Stock and manufacturing glossary
OEE
Overall equipment effectiveness
OEE (overall equipment effectiveness) measures how much of a machine's planned production time is truly productive. It multiplies three ratios, availability, performance and quality, so an OEE of 60% means only 60% of planned time made good parts at full speed.
Why it matters to your business
Before buying another machine, it is worth knowing how much of the existing ones you really use. Many factories find that stoppages, slow running and rejects consume far more of the planned time than anyone expected. OEE puts that loss into one number and, more usefully, splits it into three causes, so you know whether to work on changeovers, speed or quality.
How it works
Take one shift on a packing machine:
| Figure | |
|---|---|
| Planned production time | 8 hours = 480 minutes |
| Stoppages (breakdown, changeover) | 60 minutes |
| Run time | 420 minutes |
| Ideal speed | 1 unit a minute |
| Units made | 378 |
| Good units | 360 |
- Availability = 420 ÷ 480 = 87.5%
- Performance = 378 ÷ 420 = 90%
- Quality = 360 ÷ 378 = 95.2%
- OEE = 87.5% × 90% × 95.2% = 75%
A quick check: 360 good units at 1 a minute is 360 minutes of fully productive time, and 360 ÷ 480 is 75%. If the machine and its operator cost ₹1,200 an hour to run, the 2 lost hours a shift cost about ₹2,400, every shift. Cutting changeover time by 30 minutes would lift availability to 93.75%.
Common mistakes
- Leaving out small stops. Five-minute stops rarely get written down but often add up to more than the breakdowns.
- Inflated ideal speed or planned time. Use the machine’s real best speed and the actual shift time, or the figure means nothing.
- Comparing different machines. OEE is best for tracking one machine or line over time, not for ranking unlike machines.
- Chasing the number, not the loss. Look at which of the three factors is lowest and fix that.
Questions about OEE
How is OEE calculated?
OEE = availability × performance × quality. Availability is run time ÷ planned time, performance is actual output ÷ the output possible at ideal speed in that run time, and quality is good units ÷ total units made.
What is a good OEE?
A figure of 85% is widely quoted as world class, and many plants run well below it. More useful than any benchmark is your own trend, machine by machine, month by month.
What is the difference between OEE and yield?
Yield compares good output with planned output or with material used. OEE looks at the machine's time, telling you whether losses came from stoppages, slow running or rejects.
Can OEE be more than 100%?
Not if it is measured correctly. A figure above 100% usually means the ideal cycle time was set slower than the machine can really run.
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