as should be, due to a failure. Examples of this could be unplanned maintenance, bottlenecks in the production line, breakdowns or unavaliability of operators.

Setup and Adjustments

The second aspect of avaliability loss. Setup and adjustments result in loss of production time due to changeover of equipment or parts, or quality inspections and checks. Loss of time due to part cleaning or warmup time is also included in this.

Reducing both equipment failure and setup up stops is critical to improve OEE, as the other OEE factors cannot be improved when the manufacturing process is down.

Idling and Minor Stops

Idling and minor stops are categorised as a performance loss, as such stops are due to factors such as equipment jams, misalignment of parts, incorrect settings or quick alterations during a process. These stops are not usually predictable and are often considered part of normal operation, thus are commonly overlooked.

Reducing Speed

Another aspect of performance loss is speed reduction. This occurs when processes run slower than the theoretical cycle time. This situation may occur due to incorrect control and operation of the equipment, inappropriate materials or worn-out tools.

Process Defects

Process defects are classed as a quality loss and account for any parts produced during steady-state operation which are not up to standard. These parts are either scrapped or require further work to reach the expected part quality. Causes for defects can include operator error, inappropriate materials or incorrect equipment operation and settings.

Reduced Yield

Classed as the second aspect of quality loss. Reduced yield is similar to process defects, however, reduced yield is produced during the beginning of production. That is, parts produced from the machine start-up to the point that steady-state operation is obtained. These parts may be waste/ scrap, or may need further work to reach the expected part quality. Reduced yield can be a result of inappropriate machine settings or the need for warmup cycles.

Turning Insights Into Actions

Capturing data for the calculation of the Six Big Losses and OEE is crucial to improve the performance and efficiency of manufacturing processes. However, although a valuable tool for the identification of issues, actions speak louder than words. OEE is the first step towards optimising and improving manufacturing processes. Subsequently, informed decisions can be made based on knowledge acquired from the OEE evaluation, before taking effective action.

To turn your data into action, and find out more about improving efficiency and reducing waste, contact us.

[1] – https://www.oee.com/oee-factors.html

[2]- https://www.oee.com/oee-six-big-losses.html

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