OEE: learn about this indicator of efficiency in industries

Have you ever noticed that in factories around the world, there's always talk of some kind of OEE? It's kind of the main star when it comes to measuring production performance. But do we really know what OEE is and how to use it to boost factory performance? Let's dig a little deeper into this subject and discover the tricks of this indicator!

OEE, which stands for Overall Equipment Effectiveness, was born with the intention of helping 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, plant or individual station.

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

Of course, it 's not enough just to have the OEE up your sleeve and wait for the magic to happen. Implementing it properly is a process that requires organization and having an aligned team is crucial. You have to have the right data in 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 referred to as the "hidden factory". It shows where we are missing production opportunities with the resources we have available.

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

The interesting thing about this indicator is that it focuses on the critical areas of lost productivity, 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 calculate this OEE? Well, OEE is the result of multiplying three parts: availability, performance and quality. I'll explain what each one means and how to calculate it:

Availability

‍Thisis how long the machine or production line was available to work as planned, without any unscheduled stops. To calculate this, we look at the total time the machine or line was supposed to be working and subtract the time it was stopped for some reason. The reasons can be planned or unplanned stoppages: explain the planned ones, which are missing from the text.

Unplanned downtime is when the machine stops unexpectedly, without us having planned it. It could be due to equipment breakdown, lack of operators or even lack of material. Planned stoppages, on the other hand, are those that we knew would happen beforehand, such as maintenance, adjusting a tool or even cleaning the machine.

It's important to remember that the list of reasons for downtime can vary depending on the type of production and the company. But a good way to get started is to write down the most common causes of downtime.

And there's one more thing: stoppages that have already been scheduled, such as major planned maintenance (like those at the end of the year, for example) or refurbishments, are not counted as a loss of availability. Nor do we count when a lack of demand or seasonality means that we have to close some complete shifts beforehand, which ends up leaving the machine without a production schedule. These are excluded from the OEE calculation. On the other hand, setup times and waiting for other sectors to produce are accounted for

Performance

‍Herewe are looking at the actual speed of the machine or production line compared to the speed that has been predicted. This predicted speed, sometimes called the "maximum demonstrated rate" (MDR) or "ideal cycle time", represents the maximum that the machine should be able to produce.

The performance shows how much the machine actually yielded during the time it was running, compared to the maximum it could have yielded 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 solve the problem quickly. However, these stops can be so frequent that their impact can go unnoticed. Examples include feed failures, material jams, misconfigurations and even quick clean-ups that need to be done occasionally.

Slow cycles: These are times when the machine runs slower than the expected speed. This can be caused by various reasons, such as the machine being dirty or worn out, inadequate lubrication, inferior material or incorrect settings. Human factors, such as the operators' lack of training or experience, can also influence this.

Quality

‍Thethird aspect of OEE focuses on the quality of the products manufactured. In simple terms, quality refers to the percentage of products that leave the production line according to the customer's 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, i.e. when the line is running smoothly. These defects can be corrected through rework. For example, products with incorrect weights, labeling problems, chemical or physical non-conformities and damaged packaging.

Initial rejects: 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 equipment starts operating. Examples include non-standard products, 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 put all this together in a formula, we've created the example below so that you can better understand and calculate your OEE. Take a look:

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Importantly, each of these pillars of the OEE calculation has some common mistakes that we must be careful not to miscalculate, distorting the indicator.

See examples below:

Availability:

Availability is an area where many challenges arise when calculating OEE. A common mistake is to exclude too much downtime from the OEE calculation.

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

Performance:

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

One way to solve 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 reference based on records of the fastest changes. Periodically adjusting cycle times based on operator performance can also help improve the accuracy of the calculation.

Quality:

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

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

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

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

Understanding and implementing OEE is key to setting achievable targets and optimizing equipment utilization. Following a successful implementation guide ensures that you are on the right track to achieving your lean manufacturing goals.

Now that we have a better understanding of what OEE is, how can we start implementing it in real time in our company? At NEO, we are experts in this field and have helped companies all over the world reach their full potential. To make this journey even easier, we're offering you 30 free days of our OEE tool, along with the hardware needed to connect to your equipment and transmit the 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 suit your process, simply return the equipment. It's as simple as that, because our mission is to help the industry reach its full potential.

If you're interested, get to know Evocon and request your free 30-day demo. Our team will contact you to organize all the details.