OEE

Of all the key performance indicators, the OEE is the most important indicator for many companies. The OEE actually includes 3 indicators in one: Availability of the machine, Quality and Performance.

In Spanish-speaking countries, the OEE is also called EGE (Global or General Efficiency of the Equipment) or ETE (Total Efficiency of the Machine). OEE in English means Overall Equipment Effectiveness.

The people who calculate the OEE know that to improve it, the 6 big losses must be analyzed in depth. The most efficient way to do this is to obtain the OEE in real time, study it and make decisions AT THE TIME the problem happens, not afterwards.

The OEE is a very important indicator because it reflects all the efforts of the company to improve productivity and efficiency, as we can deduce from this graph.

The OEE is an indicator from 0 to 100%, and is made up of the multiplication of the 3 indicators mentioned above.

Example of calculating the OEE:

  • If we have an 8-hour shift, and there are 30 minutes of food and two 15-minute breaks, then the actual production time is 7 effective hours.
  • If of those 7 effective hrs, 1 hour is lost in dead times (between preparations and production problems).
  • Assuming that 1000 pieces should be removed and only 920 are produced, and there are 30 reworkings (the reworks are ALWAYS considered waste for the OEE), then we have:

AVAILABILITY = 6 real hrs / 7 theoretical hrs = 86%.

PERFORMANCE = 920 Actual pieces / 1000 theoretical pieces = 92%.

QUALITY = 30 reworks / 920 total pieces = 96%.

OEE = 86% x 92% x 96% = 76%

 

A world class OEE is considered, in general terms, of 85%. In most countries, the OEE is around 60%.

An OEE initiative will always give good results, however, in order to achieve constant and rapid results, the OEE must be read in real time.

 

OEE AND OTHER PERSONALIZED INDICATORS

In some companies, it is common to find performance indicators that were developed internally, or for that type of industry in particular. Some common cases are found in the Beverage, Food and Extraction industry. On some other occasions, the performance indicator does not help team performance, or even measures production parameters and leaves aside the overall performance of the manufacturing plant.

To cite some examples, we found that some companies, their main unit of measure of line performance is an indicator that measure the use of the line, which is something like only the equation of the Availability of the OEE.

Another company that produces metal parts, measures the performance of its production line, weighing the kgs produced of the product. Of course, the staff to improve the indicator produces many pieces of great weight.

In both cases it can be seen that, although the effort to measure the efficiency of the line is correct, it is possible that a more structured indicator is needed that can measure globally the correct production performance.

In this sense, it is highly recommended that these companies reflect on the use of another indicator that can give them more global information on the performance of the equipment or production line. In this case, the OEE has proven to be an effective indicator of performance in a wide variety of industries: Food and Beverage, Automotive, Maquiladoras of all kinds, Consumer Goods, Transformation, etc.

It is common to find resistance in using other indicators, which is completely normal, especially at the Operator and Supervisor levels. The most advisable is to use the indicator to which they are accustomed and combine it with the OEE, and use it for some time while the benefits and weaknesses of both indicators are found, in order to end up with only one.