OEE as both a benchmark and a baseline
Overall equipment effectiveness (OEE) is a concept utilized in a lean manufacturing implementation. OEE is becoming a commonly utilized maintenance metric within lean organizations.
Overall equipment effectiveness (OEE) is a term coined by Seiichi Nakajima in the 1960s to evaluate how effectively a manufacturing operation is utilized.
It is based on the Harrington Emerson way of thinking regarding labor efficiency. The results are stated in a generic form which allows comparison between manufacturing units in differing industries.
OEE is useful as both a benchmark and a baseline:
As a benchmark it can be used to compare the performance of a given production asset to industry standards, to similar in-house assets, or to results for different shifts working on the same asset.
As a baseline it can be used to track progress over time in eliminating waste from a given production asset.
Like any other metric, OEE can be used as a club to reprimand or blame people, but it’s really intended to be a yardstick for measuring improvement.
How OEE Works
The OEE calculation rolls the “6 big losses” of TPM into one number that represents the effective operating rate for a piece of equipment or synchronized line — in other words, the percent of time the equipment or line is operating effectively, or its valuable operating time.
That translates to the percentage of product produced compared to what could have been produced in the scheduled time.
The 6 Big Losses
1. Equipment failure (breakdowns)
2. Setup and adjustment
3. Idling and minor stoppages
4. Reduced speed of operation
5. Process defects (scrap, repairs)
6. Reduced yield (from startup to stable production)
The OEE goal
The OEE goal depends on the process, setup times and order quantities.
For example, a machine that produces 10 orders per day with a 30-minute setup time would have 300 minutes reduced from the Availability equation. Conversely, a machine that runs one order all day would only have 30 minutes of setup time. These facts make it difficult to compare two machines’ OEE numbers.
The value is in the analysis and comparison of a machine’s OEE in one period vs. another. The comparison may also become meaningless if the order quantities vary significantly day to day.
