OEE, when broken into its three main components, is going to track down where we lost it. OEE raised the bar and moved us away from the traditional efficiency calculation as a measure of production line output that was easily manipulated to show mediocre lines running at efficiencies up to 150%. Why does the OEE formula in Figure 1 include availability (A), performance (P) and quality (Q)? What do these words mean and what value do they bring? They’ll help us find where those other 14,400 products that should have been on the pallet disappeared to. If there are only 14,400 good products on the pallet your effectiveness was 50%, right? Then we need to count what we produced at an end point in the production process such as what’s on the pallet going to the warehouse. Maximum production speed = 60 products per minute So the fastest way to calculate it is simple: If you take the theoretical maximum speed (for example 60 products per minute) you know that at the end of a 480 minutes shift there should be 28,800 units. In this example you would be 100% effective but only 50% efficient.īasically OEE is about (as the name says) effectiveness: it is the rate between what a machine theoretically could produce and what it actually did.
But if you throw away half the filled bottles because of packaging or material defects, your yield or quality is only 50%. If you are bottling a beverage, all filled, labeled and capped bottles could theoretically be perfect, so the quality would be 100%.
The same goes for yield or more commonly known as quality (basically saleable product). So if a machine or system runs 50% effective with 1 operator and becomes 65% effective with 2 operators, the effectiveness goes up 30% (yes, 65 is 30% more than 50…) but its efficiency dropped down to 50%, based on labor! If your machine or system is capable of making 100 quality products an hour, and it makes only 70, then it is 70% effective, but we do not know how efficient it was, because nothing is said about what we had to put in (how many operators, energy, materials, etc.) to get the 70% effectiveness. To start, we have to make a clear distinction between effectiveness and efficiency before we can discuss OEE.Įffectiveness is the relation between what theoretically could be produced at the end of a process and what actually came out or was produced at the end of the process. The words efficiency and effectiveness have been around longer, but have only been used in a confused manner in the last decade or so. First of all, OEE has been around for decades in its elemental form.
Is OEE just a nice-to-have? No, it is a simple yet powerful roadmap that helps production floor people and management to visualize and eliminate equipment losses and waste. Let us look at these things in an objective and clear manner. There is a lot of confusion out there about OEE (Operational Equipment Effectiveness) and about the words efficiency and effectiveness. OEE Overview and Efficiency versus Effectiveness