What is Overall Equipment Effectiveness?

Learn more about Overall Equipment Effectiveness

What is Overall Equipment Effectiveness?

What are the Origins of Overall Equipment Effectiveness?

OEE or Overall Equipment Effectiveness originated from the Total Productive Maintenance (TPM) movement in the early 80’s and was first referenced by Seiichi Nakajima’s book “TPM tenkai” (1982, JIPM Tokyo). The intention of OEE is that any machine in any plant around the world can be measured by the same standard. This concept took some time before being used in North America, but started to gain momentum in the late 90’s and early 2000’s with the creation of the OEE Foundation which created the OEE industry standard and have been administering and revising it since 2003. Currently, measuring OEE has become a very important part of many companies lean management process.

Overall Equipment Effectiveness Calculation

OEE is calculated by answering 3 simple questions:

Is my equipment running?
How fast is my equipment running?
I am producing product to specification?
Therefore OEE = Availability x Performance x Quality


Availability = Availability is a percentage of how much time the machine was producing product when it should have been producing product. This calculation does not consider the speed at which the machine is running or is the machine is producing bad product. Instead, availability is affected by unplanned downtime, planned downtime and setup time. Some companies choose to exclude planned downtime or setup time from their OEE calculation, but in my opinion that provides score that does not represent the true availability of your equipment and hides many opportunities for improvement. I do agree however that you should only measure availability of your equipment during the time you have demand for it.

Performance = Performance is a percentage of the maximum speed that a machine can run to produce a product. This can pose some problems when calculating OEE based on the maximum speed that the machine can run, versus the maximum speed that a part can be produced. An example of this would be in the food packaging industry where certain films need to be run slower than others in order to achieve the desired quality, it wouldn’t be accurate to measure these 2 types of film against the same standard.

Quality = Quality is a percentage of the parts produced that meet specification. Unlike Availability and Performance which lead to a lot of internal debate, Quality is pretty simple.

How do you calculate OEE?

See below for an example of how to calculate OEE:

The ideal production rate of part A = 100 parts / hour

The ideal production rate of part B = 200 parts / hour

Machine 1 – producing part A:

Production rate = 85 parts / hour
Lot run time = 7 hours
Lot setup time = 0.5 hours
Scrapped parts = 10
OEE =(7 hours/7.5 hours) x {(85 part/ hour) / (100 parts / hour)} x {(85*7-10)/(85*7-10)}

OEE = 93% x 85% x 98%

OEE = 77.5%

Machine 2 – producing part B:

Production rate = 150 parts / hour
Lot run time = 10 hours
Lot setup time = 1 hour
Scrapped parts = 25
OEE =(10 hours/11 hours) x {(150 part/ hour) / (200 parts / hour)} x {(150*10-20)/(150*10)}

OEE = 91% x 75% x 98%

OEE = 66.9%

In the example above, machine 2 is actually producing more parts than machine 1, but because it was only producing at 75% of the ideal rate, it has a lower OEE.

What are the benefits of Calculating OEE?

Simply put OEE should be used as a lean management tool to help you prioritize your improvement effort. Don’t just calculate OEE to calculate OEE, use it to prioritize and confirm your improvement effort.

How can ShopFloorConnect help me calculate OEE?

ShopFloorConnect is different than other OEE software solutions in that it is designed to connect to any equipment or machine. One of the problems encountered in the industry is that connection OEE software to a machine typically turn into engineering projects, which can be very challenging when companies have different machines.

A ShopFloorConnect Machine Interface is installed on each machine in your facility. The Machine Interface features a touch-screen display that allows the machine operator to select downtime reasons and enter data. With just a few connections to the machine controller, the SFC Interface can detect when the machine is running, count cycles or parts (where applicable), and inhibit machine operation after a stoppage until the operator specifies a downtime reason.

The Machine Interface communicates over your existing Ethernet to the ShopFloorConnect software running on your server. ShopFloorConnect constantly polls the machines, and logs all machine time into one of five different categories or “states”:

  • Running: Running time is logged as ‘Uptime”, and means the machine is operating and making parts.How does ShopFloorConnect know why my equipment is down?
  • Idle: The Idle state indicates that the machine has stopped, but ShopFloorConnect does not (yet) know why. Idle time is converted to downtime or changeover when the machine operator selects a downtime reason. When OEE is calculated, any unconverted Idle time it treated as Unplanned Downtime.
  • Unplanned Downtime: The machine is stopped, the reason for the stoppage has been reported to ShopFloorConnect, and the reason had been previously assigned to the Unplanned downtime state. Unplanned downtime reduces the OEE “Availability” percentage.
  • Planned Downtime: The machine is stopped, the reason for the stoppage has been reported to ShopFloorConnect, and the reason had been previously assigned to the Planned Downtime state. Planned downtime DOES NOT reduce the OEE “Availability” percentage.
  • Changeover: The machine is stopped, the reason for the stoppage has been reported to ShopFloorConnect, and the reason had been previously assigned to the Changeover (Setup)state. For OEE purposes, Changeover can be logged as either planned or unplanned downtime at the user’s discretion.

How does ShopFloorConnect know why my machines are down?

ShopFloorConnect allows you to create a list of downtime reasons specific to each machine.   The list is sent down to the ShopFloorConnect Machine Interface (SMI) and appears as the Downtime menu at the machine.   When a running machine stops, the SMI instantaneously detects the transition, and changes the state from ‘Running” to “Idle”.   If the operator immediately restarts the machine, the brief stoppage will be recorded as Idle time.   If the stoppage lasts for longer than a user-selectable time period (usually one minute), the SMI will pop up the downtime menu and inhibit further machine operation until the operator selects an appropriate downtime reason.   Once the downtime reason is selected, ShopFloorConnect will ‘backfill’ the previous idle time with the unplanned downtime reason. The unique nature of ShopFloorConnect’s SMI properly captures downtime reasons in a way not possible with other solutions.

Can ShopFloorConnect help reduce my downtime?

By showing the status of all your machines, ShopFloorConnect will calculate OEE and help you prioritize your improvement effort. However, one feature of ShopFloorConnect is that it can also alert anybody in your company when a certain downtime type has been allocated to a machine. For example many companies need to have inspectors do a first off inspection before the operator runs the full batch. By setting up a text alert in the system, your inspectors would receive a text as soon as any machine is waiting for a first off, which will significantly reduce your downtime.

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