Digital TransformationManufacturingManufacturing IntelligencePeople & Places

What is Overall Equipment Effectiveness (OEE) for Industrial Companies?

By March 10, 2021 No Comments

What is Overall Equipment Effectiveness (OEE) for Industrial Companies?

OEE or Overall Equipment Effectiveness’s enables you to measure your facilities’ efficiency.
OEE allows you to measure efficiency against historical benchmarks and current goals.
OEE, specifically the downtime aspect, allows you to figure out why your system is not running at it’s highest potential, and to find ways to increase your efficiency. I talk a lot about this when I describe picking the low hanging fruit.

At the most basic level it’s a math equation. We pull in and analyze process data, and then are able to determine where we are in relation to where we have been historically and where we want to go.

OEE = Availability x Performance x Quality

Availability = Run The / Planned Production Time

Performance = Ideal Cycle Time x Total Count / Run time

Quality = Good Count / Total Count

Your OEE is Terrible!

Not measuring OEE?
Then you’re leaving money on the table.
Most facilities that are constrained with their production think that they are running flat-out at full capacity.
You are almost certainly not. In my experience, you’re probably running at mid 20’% of efficiency.

Think about it like this: If you’re running at 70% Availability, 70% Performance, and 70% Quality, you probably think that your facility is running at 70% . WRONG!

OEE = Availability x Performance x Quality

OEE = .7 x .7 x .7
OEE = .343
OEE = 34.3%

Think about the difference between 70 and 34! Think about all the time that you’re wasting. All the scrap you’re throwing away. All the re-worked items your employees are spending their limited time and energy on.

World Class OEE is 85%

Why are you leaving millions of dollars on the table?

Incrementally adding tracking and data visualization will find a 12-32% bump in your OEE.
Not can.

Check out all my Manufacturing Intelligence posts.

Want to learn more about how much you’re leaving on the table? Drop Dave an email and we’ll schedule a time to walk through the, “How Much Money Am I Losing,” Calculator.