“What is OEE and How Can It Be Measured?”

OEE Part 1 of 4 Part Blog

The term OEE is being thrown around a lot lately; so what is it exactly?  Overall Equipment Effectiveness (OEE) is a concept used in lean manufacturing implementation.  At a very basic level OEE can be measured using the following equation:

OEE = Availability X Productivity X Quality
or
OEE = A X P X Q

AVAILABILITY: is the amount of time, in percentage, the equipment is available to produce product vs the amount of time the equipment actually produced product.

Example: If a packaging machine was available to run for 8 hours, but only ran 7, you would have an Availability of 87.5%.

PRODUCTIVITY: is the comparison between maximum machine speed and actual machine speed.  This can get confusing as not all packages have the same maximum machine speed; more complex packages take more time to produce, lowering your machine productivity.

QUALITY: is the number of good packages produced compared to the total number of packages produced as a percentage.

Example: if a machine produced 28,800 packages and 28,000 packages passed QA, the quality is 97%.

If the scenario above is used for the OEE calculation it would look like this:

OEE = 87.5%(Availability) X 66%(Productivity) X 97%(Quality)

OEE = 56%!!!

This is a simple illustration of how quickly Overall Equipment Effectiveness can be lost in a production environment.  In part two, we will discuss contributing factors to OEE loss, and how to mitigate them.