Power of Overall Equipment Efficiency in the Manufacturing Industry - OEE

PRODUCTION

R.K Verma

6/29/2023

In today's fiercely competitive manufacturing industry, optimizing operational efficiency is crucial for businesses aiming to stay ahead of the curve. The concept of Overall Equipment Efficiency (OEE) has emerged as a powerful metric to measure and improve the effectiveness of manufacturing processes. By providing insights into equipment performance, OEE enables manufacturers to identify bottlenecks, reduce downtime, enhance productivity, and ultimately drive profitability. In this blog, we delve into the significance of OEE and explore how it revolutionizes the manufacturing landscape. Topic Covered are :

  • Understanding of OEE

  • Key factors to evaluate OEE

  • Importance of OEE

  • Formula to calculate OEE

Understanding of OEE

Overall Equipment Efficiency (OEE): Overall Equipment Efficiency (OEE) is a comprehensive metric that evaluates the performance of manufacturing equipment by assessing three key factors: availability, performance, and quality. By considering these factors, manufacturers can gain a holistic view of how effectively their equipment is being utilized and identify areas for improvement

Key Factors to evaluate OEE

1. Availability: Availability measures the extent to which equipment is available for production during scheduled operational time. It takes into account factors such as downtime due to breakdowns, changeovers, and maintenance. Manufacturers can optimize availability by employing proactive maintenance strategies, implementing robust preventive maintenance schedules, and minimizing unplanned downtime.

2. Performance: Performance evaluates how efficiently equipment performs during production. It considers factors such as speed losses, small stops, and idling time. By analyzing performance metrics, manufacturers can identify opportunities to enhance equipment output and eliminate inefficiencies. Optimizing equipment speeds, reducing setup and changeover times, and implementing continuous improvement initiatives are effective ways to improve performance.

3. Quality: Quality measures the extent to which equipment produces products that meet the required standards. It accounts for factors such as defects, rework, and scrap. Ensuring product quality is crucial to maintain customer satisfaction and minimize waste. Implementing quality control measures, conducting regular inspections, and providing operator training can help enhance equipment quality.

Importance of OEE

1. Identifying bottlenecks: OEE provides a detailed understanding of equipment performance, enabling manufacturers to pinpoint bottlenecks and production constraints. By identifying these bottlenecks, businesses can develop targeted improvement strategies to optimize equipment utilization and increase overall productivity.

2. Enhancing equipment reliability: By monitoring availability, OEE helps manufacturers identify and address equipment downtime issues promptly. Proactive maintenance practices, predictive analytics, and condition monitoring techniques can be employed to reduce unplanned breakdowns, enhance equipment reliability, and minimize costly production disruptions.

3. Improving productivity: OEE reveals opportunities for performance improvement by identifying areas where equipment is underperforming. Manufacturers can use this information to optimize equipment speeds, reduce setup and changeover times, and streamline production processes. Improving productivity not only increases output but also reduces lead times, enhancing overall customer satisfaction.

4. Driving continuous improvement: OEE acts as a catalyst for fostering a culture of continuous improvement within manufacturing organizations. By regularly monitoring and benchmarking OEE metrics, businesses can set performance targets, track progress, and initiate improvement initiatives. Engaging employees in problem-solving and encouraging innovation can lead to sustained efficiency gains and operational excellence.

Formula to calculate OEE

The formula to calculate Overall Equipment Efficiency (OEE) is as follows:

                          OEE = Availability × Performance × Quality

Let's break down the formula and provide an example to illustrate how it works.

  1. Availability: Availability represents the actual production time compared to the scheduled production time. It is calculated as follows:

   

Availability = (Operating Time - Downtime) / Operating Time

For example, let's assume that the scheduled production time for a machine is 480 minutes (8 hours), but it experienced 60 minutes of downtime due to breakdowns or changeovers. The operating time would be 480 minutes - 60 minutes = 420 minutes.

 Availability = (420 minutes - 60 minutes) / 420 minutes = 0.8571 or 85.71%

  1. Performance: Performance measures how efficiently the equipment performs during the operating time. It takes into account factors such as speed losses, small stops, and idling time. The calculation is as follows:

Performance = (Ideal Cycle Time × Total Count) / Operating Time

Let's assume that the ideal cycle time for producing one unit is 2 minutes, and during the operating time, a total of 200 units were produced.

Performance = (2 minutes × 200 units) / 420 minutes = 0.9524 or 95.24%

  1. Quality: Quality represents the ratio of good products produced to the total number of products produced. It is calculated as follows:

                             

                          Quality = Good Count / Total Count

Suppose out of the 200 units produced, 180 units were deemed of good quality.

                          Quality = 180 units / 200 units = 0.9 or 90%

Now, we can calculate the Overall Equipment Efficiency (OEE) by multiplying the Availability, Performance, and Quality percentage

OEE = Availability × Performance × Quality = 85.71% × 95.24% × 90% = 0.7717 or 77.17%

In this example, the Overall Equipment Efficiency (OEE) for the given machine is 77.17%.

By calculating OEE regularly and tracking its trends over time, manufacturers can monitor their equipment's performance, identify areas for improvement, and take proactive measures to enhance overall operational efficiency.

Note : In general, Good Overall Equipment Efficiency percentage must be more than 85%

Conclusion :

In an era characterized by intense global competition, manufacturing companies must continuously seek ways to optimize their operations. Overall Equipment Efficiency (OEE) emerges as a valuable tool that enables manufacturers to measure and improve equipment performance, identify bottlenecks, enhance productivity, and drive profitability. By focusing on availability, performance, and quality, businesses can harness the power of OEE to revolutionize their manufacturing processes, achieve operational excellence, and remain competitive in a rapidly evolving industry.