What is overall equipment efficiency (OEE)?
In your manufacturing environment, you naturally want to ensure the best possible conditions for production. By doing so, you can drive quality across your output, promote consumer safety and lower the costs for your business.
However, an optimised environment doesn’t just happen. Your production line is comprised of many different components, each of which needs to do its jobs effectively. Even a slight issue in one piece of equipment can drastically affect how well your production line performs, leaving you open to the risk of disruption and other problems.
In order to ensure the best conditions across their plant and monitor performance over time, many manufacturers rely on their overall equipment efficiency (OEE). This is a calculated figure that highlights how well the equipment in your plant operates.
All manufacturers aim to get this score as high as possible to get the most from their production lines.
Below, we have explored the definition of OEE, including what role it plays in manufacturing and what you can do to improve yours.
What is OEE?
Overall equipment efficiency is defined as a ‘best practices metric’ that highlights how much of your production time is productive. It takes the various elements of your production processes and asks how effective it is – including the quality of the output, the time taken and the chance of unplanned downtime.
The higher your OEE percentage, the more efficient your production is. If you had a score of 100%, it would mean that all your production was spent creating high-quality products in the minimum time possible and without any disruption. However, no manufacturer will achieve 100%, so a percentage of 85% is considered ‘world class’ – and even this is often seen as out of reach for plants working on a variety of products. The average OEE is 60%, so this is a target that you should aim to surpass.
OEE can be calculated using the following formula:
Availability x Performance x Quality = OEE
In this formula:
- Availability refers to the ratio of your run time (how long production actually took, including stop time) to your planned production and can be worked out by dividing your run time by your scheduled production time. This asks how often the equipment functions when needed.
- Performance is your net run time against your run time. To calculate your net run time, you need to multiply your ideal cycle time (the fastest possible time you can process a cycle) by your total count (the total volume of items produced). You then take this figure and divide it by your actual run time. This asks how much your equipment can make per production cycle.
- Quality refers to the ratio of ‘good products’ compared to your total product. It is worked out by dividing the number of good products from a cycle against the total volume of products created. This asks how much high-quality output, in keeping with your standards, your equipment can generate.
So, if a plant has an availability ratio of 80%, a performance ratio of 90% and a quality ratio of 75%, the calculation would look like this:
80% (0.8) x 95% (0.95) x 75% (0.75) = 57% (0.57)
This means your OEE score would be 57% for the cycle you are analysing.
There are many ways to use OEE to monitor performance. It can be applied to your entire plant or specific shifts, departments, timeframes or lines. Depending on the parameters you are looking to analyse, it’s possible to calculate your score to get a realistic view of how effective that area is.
OEE can also be used as a benchmark or baseline. By using it as a benchmark (a target you want to hit), you can align your processes with industry standards or competitors, or even make sure your different lines and shifts are comparable in terms of efficiency.
Using it as a baseline, you can calculate your OEE over time to analyse how your performance adapts, including tracking against specific goals (such as waste and cost reduction).
To get an accurate score, you must use accurate data, which can be challenging to obtain manually. Fortunately, intelligent solutions on the market can help you monitor and calculate your OEE, making it easier to track through factual data.
What are the advantages of OEE?
By understanding your OEE and taking steps to improve it gradually, you can unlock many rewards for your plant.
Firstly, improving efficiency will enable you to reduce costs by creating a higher volume of quality items in a shorter amount of time. This lowers energy costs by limiting the amount of time your production lines need to run while improving productivity through faster turnaround times. It will also support you in consistently meeting order levels by generating the required number of products, all in line with your specifications and customer expectations.
On top of this, you can reduce waste by ensuring more of your output is high quality and that product giveaway is lowered across your range. Again, this will help you drive down costs while improving your supplies management and lessening your impact on the environment.
The likelihood of costly and damaging product recalls are minimised through an emphasis on quality and equipment that consistently delivers it.
Achieving better OEE will reduce the risk of production issues, including unsafe output (through contamination or other hazards) or unexpected downtime stemming from ineffective equipment.
The ultimate result is a plant that consistently maintains a high level of productivity, generates outstanding output, and manages costs – the holy grail for most manufacturers.
How to improve OEE
Once you have calculated your OEE score, you should determine if there’s room for improvement. If you fall under the industry average of 60%, it’s generally a sign that you need to make a change – but even if you’re above this benchmark, increasing your score can still bring advantages. Below, we have given our top tips for improving OEE.
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Set targets for staff
Even if you tell your workforce that your OEE score needs improving, without context it is unlikely to mean much to them. Your OEE will mean the most when it’s translated into attainable goals that your staff members can work towards.
Start by identifying the areas where work is needed. If a specific part of the ‘Availability x Performance x Quality’ is dragging you down, that’s a good place to begin. Spend time considering what needs to be done and turn it into targets that your employees can meet in their daily work.
Remember to communicate any goals to your staff and appoint the relevant people to work on them. This includes explaining to workers what the impact of their work will be and why it’s essential to your company.
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Utilise compatible equipment
For your equipment to be efficient, it must be compatible with the materials running through it. That’s why it’s essential to craft a production line with a complete understanding of your specifications and select solutions that can achieve the objectives you want.
For example, working with confectionery generally requires machinery with anti-stick surfaces, enhanced hygiene features, delicate handling, and the ability to mix ingredients. If you use equipment that does not tick these boxes, it might result in unplanned downtime, poor quality and other issues that affect your OEE.
If this is the case, you should seek to incorporate better solutions in the production line that account for the requirements of your products and offer the best possible performance in that area. If you’re unsure what this looks like for your plant, it’s worth talking to an equipment provider to see what options they have and how they can tailor it to your needs.
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Introduce data monitoring
When monitoring your OEE and overall performance, utilising data is vital. Without data, it’s tough to get an accurate view of how your production processes are faring and where there is room for improvement. By introducing data collection into your plant, you can gain insight into the various production processes and use this to identify areas of concern.
Aim to find a data monitoring solution that offers sight across your entire production line. A good tool should make it easy to process and understand this data while giving real-time information about your plant so you can take prompt action if an issue arises.
One such solution is Yamato Stats, which was designed to help manufacturers understand their performance better, providing them with the resources to analyse individual lines, shifts and products. The two-way communication works with a wide range of equipment, covering your whole plant and visualising your data into meaningful, clear reports.
With it, you can track your progress over time, ensuring consistent adherence to your targets and continuous improvement. It can also calculate your OEE, making it easier than ever to understand how efficient your plant is.
We also offer a lighter version to calculate OEE, through automated I/O data collection that interfaces with your equipment to tell you where an issue has arisen without manual input. We have recently included a new feature called auditing tracing which helps you to manage traceability across your plant too.
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Set up effective processes
If you want an efficient plant, you need to have processes that work and deliver quality.
Using your product specification, you build a list of tasks that must be completed during the production cycle to ensure your output meets customer expectations and industry standards. Your production processes should then be set up to allow you to fulfil each of those tasks, with the necessary equipment you need to do so.
One example might be the inclusion of product inspection. Incorporating such processes is essential in generating an end product that meets quality guidelines and is free from contamination or other issues, therefore driving customer satisfaction. For efficiency, you need to identify appropriate equipment that works with your materials and implement inspection at a suitable production stage.
Remember, your OEE is only measured by your line’s ability to do the tasks you set. You must therefore make sure you have the right blueprint in place to understand what ‘total’ efficiency looks like across your production line – then you can focus on optimising the conditions to make sure the appropriate actions are undertaken effectively, in the minimum amount of time and delivering high-quality output every time.
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Introduce a maintenance schedule
Another key factor that will affect your OEE score is how often you maintain your machinery. Over time, equipment can be subject to wear and tear, which can worsen and eventually require repair, in addition to recalibration issues. If left unaddressed, these issues will cause your equipment to perform less effectively and may even result in unexpected downtime due to breakdowns or other major faults.
By regularly maintaining your machinery and carrying out repair or replacements where needed, you will keep your production line in good working order, increasing the chances of efficiency and optimising conditions. This will also reduce the risk of downtime and any associated costs and waste.
If you do not have the internal resource to carry out maintenance regularly, it’s worth considering a service contract as this will enable you to stay on top of issues by being proactive, as well as a good stock of spare parts.
In summary
Overall equipment efficiency is an important guideline for manufacturers to consider in the performance of their production line and to continue to monitor it long-term. While nobody will ever have a score of 100%, it does provide a target to work towards as plants seek to access the best results from their production.
Another advantage of OEE is that it encourages manufacturers to understand their production data. With this, plants will understand better their performance metrics and where issues need to be addressed. This helps to create a culture of continuous improvement.
By taking the time to calculate your OEE and improve it, you will also unleash a myriad of benefits for your business, including reduced costs and waste, better productivity and a higher quality of output that consistently meets customer expectations.
With a data monitoring tool, such as Yamato Stats or our lighter I/O software, it’s simple to calculate and track your OEE. This will help you stay on top of your production efficiency and analyse it under your chosen parameters while flagging issues and allowing you to take the necessary action.
We work with you to build a production line that is fully compatible with your products and their specifications, enabling you to create optimised conditions to meet your goals.
Get in touch with us today to discuss how we can improve your plant’s efficiency.