What is OEE

If you don’t measure it how can you hope to manage it!

No matter what type of process or manufacturing operation you are involved in and regardless of company size
you are likely to be under constant pressure to improve performance, improve quality and increase equipment
availability. OEE Overall Equipment Effectiveness provides a solution.

Targeting any one of these three key areas for improvement, availability, performance or quality, may seem a
major task and addressing all three together may seem like the holy grail. However, if these areas can be
addressed simultaneously then significant improvements can be made throughout the production process,
output can be increased, product variation can be expanded and production cost reductions can be achieved
using OEE.

OEE is a simple but clever calculation which focuses on individual items of process or manufacturing equipment
at a finite level and allows their ‘effectiveness’ to be measured individually or in groups (i.e. with other equipment
items). The OEE calculation is based on the ratio of the three key production parameters, availability,
performance, and quality with time (e.g. planned shift time/s) being used as the baseline measurement.

What is OEE and how is it calculated:

OEE% = Availability % x Performance% x Quality%

Where:

Availability % = actual running time / planned cell production time

Performance% = pieces produced / the theoretical cell production rate
Quality % = good pieces / total pieces made.
OEE Calculation
Is your equipment running round the clock due to unidentified losses?
• Reduced machine speeds
• Shift changeovers
• Overrunning setup times
• Wastage and poor quality
• Products not matched to lines
• Poor planning
• Do you know exactly what the stoppages are and for how long?
Do you know your OEE (Overall Equipment Effectiveness)?

The Components of the OEE Calculation

Availability

Availability is the parameter that takes into account downtime. When a machine is not running due to a fault you
are losing planned production time :

Availability = Operating Time / Planned Production Time

Performance

Many companies use a variation here based on a Nett/Cycle calculation:

Performance = (Ideal Cycle Time * Pieces Produced) / Operating Time

Ideal Cycle Time is the maximum speed the machine can run expressed as a unit cycle time. It is sometimes
called Name Plate Cycle Time.

Performance is capped at 100%, This will ensure if a cycle time is specified too low the performance figure will
not distort the calculation.

Quality

Quality takes into account wastage due to poor Quality.

Quality = Good Pieces / Pieces Produced

Many companies use the quality component to recharge suppliers if externally sourced components are faulty.
 OEE IMPACT and the OEE Calculation
OEE IMPACT can derive OEE from both manually entered data and data gathered automatically from the plant.
By multiplying the three components of OEE together a hard and realistic KPI benchmark can be determined
against which future performance can be measured.

The worldwide average for Overall Equipment Effectiveness in manufacturing plants is between 45 and 60
percent. To achieve 'world class' manufacturing status a level of 85% or better should be targeted. OEE IMPACT
Software for downtime and efficiency provides the tools which will help you to achieve this.

Every plant and manufacturing process is different. If you operate a policy of Six-Sigma then quality levels of
96.5 % would be unacceptable - 99.99% would be a better target to achieve.

Overall Equipment Effectiveness FAQ's

What is Overall Equipment Effectiveness (OEE)?

OEE stands for Overall Equipment Effectiveness (also referred to as Overall Equipment Efficiency) and is a
standard measure of performance which brings together the three most significant production metrics,
Availability, Performance and Quality.

Why is Overall Equipment Effectiveness (OEE) important to me?

Whilst many companies monitor and act upon downturns in availability, performance and quality, few look at the
three together or fully consider the impact that changes made to improve one area may have on the others.
OEE bridges that gap by unifying all three aspects of the production process into one single measurement.

Can OEE be applied to any process or manufacturing operation?

Originating in the cell-based world of manufacturing, OEE was initially designed to measure the overall
performance of individual production calls, a cell being an individual machine, a group of operatives carrying out
a process or any other ‘grouping’ for which a measurement was required. However, products like OEE Impact
have taken that original concept a stage further, expanding it to take into account other production variables
which make the measurement tool more flexible, functional and, most importantly, suitable for use in virtually
any process or production environment. We like to classify OEE Impact as an OEE+ product as it takes (and
complies with) the recognized OEE standard and adds to it!

How can I justify investment in an OEE tool without first identifying the ROI?
This is a bit of a ‘chicken and egg’ question – only a very coarse assessment of the potential for improvement
and, from that, return on investment (ROI) can be made prior to the implementation of a system of this kind.
However, from experience we know that you will start to feel the benefit almost immediately and, dependent on
the solution that you select, will recover the initial investment costs within the first few months of operation. It’s a
point to note that whilst many companies believe that they can’t significantly improve without major capital
investment those companies, when measured, are only typically achieving 40% throughput with what they’ve got
(world-class companies achieve greater that 80%!).

What type of Overall Equipment Effectiveness (OEE) solution should I be looking for?

The type of solution that you choose may very much depend on the manufacturing or process model that you
operate:

Manual Operations or Processes

For companies whose manufacturing process is primarily non-automatic (i.e. manual labour or discrete
processes with little or no automation) then a manual entry system may be the ideal solution. Gemba Solutions’
OEE Impact is typical of this type of system, offering a set of pre-defined forms onto which data can be manually
recorded, an intuitive user interface through which that data can be entered and a vast array of reports and
displays with which the recorded data can be viewed and analyzed.

Semi Automatic Operations or Processes

Where the operation or process to be measured falls somewhere between the two (i.e. where a mixture of
automatic and manual processes exist) then a solution that supports both methods of data capture would be
most suited. OEE Impact and CATS Impact both meet this requirement, OEE Impact offering a cost-effective but
feature-rich solution and CATS Impact offering a more costly but totally comprehensive solution to meet virtually
any OEE or MES requirement.
Fully Automatic Operations or Processes
Where manufacturing or process equipment is operated from which production data (running signals, product
counts, fault signals, etc.) can be automatically gathered then a system which automates the data collection
process should be considered. Gemba Solutions’ CATS Impact, the latest manifestation of the highly successful
CATS product range, is such a solution, offering as standard interfaces for data collection into all of the most
commonly used PLCs (i.e. Siemens, Modicon, AB, Omron, GE, etc.) and sub-systems (ERP, HR, etc.) found in
the manufacturing and process arena.

How do I implement an Overall Equipment Effectiveness (OEE) Solution?

How should I select the area(s) on which to implement an OEE tool?

Our clients typically fall into one of two groups - those that aren’t aware of any performance issues and those
that know they have room for improvement and are looking for tools that will assist in their measure and
analysis. In each case the recommended approach may differ:

I’m not aware that I have performance issues …

Whether or not your aware of it your operation will have scope for improvement - and if you’re not currently
measuring or analyzing it then how can you possibly know what you can or can’t achieve.

In this case we’d recommend the implementation of a pilot scheme based on a manual entry solution (the most
cost-effective option) targeted at a known bottleneck or process/labour-intensive section of your operation. At
worst the pilot will provide quality information confirming that things couldn’t improve and that you are, indeed, a
world class manufacturing company (pat on the back!), at best it will do its job in identifying where your potential
issues lie and where improvements should be targeted.

Once proven, the pilot can be expanded to encompass other areas of the plant or process identified as having
potential for improvement. Where the capability exists for the automatic collection of OEE data from the plant the
automatic data collection module can be added, removing the need to collect and enter data and increasing the
accuracy and resolution of the data gathered.

We need to improve our performance…

Many companies have already woken up to the benefits that accurate measurement and analysis of
performance data can bring, have started down the OEE path and already know where their current bottlenecks
lie. For those companies that acknowledge a need for measured improvement then the question becomes what
to use rather than where to target it The choice in this case may come down to Manual entry versus Automatic
Entry, each of which offers its own advantages and disadvantages.

The key benefit of going for a manual entry solution rather that one offering automatic data collection is cost.
However, when a plant already has some kind of control network linking the key production process
components (e.g. PLC network) then making use of that network and the information available on it will lead to
an accurate, effective and long-term solution to measuring and continually improving performance on an
ongoing basis.
For further details of what our OEE IMPACT and CATS products have to offer please visit our product websites
at www.oeeimpact.co.uk and www.gembasolutions.co.uk/cats