OEE: Know this indicator of effectiveness in industries

Have you ever noticed that in factories everywhere, there's always talk about something called OEE? It's like the main star when it comes to measuring production performance. But do we mesknow what OEE is and how to use it to boost factory performance? Let's dig a little deeper into this subject and discover the intricacies of this indicator!

OEE, which stands for Overall Equipment Effectiveness, was created to support TPM (Total Productive Maintenance). It is considered the gold standard for evaluating productivity in manufacturing. It is a central concept in lean manufacturing and a key performance indicator for any production facility, manufacturing unit, or individual workstation.

The great thing about OEE is that it's not just a pretty number to admire. It's here to make a real difference, pointing out where production needs help and how we can improve.

But of course, it's not enough to just have OEE up your sleeve and expect magic to happen . Implementing it correctly is a process that requires organization, and having an aligned team is crucial. You need to have the right data at hand, understand the basic principles, and, above all, the benefits it brings to the company .

OEE acts as a problem detector in production, revealing faults along the line and in the machines, what is often called the "hidden factory." It shows where we are losing production opportunities with the resources we have available.

Furthermore, OEE guides resource allocation and maintenance strategies by highlighting real problems within the factory. By focusing efforts on eliminating waste, OEE not only measures performance but also drives the pursuit of continuous improvement. We can go even further: if you have real-time OEE connected to an APS ( advanced planning & scheduling ) tool, you can predict whether you will meet production orders and adjust customer deliveries, and by anticipating problems or complaints, you will be taking your company to another level of information.

What's interesting about this indicator is that it focuses on critical areas of productivity loss, grouped into three main categories: availability, performance, and quality. These categories are fundamental to understanding how factory equipment is used and how products are delivered to customers.

But how do we actually calculate this OEE thing? Well, OEE is the result of multiplying three parts: availability, performance, and quality. I'll explain what each of them means and how to calculate it:

Availability

‍This is how long the machine or production line was available to work as planned, without unforeseen stoppages. To calculate this, we look at the total time the machine or line should have been working and subtract the time it was stopped for any reason. The reasons can be planned or unplanned stoppages: explain the planned ones, which were missing from the text.

Unplanned downtime occurs when the machine stops unexpectedly, without any prior scheduling. This could be due to equipment breakdown, lack of operators, or even a lack of materials. Planned downtime, on the other hand, is when we know in advance that it will happen, such as maintenance, adjusting a tool, or even cleaning the machine.

It's important to remember that the list of reasons for stoppages can vary depending on the type of production and the company . But a good way to start understanding is to note the most common causes of stoppages.

And there's one more thing: scheduled downtime, such as major planned maintenance (like year-end maintenance, for example) or renovations, is not counted as lost availability. We also shouldn't count downtime when a lack of demand or seasonality forces us to close several entire shifts in advance, leaving the machine without production scheduling. These are excluded from the OEE calculation. On the other hand, setup times and waiting times for production from other sectors to begin production are included

Performance

‍Here we are observing the actual speed of the machine or production line compared to the predicted speed. This predicted speed, sometimes called the "maximum demonstrated rate" (MDR) or "ideal cycle time," represents the maximum the machine should be able to produce.

Performance shows how much the machine actually produced during the time it was running, compared to the maximum it could have produced operating at that maximum speed.

We divide performance losses into two types:

Micro-stops: These are moments when the machine stops for a short period, usually less than a minute. Often the operator can resolve the problem quickly. However, these stops can be so frequent that their impact may go unnoticed. Examples include feeding failures, material jams, incorrect settings, and even quick cleanings that need to be done occasionally.

Slow cycles: These are times when the machine operates slower than expected. This can be caused by several reasons, such as the machine being dirty or worn, inadequate lubrication, inferior quality material, or incorrect adjustments. Human factors, such as lack of operator training or experience, can also influence this.

Quality

‍The third aspect of OEE focuses on the quality of manufactured products. In simple terms, quality refers to the percentage of products that come off the production line according to customer specifications the first time. Quality losses are divided into two categories: production rejects and initial rejects.

Production rejects: These are defects that arise during stable production, that is, when the line is operating without major problems. These defects can be corrected through rework. For example, products with incorrect weight, labeling problems, chemical or physical non-conformities, and damaged packaging.

Initial rejections: This includes defects that occur from the start of production until the line stabilizes. These defects are usually more noticeable after shift changes or when starting up equipment. Examples include products that are out of standard, equipment that needs time to warm up, or that generates waste at the start of operation.

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To make it easier to understand how to combine all of this into the formula, we've created the example below so you can better understand and calculate your OEE. Take a look:

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One important point is that each of these pillars of OEE calculation has some common errors that we must be careful not to miscalculate, thus distorting the indicator.

See examples below:

Availability:

Availability is an area where several challenges arise in OEE calculation. A common mistake is the excessive exclusion of downtime in the OEE calculation.

For example, shift changes are often omitted from calculations, even though they represent significant periods of downtime. Imagine a shift change that lasts 30 minutes when it was scheduled to last only 10 minutes. This results in a 20-minute loss in the process, which can considerably impact production. Identifying and understanding these losses is crucial for improving operational efficiency.

Performance:

A common challenge related to performance is a lack of understanding of the maximum potential output of machines. Often, manufacturers underestimate the actual production speed, which can lead to an incorrect OEE reading, with a performance percentage exceeding 100%.

One way to resolve this is to contact the machine manufacturer for information on the maximum demonstrated rate (MDR). If this is not feasible, it is possible to establish a benchmark based on records of the fastest changeovers. Periodically adjusting cycle times based on operator performance can also help improve calculation accuracy.

Quality:

With regard to quality, two main challenges arise in calculating OEE:

The lack of a reliable method for automatically recording scrap often requires operators to manually record rejects.

The delay in obtaining quality information can result in inaccurate data when calculating OEE retrospectively.

Addressing these issues is essential to ensure that the OEE calculation accurately reflects the efficiency and quality of production operations.

Understanding and implementing OEE is fundamental to setting achievable goals and optimizing equipment utilization. Following a successful implementation guide ensures you're on the right track to achieving your lean manufacturing objectives.

Now that we better understand what OEE is, how can we start implementing it in real time in our company ? At NEO, we are experts in this area and have already helped company worldwide reach their full potential. To make this journey even easier, we are offering 30 free days of our OEE tool, along with the necessary hardware to connect to your equipment and transmit signals (Yes, you read that right! 30 days with the equipment at no cost!). And before you ask about any catches or fine print, know that if you don't like it or it doesn't fit your process, simply return the equipment. It's that simple, because our mission is to help industry reach its full potential.

If you're interested, learn more about Evocon and request your free 30-day trial . Our team will contact you to arrange all the details.

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