OEE (Overall Equipment Effectiveness) is the gold standard for measuring manufacturing productivity. It identifies the percentage of manufacturing time that is truly productive. Companies can use this indicator to evaluate the effectiveness of automation solutions that are considered production critical. Many businesses struggle with effectiveness of new automated solutions, specially right after deployment. OEE could be used as a key performance indicator (KPI) for evaluating the effectiveness of the new automated equipment, robotic work cell, or the entire automated line and help with prioritizing the improvement activities.
What is OEE?
The OEE of a manufacturing unit are calculated as the product of three separate components:
Availability: percentage of scheduled time that the operation is available to operate. Often referred to as Uptime.
Availability = Operating Time / Planned Production Time
Performance: speed at which the Work Center runs as a percentage of its designed speed.
Performance = (Units Produced * Ideal Cycle Time) / Operating Time
Quality: Good Units produced as a percentage of the Total Units Started. It is commonly referred to as the first pass yield (FPY).
Quality = (Units Produced - Defective Units) / Units Produced
Each of the three components of the OEE points to an aspect of the process that can be targeted for improvement. OEE may be applied to any individual Work Center, or rolled up to Department or Plant levels.
OEE = (Availability)*(Performance)*(Quality)
OEE = (Good Count × Ideal Cycle Time) / Planned Production Time
Each of the three components of the OEE points to an aspect of the process that can be targeted for improvement.
Six Big Losses
To be able to better determine the sources of the greatest loss and to target the areas that should be improved to increase performances, these categories (Availability, Performance and Quality) have been subdivided further into what is known as the 'Six Big Losses' to OEE.
These are categorized as follows:
Rejects on Start up
The reason for identifying the losses in these categories is so that specific countermeasures can be applied to reduce the loss and improve the overall OEE.
OEE as a Tool for Continuous Improvement
A good practice for driving continuous improvement for an automation solution or any other equipment is measuring OEE and its underlying causes of lost productivity. It is recommended to track OEE along with Availability, Performance, and Quality over time to get a true picture of impact of improvement projects.
As an example, the following table clearly shows that increased speed of the line in the second week resulted in higher performance, but the quality suffered. It can be seen that the overall effectiveness of the equipment has suffered even though the line runs faster.
OEE for Automation Deployment
OEE can be used for evaluating the effectiveness of an automated solution during the initial deployment. It is important to monitor all three factors during this period to prioritize tasks and projects to improve and increase effectiveness of the solution as soon as possible to meet production demand and achieve the objectives of the investment.