• Manufacturing , Metrics and Ratios ,
• 15 Mar

Overall Equipment Effectiveness (OEE) is a utilization metric that looks at how productive manufacturing is during it’s scheduled operation. We look at quality, availability and performance as the 3 parts or categories of this metric.

This is a great metric for gaining insights on improving manufacturing processes,. We can create benchmarks and determine the drivers of waste . In OEE, we refer to waste as losses. A perfect OEE score is 100% with no losses in any of the 3 categories. While 100% may sound like a noble achievement, in reality it is almost impossible. A more pragmatic approach is to benchmark and measure feedback from actions taken  in the manufacturing process

.This term was created by Seiichi Nakajima and is a key concept in the Total Productive Manufacturing methodology. In Lean, this is part of the foundation in which the house of TPS sits.

We will break down OEE into each of it’s 3 components. The details of each component is then explained in detail in each section.

Overall Equipment Effectiveness

Availability

Availability measures both planned and unplanned stops. Unplanned Stops could include equipment failure while planned stops includes changeovers and other planned events. One way to think of Run Time is this is the amount of up-time on the equipment or process producing units.

Performance

Performance looks at pace. Losses here decrease the score from 100% and include slowing down of production or small stops not indicated in Availability.

Quality

Quality counts defects and rework as a percentage of all product produced. A 100% value indicates that their are no defects in items  and no rework. Only good, usable parts are produced the first time. You can interchange Product with Parts. Just make sure that you are measuring the same thing in each of the 3 big categories.

Other Considerations

If you are not familiar with manufacturing, this may feel pretty abstract at first and that’s ok. The overall concept is that we have a metric for understanding the quality and performance of our manufacturing process.

This is also measures stress testing where we see how resilient the manufacturing process is and assess risk.  Volatility in this metric over time may indicate that the process is fragile in certain situations, but may handle other tough situations well. You really don’t know until you measure and communicate it!