OEE: Overall Equipment Effectiveness [Full Guide with Formula]

By | October 7, 2018

What is Overall equipment effectiveness (OEE)?

As also mentioned above OEE stands for Overall Equipment Effectiveness.

OEE is a technique which is used to measure overall performance of a plant (Manufacturing industry or factory).

With the help of this single metric a person can get an exact idea of quality of product manufactured, working condition of machines used to manufacture product and the availability of system and machines required for production.

Difficult to understand!!!

Let’s make it simple

OEE is the product (Mathematical) of three key metrics, and they are

  1. Availability
  2. Quality
  3. Performance

What is availability?

Availability is the metric which tells us the percentage of time for which the machine was available for production.

For example:

If we have total available production time of 10 hours but due to some reasons the machines were under breakdown for two hours. It means that finally we had only eight hours for production.

Hence the availability of the system will be

Formula of availability

Availability = (Actual time for which machines were available for production / Total time allotted for production) *100

So, in our case availability will be

= (8/10) *100

= 80%

What is quality?

Quality is the metric which tells us the percentage of total products manufactured which are quality products.

For example:

In a shift we have manufactured 100 products but according to the set quality standards only 90 products are good than the quality of our production will be 90%.

Formula of Quality

Quality = (Number of good products manufactured/ total number of products manufactured) * 100

What is performance?

Performance is the metric which tells us the ability of our system to do production when machines are available and ready for production.

For example:

Let’s say a machine makes 100 products in running condition in one hour but due to minor stoppage (not due to any breakdown in machine) the machine has manufactured only 70 products. Than the performance of the system will be 70%.

Formula of performance

Performance = (Actual number of products made in given time / Theoretical number of products that should be made in given time) * 100

Now when we are well versed with availability, performance and quality, we should move on to OEE.

Formula of OEE

OEE = Availability * Quality * Performance

Note: We have to convert all the three metrics in decimal points by dividing them by hundred and then multiply the overall result by hundred.

In our given examples we can see that we have

Availability = 80%

Quality = 90%

Performance = 70%

Hence according to our formula OEE is

OEE = 0.8*0.9*0.7*100

= 50.4%

How to improve OEE?

There are several ways by which you can improve your plant OEE. Some of them are.

  • Do preventive maintenance of machines so that the availability will be more
  • Try to make good quality product in the single run of machine
  • Avoid minor stoppages of machines
  • Decrease MTTR (Mean Time to Repair)
  • Increase MTBF (Mean Time Between Failures)
  • Try to do kaizens where required
  • Implement TPM and 5S in your factory

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