Measuring Overall Equipment Effectiveness (OEE) originally belongs to the Japanese improvement method Total Productive Maintenance (TPM) and is linked to Lean Manufacturing. A very short definition of Overall Equipment Effectiveness (OEE) is the ratio between the number of good products a production asset delivers and the maximum achievable. To calculate OEE, several factors are multiplied, including machine availability, machine performance and quality.
The image below gives a schematic representation of OEE:
Overall Equipment Effectiveness, called OEE, is a set of KPIs focused on the productivity of machines and production lines.
OEE metrics are often used as KPIs within improvement methodologies such as Lean Manufacturing, Six Sigma and Total Productive Maintenance.
OEE is a percentage indicator that shows how a production line performs compared to the most ideal situation: 100% speed, 100% quality and 100% availability.
The calculation of Overall Equipment Effectiveness uses three different metrics:
- Availability (Time)
- The percentage of actual production time relative to the planned time. Also called uptime.
- Performance or efficiency (Speed)
- The speed of the machine or production line calculated against the most optimal speed.
- Quality (Good count)
- The number of good products in relation to the total number of products produced. Often called First Pass Yield.
Overall Equipment Effectiveness (OEE) = Availability × Performance × Quality
OEE calculation
To calculate the OEE of a production machine, we use the following example. A production line has the following characteristics:
- Two shifts per day of 8 hours each
- Setup time: 60 minutes per shift
- Downtime: 120 minutes per shift
- Maximum speed: 100 products per hour
- Average speed: 70 products per hour
- Quality: 90% good products
Availability
The planned time (A) in this case is 2 shifts × 8 hours × 60 minutes = 960 minutes.
The downtime in this case is 2 shifts × 60 minutes setup time + 2 shifts × 120 minutes downtime = 360 minutes.
This makes the total production time (B) 960 – 360 = 600 minutes.
Availability = B / A = 600 / 960 × 100% = 62.5%
Performance
In this case, Performance (Efficiency) is calculated from the maximum output and the actual output.
A point of attention in calculating performance is that the maximum output really must be the maximum output. Otherwise performance can exceed 100%, which is not possible. To calculate performance it is therefore important to determine the maximum speed of the machine.
The maximum speed, and therefore the target output (C), is 100 products per hour in this case.
The average speed actually achieved (D) is 70 products per hour in this case.
Performance = D / C = 70 / 100 × 100% = 70%
Quality
Quality is determined from the actual output and the number of good products. In this case the quality is already known: 90%.
Quality = 90%
Overall Equipment Effectiveness
Using the data above, the OEE can now easily be calculated.
| Factor | Calculation | Result |
|---|---|---|
| Availability | 600 / 960 | 62.5% |
| Performance | 70 / 100 | 70% |
| Quality | 90% | |
| OEE | 62.5% × 70% × 90% | 39.4% |
Overall Equipment Effectiveness = Availability × Performance × Quality
OEE = 62.5% × 70% × 90%
OEE = 39.4%
Different calculations
There are several ways to calculate OEE. The calculation above is a general approach; other factors are sometimes used for OEE. Note, however, that the calculated OEE can never exceed 100%.