The term ‘overall equipment effectiveness’ is one that is often used as a jargon term, which few people fully understand, but it is an effective tool that is often used within the process of lean manufacturing as a ‘key performance indicator’ and allows success to be measured by comparing manufacturing units in different industries.
In brief OEE measures how effective the equipment used for manufacturing actually is in practice, as opposed to in theory. It is a useful tool because it provides a very good, all round and comprehensive measurement of how a machine performs; it is in effect a 3 dimensional picture of performance.
OEE is comprised of 6 metrics, often referred to as the ‘hierarchy of metrics’ which are:
1. This is the OEE itself, which is a method of measuring how well a unit performs when it is operational, in comparison to how it ought to perform.
2. TEEP is the second metric and this is the total effective equipment performance, which measures the OEE set against time, in other words, 24 hours a day, over 365 days.
3. Loading: This is the part of the TEEP representing the amount of time that units are actually operational.
4. Availability: this can be defined as uptime, i.e. when the equipment is available to operate.
5. Performance: this is the speed at which the manufacturing unit operates as a % term of the capacity of the unit.
6. Quality: This is often referred to as being FPY, which is the First Pass Yield and is the number of good i.e. perfect items that are produced with no defects.
OEE In Action
OEE takes a manufacturing unit and then breaks down its performance into 3 different components: namely:
Each of these will highlight any specific aspect of the manufacturing process where improvements can be made or where output is poor or not up to standard.
OEE is not, however, a programme that seeks to ensure that all equipment operates to 100% efficiency. This is not a realistic aim, with most companies aiming to achieve a level of 85% efficiency. This is a realistic figure that can be achieved, whereas anything higher could lead to failure to meet the challenge.
Benefits of OEE
The most obvious benefit of OEE is that it provides such a comprehensive view of how machinery operates. But it actually goes deeper than this because it forces an organisation to look at individual items of equipment and make sure that the maximum benefits are being obtained from the equipment.
Because it places the manufacturing unit or item of equipment under a (virtual) microscope, it allows real in depth analysis of how the unit performs. This means that a number of parameters can be examined, such as the shift or the specific part numbers involved. This means that all different aspects of the performance are assessed, instead of having to rely on verbal data from operators.
Verbal data or merely assessing outputs, does not give a clear indication of what is causing the manufacturing unit to perform at a certain level. With OEE, the reasons for performance become clear, which means that all wastage within the processes or inefficiencies can be identified and then rectified or improved upon.
It is a complex tool that needs to be administered carefully in order to secure accurate results, but when it is utilised it can radically alter how a company operates and the equipment that it uses, which in turn makes the company more efficient and less wasteful.