What is overall equipment effectiveness (OEE)?
Overall equipment effectiveness (OEE) is a common benchmark, and in many cases, the gold standard for manufacturing productivity. It identifies the percentage of manufacturing time that is truly productive by measuring availability, performance, and quality.
Are your operations using all available uptime? Are processes running at peak capacity? How much energy is wasted on producing unusable scrap? While OEE isn’t a new concept, it remains a moving target. Manufacturers are increasingly adopting innovative digital solutions to move closer to their ideal OEE goals and beyond.
Why is OEE important? What is OEE used for?
The primary purpose of OEE is to benchmark progress in improving manufacturing productivity. As a measurement of productivity in a factory, many strive for that perfect OEE score of 100%. OEE drives improvement by providing a better understanding of business losses and simplifying production issues. This helps you to make the right business decisions to increase efficiency and trim down operating expenses.
Key areas of OEE
Availability
Availability measures the ratio between the actual runtime and planned production time—a pure measurement of uptime. Any time equipment is not running when it was planned to is an inefficiency that is reflected in OEE availability.
Performance
Performance is the speed at which a factory or line runs as a percentage of its designed speed. OEE performance is not based on the number of units produced, but on what the line was designed to process over a given period of time. If equipment is running slower than its capabilities, then it is not as efficient as it could be, which is reflected in OEE performance.
Quality
Quality is the ratio between good units produced and the total units that were started. This is a measurement of process yield. The inefficiency of out-of-spec units that could have been good units is reflected in OEE quality.
Go beyond OEE
While OEE performance has historically been a common standard for measuring and improving productivity, and a good visibility tool for factory productivity assessment, it doesn’t tell you where the real bottlenecks are or where to focus if you want to improve overall throughput.
A digital performance management solution makes it possible to focus resources on the correct problem through accurate problem identification and prioritization—building on the OEE initiatives you already have in place to improve performance management.
OEE in manufacturing is a critical performance management measurement, however, manufacturers can go beyond OEE and improve their performance management even more. Take OEE improvement and performance to the next level.
Digital performance management differentiators vs. OEE
Closed-loop problem-solving
Bottleneck Analysis
Enterprise Scalability
The impact of improving OEE: By the numbers
With smart planning and the right technology—you can unlock a leaner, more agile factory. Build up workforce and machine efficiency by:
- Remotely monitoring equipment condition and status.
- Delivering predictive alerts to front-line maintenance experts.
- Analyzing operations in-depth, across multiple facilities.
- Empowering and protecting employees with digital work instruction.
What kind of impact can digital solutions really make on your machine efficiency? The following metrics are taken directly from manufacturing customers, reflecting how digital solutions are boosting productivity.
Minimize CAPEX
By using digital solutions to extend asset life, manufacturers can shed up to 15% of their CAPEX expenditures.
Prevent Downtime
Preventative maintenance, and empowering workers can cut up to 50% of unplanned downtime.
Boost Changeover
Accelerating worker efficiency and optimizing production lines can result in up to 70% faster changeover time.
Increase OEE
Changeover, downtime, and CAPEX changes can increase total overall equipment effectiveness by 50%.
Overall Equipment Effectiveness
Changeover, downtime, and CAPEX changes can increase total overall equipment effectiveness by 50%.
Overall equipment effectiveness (OEE) case studies
Future of OEE
While many manufacturing software vendors can offer OEE solutions, many of them still rely on homegrown OEE solutions or niche OEE tools. Without leveraging current OEE solutions with IoT, they are unable to extend visibility into the process, people, and products that bring value to an organization.
OEE has been a valuable indicator of real-time visibility into shop floor productivity, but it falls short of actually being able to pinpoint the root cause of productivity issues. To create an immediate impact on your plant’s P&L statement, you need to know the high-impact issues to focus on. Go beyond OEE and take your organization’s improvement and performance to the next level.
A practical guide to calculating OEE
In manufacturing, the ability to accurately measure machine uptime, efficiency, and effectiveness is critical for an effective IoT implementation.
Adding Value to OEE for Manufacturing
Discover the outcomes of different OEE techniques and learn how they impact your business.
Drive better results with improved efficiency measurements
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Northrop Grumman eliminates bottlenecks
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