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OEE indicator - machine efficiency and equipment utilization

OEE is an optimization indicator which role is to indicate the status of current situation and conscious control of production losses.

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OEE indicator

In Lean Manufacturing terms, Overall Equipment Effectiveness (OEE for short) is a measure of the added value that is generated by equipment – a piece of equipment, a machine, a production station. The OEE indicator is scaled with percentage values. A value of 100% means that the equipment always works at the right pace without any unplanned downtime and never produces poor quality products.
Losses in the production process are a natural part of it. Therefore, the ideal value of the indicator (at the level of 100%) in practice is not encountered. A value of 85% and more is considered a good OEE. However, in some industries the value of 85% is impossible to achieve. Due to the specificity of production, in many companies a satisfactory value will be 70%.

Structure of OEE indicator

The Overall Equipment Effectiveness index measures three essential aspects of machine performance. These are:

  • Availability – defines how much time the machine actually worked after subtracting planned and unplanned downtime.
    Planned downtimes are changeovers (lasting according to the nominal, standard duration). They include maintenance, planned machine downtime, breakfast breaks and training.
    Unplanned downtime is downtime related to failures, micro-downtime (if recorded) and downtime related to any expectations (for example, component shortages).
Overall Equipment Effectiveness OEE Availability
  • Productivity – is often defined as the speed or efficiency of a job. This indicator shows whether the machine in a given period of time worked effectively and whether it produced according to the assumed norms. An important aspect is the correct definition of cycle times for products. Failure to meet the condition of correctness will result in a calculation result in values that are far from the truth and thus falsifying the entire OEE performance indicator.
Overall Equipment Effectiveness OEE Productivity
  • Quality – this is a very simple indicator that determines the number of good pieces relative to all pieces produced.
Overall Equipment Effectiveness OEE Quality

Example indicator values:

Overall Equipment Effectiveness OEE

Knowing the values of each aspect of machine operation we can calculate the OEE index. Its formula is:

OEE = AVAILABILITY x PERFORMANCE x QUALITY

By substituting the above values into the formula we get: 58% x 82% x 87% = 41%

This means that the machine worked efficiently, producing good pieces for 41% of the available time.

Use of the OEE indicator

Overall Equipment Effectiveness is considered to be the best optimization indicator. Its role is not only to indicate the status of the current situation, but also the possibility of continuous and conscious control of waste in the production process, thanks to tracking the basic aspects of machine operation (availability, productivity and quality).
The value of the indicator in practice is often presented in the form of a pie chart of losses in relation not only to availability, but also to Global Open Time (GOT), i.e. in such a way as to show all downtimes for the analyzed equipment.

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