What is OEE?

What is OEE? Formula to calculate OEE? Example of calculating OEE

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OEE (abbreviated by Overall Equipment Effectiveness) is a standard to measure production capacity. OEE simply determines what percentage of production time is actually efficient. According to the language of OEE, we need 03 factors which are Quality 100% (Parts, materials, good goods), Performance 100% (The faster the better) and Availability 100% (Dwelling time = 0) . Let's Johnson's Blog Find out in the following article.

What is OEE?
What is OEE?

What is OEE?

OEE is a metric used in manufacturing to measure the efficiency and productivity of a manufacturing process or machine. It calculates the ratio of the actual production time that is efficiently producing quality products, compared to the maximum possible production time. The metric takes into account factors such as downtime, speed loss, and quality loss and is expressed as a percentage.

In corporate governance and production management, which is an important parameter in comprehensive productivity maintenance. In the world, this measurement indicator has been applied for a long time and is widely used to this day in measuring the productivity and efficiency of machine operation in production. 

Ingredients of OEE

OEE consists of three components:

  • Possibility: This component measures actual production time against the theoretical maximum possible production time, taking into account any planned or unplanned downtime.
  • Efficiency: This component measures the actual operating speed of the device relative to its design speed, taking into account any loss of speed.
  • Quality: This component measures the actual quantity of good product produced against the theoretical maximum possible output, taking into account any loss of quality.

The overall OEE score is calculated as the product of these three components and represents the overall efficiency and productivity of the device or process.

The OEE score shows where a business is through three basic factors (Availability, Performance, and Quality) that indicate where a business should focus its improvement efforts.

elements of oee
elements of oee

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Full time and Planned Production Time

This is total calendar time, unrelated and not for OEE calculation, which is not a factor in OEE.

Estimated production time

The remaining time is Planned production time. OEE starts with Estimated Lead Time, businesses will have to scrutinize all efficiency and productivity losses that occur during that time, with the goal of reducing or eliminating these losses.

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Availability

Availability refers to loss of availability, including any event that stops planned production for a substantial period of time (usually minutes; long enough for the operator to document the reason). .

Unavailability includes the following elements:

  • Equipment failure (unplanned stop)
  • Set up and adjust (stop in plan)
  • Lack of materials

The time remaining after losing the ability to provide is called Running time (Runtime). Availability reaching 100% means the work order runs within the scheduled time without any downtime (no unscheduled or planned stops).

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Efficiency

Performance takes into account reduced performance, which causes the production process to run at less than the maximum possible speed when it is running. Examples of things that cause Performance Loss include machine wear, substandard materials, paper jams, etc.

Loss of performance includes the following factors:

  • Idling
  • Reduce speed

The time remaining after the performance loss is subtracted is called Real run time. Efficiency reaches 100% when production runs at maximum theoretical speed.

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Quality

Quality takes into account that the quality of the products produced is not guaranteed, that is, because the products produced do not meet quality standards. Examples of things that result in poor quality are high scrap rates, products that have to be reworked. OEE quality defines a good product as those parts that pass the manufacturing process the first time without needing to be reworked.

Quality loss includes the following factors:

  • Errors in the production process, refusal to produce
  • Reduced productivity, refused to start

The time remaining after the quality loss is called Total production time. 100% Quality means no scrap products or products that need rework.

Total production time

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Calculation OEE

Distinguish performance from efficiency

As mentioned above, OEE index helps companies identify resource usage and maintenance issues, determine what percentage of production time is actually productive, and is the standard metric for tracking progress on resolving these issues. It can be said simply, OEE's goal and defining OEE is helping companies to continuously improve. 

To calculate OEE, we need to clearly distinguish the difference in efficiency (Effectiveness) and efficiency (Efficiency). From the definition, the item of concern in this case is performance. Efficiency does not tell the company the efficiency of a machine in general, but rather the efficiency of equipment based on the interaction between production ability on a given number of machines and actual performance. 

Distinguish performance from efficiency
Distinguish performance from efficiency

Formula to calculate OEE

The simplest way to calculate OEE is the ratio between Total production time with Planned production time. Lead Time is all about producing a quality product as quickly as possible (Ideal Cycle Time) with no Down Time. Therefore, the calculation is:

  • OEE = (Qualified Product Quantity × Ideal Cycle Time) / Expected Production Time

Simple OEE calculation formula

Although this is a perfectly valid calculation of OEE, it does not provide information on 3 factors: Availability, Performance and Quality. Candlestick formula for calculating OEE most commonly used based on 3 factors of Availability (Availability), Performance (Performance) and Quality (Quality). At that time:

  • OEE = Availability x Quality x Performance

OEE is calculated by multiplying three OEE factors: Availability, Performance, and Quality.

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Availability

Availability is a component of the Overall Equipment Efficiency (OEE) metric used to measure the efficiency and productivity of a manufacturing process or machine. It represents the ratio of actual production time effectively used for production to the maximum theoretical possible production time.

This component takes into account both planned and unplanned downtime, such as scheduled maintenance, equipment failures, and breakdowns.

The available component is calculated as follows:

  • Availability = Runtime / Expected Production Time

Runtime is calculated as Planned Production Time minus Downtime, where Downtime is defined as all time due to unplanned stops (e.g. problems) or planned stops ( e.g. adjust, set).

  • Run time = Estimated production time - Downtime

A higher availability score indicates that the device is running for a greater percentage of the time and is therefore more efficient and productive.

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Efficiency

Performance is a component of the Overall Equipment Efficiency (OEE) metric used to measure the efficiency and productivity of a manufacturing process or machine. It represents the ratio of the actual operating speed to the design speed of the device, taking into account any loss of speed.

Performance is an important factor in OEE metrics because it reflects how fast the device is running and producing the product. When equipment runs at a slower than designed speed, it reduces the overall efficiency and productivity of the process.

Performance takes into account the causes of production running at less than the maximum possible speed when it is running (e.g. having to slow down because the engine is overheating, etc.). Performance is the ratio of net running time to running time.

The performance component is calculated as follows:

  • Performance = (Total / Running time) / Ideal running speed

A higher performance score indicates that the device is running at a higher design speed and therefore more efficient and productive. The performance certainly cannot exceed 100%.

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Quality

Quality is a component of the Overall Equipment Efficiency (OEE) index used to measure the efficiency and productivity of a manufacturing process or machine. It represents the ratio of actual good product produced to the maximum theoretical possible output, taking into account any loss of quality.

Quality is an important factor in the OEE metric, as manufacturing defective products not only reduces the overall efficiency and productivity of the process, but also results in additional costs for rework or scrap. Whether.

Quality takes into account the unsatisfactory quality of manufactured products, including waste and rework.

Quality is calculated as follows:

  • Quality = Good Quantity / Total

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Significance of OEE results for business operations

OEE will be calculated in % units. Simply put, the higher the OEE, the higher the productivity and vice versa. Some of the milestones against which the overall assessment is based:

  • 85 – 100%: Is the expectation of every business with long-term development goals when production activities have been optimized from good to perfect, almost no downtime, smooth and fast production. fast.
  • 60%: The average score is quite good, showing that the business is operating effectively but there are still some gaps that need to be fixed.
  • < 40%: Production is in an alarming state and there are too many limitations that need to be resolved quickly. This is also the bell for businesses to optimize their production processes, machinery and equipment. 
Significance of OEE results for business operations
Significance of OEE results for business operations

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Factors affecting the OEE

As a measure based on actual operational performance, it will also be heavily influenced by factors in the chain. Therefore, some of the following losses can greatly affect OEE:

  • Loss of machine function stops or machine function degrades.
  • Loss related to the operation of installing machinery to change or adjust production activities.
  • Loss refers to the change in equipment that wears out over time in a production operation.
  • Loss of speed and output when starting and shutting down machinery.
  • Loss of machine running capacity due to minor problems, undefined time, or machine having to idling.
  • Loss of machine speed (ton/hour) when the machine is not running at its design capacity.
  • Loss of damaged and unusable products and loss of time and cost to repair and redo that product.
  • Planned shutdown – Planned shutdown (Power outage, machine stop to PM, stop machine to eat rice…). This loss does not affect the overall performance of the equipment but reduces the production time leading to a decrease in the production output of equipment and processes.

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How to deploy oee?

OEE implementation can be done through the following steps:

  • Define production process: Clearly define the scope of the manufacturing process to be measured, including equipment, products, and processes.
  • Identify production data sources: Identify and access data sources that will be used to measure OEE components, such as equipment utilization, production quantities, and production quality.
  • Determine the theoretical maximum output: Calculates theoretical maximum production time, including design speed and availability, based on a manufacturing process definition.
  • Measure actual production data: Collect and record actual production data, such as downtime, speed loss, and quality loss, using the data sources identified in step 2.
  • Calculate OEE: Use actual production data and theoretical maximum yield to calculate an OEE score by multiplying Availability, Performance, and Quality components.
  • OEE data analysis: Analyze OEE data to identify areas for improvement, such as reducing downtime or increasing production speed.
  • Make improvements: Make the improvements identified in the analysis step and iterate the OEE measurement process to track progress and continuously improve efficiency and productivity.

By implementing OEE, manufacturers can gain a comprehensive understanding of their manufacturing processes and identify areas for improvement, resulting in increased efficiency, productivity and profitability.

Example of calculating OEE

Example 1

Soft drink factory with theoretical line parameters can produce 50 products per minute. Each shift is 8 hours. Time to start 1 shift is 15 minutes, cleaning time after each shift is 15 minutes. The mid-shift meal break is 30 minutes. The duration of the power failure is 47 minutes. Product created after shift is 15000 products, damaged product is 100 products. Calculate OEE?

Shift time8Hour =480Minute
Time to prepare before shift/clean up after shift2Vacation15Minute30Minutes Total
Lunch break between shifts1Vacation30Minute30Minutes Total
Downtime due to breakdown47Minute
Ideal running speed50pcs/minute
gross product15.000The
Faulty product100The
Parameter nameFormulaResult
Planned production timeShift time – Rest420Minute
Running timeEstimated production time – Downtime373Minute
Quality productsTotal product – Defective product14.900The
OEE factorFormulaOEE%
AvailabilityRuntime / Estimated production time88,81%
Efficiency(Gross product / Running time) / Ideal running speed80,43%
QualityQuality product / Total product99,33%
Overall OEEAvailability x Performance x Quality70,95%
Example 1: calculate OEE

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Example 2

Calculate OEE in a production shift with the following data:

  • Working shift: 8 hours
  • Lunch break: 30 minutes
  • Replace belt due to breakage: 35 minutes
  • The ideal time to produce 1 product is: 1.2 minutes (0.833 products/min)
  • Total output in shift is: 345 products
  • Product disqualified due to error: 8 products
Shift time8Hour =480Minute
Time to prepare before shift/clean up after shift2Vacation0Minute0Minutes Total
Lunch break between shifts1Vacation30Minute30Minutes Total
Downtime due to breakdown35Minute
Ideal running speed0,833pcs/minute
gross product345The
Faulty product8The
Parameter nameCalculationResult
Planned production timeShift time – Rest450Minute
Running timeEstimated production time – Downtime415Minute
Quality productsTotal product – Defective product337The
OEE factorFormulaOEE%
AvailabilityRuntime / Estimated production time92,22%
Efficiency(Gross product / Running time) / Ideal running speed99,80%
QualityQuality product / Total product97,68%
Overall OEEAvailability x Performance x Quality89,90%
Example 2: Calculate OEE

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Example 3

Calculate OEE in a 3 shift with the following data:

  • Working shift: 8 hours
  • Lunch break between shifts: 60 minutes
  • Time to prepare to run transmission line: 15 minutes
  • Cleaning time after 3 shifts: 15 minutes
  • Power failure, machine stop to replace NVL: 141 minutes
  • The ideal time to produce 1 product is: 1 minute
  • Total output in shift is: 1119 products
  • Products disqualified due to error: 60 products
Shift time24Hour =1440Minute
Time to prepare before shift/clean up after shift2Vacation15Minute30Minutes Total
Lunch break between shifts3Vacation60Minute180Minutes Total
Downtime due to breakdown141Minute
Ideal running speed1pcs/minute
gross product1119The
Faulty product60The
Parameter nameCalculationResult
Planned production timeShift time – Rest1230Minute
Running timeEstimated production time – Downtime1089Minute
Quality productsTotal product – Defective product1059The
OEE factorFormulaOEE%
AvailabilityRuntime / Estimated production time88,54%
Efficiency(Gross product / Running time) / Ideal running speed100,00%
QualityQuality product / Total product94,64%
Overall OEEAvailability x Performance x Quality83,79%
Example 3: Calculate OEE

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>>>Download: OEE calculation sample document

Epilogue

Hopefully with the above information, readers have a better understanding of OEE - this important scale to flexibly apply, improve the production situation for business establishments. Johnson's Blog Will be back with more interesting articles. Do not hesitate to follow us quickly.

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