Overall Equipment Effectiveness (OEE)

OEE BreakdownTakeaway: Overall Equipment Effectiveness (OEE) is a popular metric which can be used to measure how well companies use equipment. OEE is used to drive up performance and reduce equipment-related issues.

Maximizing equipment use is important to many businesses. We deal with limited resources. It is important to know equipment is in good condition and reliable. OEE was developed for manufacturing equipment, but is used for measuring performance of any type machinery. The term overall equipment effectiveness was coined by Seiichi Nakajima in the 1960s. He developed it as a measurement for process improvements.

There is always a need to measure and quantify equipment effectiveness. What has made OEE so popular is its ability to be used to measure and drive improvement efforts across many types of environments; manufacturing, construction, and any process that uses equipment. This flexibility in use has made OEE a popular key performance indicator.


Three Characteristics of All Equipment

OEE separates measurements into three characteristics:

  1. Availability
  2. Performance
  3. Quality

Availability: When or how often, do you lose total availability of your equipment? Also known as Equipment Downtime.  How long are your set-ups? Does your equipment break down frequently?

What takes your equipment out of availability? This means capturing all activities, and events that keep equipment from use: set up time, maintenance, changeovers, breakdowns, etc. This time may be scheduled (maintenance, set-ups, etc.) or unscheduled (breakdowns) We need to capture all times when the equipment is not available for use.

Performance: Does your equipment start and stop a lot? Does your equipment run at 100% of its designed speed?

This attribute measures how effective equipment is while it is in use. How reliable is it? We need to be able to trust we can use it when it is needed. When equipment is scheduled to be used, we need the confidence of knowing it is reliable and will meet our needs today.

Time is money and we do not want to waste time performing unscheduled repairs on forklifts, heavy equipment, or any machinery.

Quality: Do you manufacture quality products? Are your processes repeatable? Is work done right the first time? All equipment is designed to perform a task. How well does your equipment perform these tasks?

We need quality control in all that we do. If I am running a front-end loader, a bobcat, or power tools, I need to know all components are working like new. We do not want extra time and effort spent making up for equipment problems. We don’t want to do work, before we can do work.


Six Big Losses

When we look at the three characteristics of availability, performance and quality, we can identify six types of losses associated with them:


Setups and Adjustments: How much time is spent setting up and adjusting equipment before it can be used? This includes time spent swapping out tools. This can be time consuming and labor intensive. We need to capture time spent preparing equipment for use.

Breakdowns: How often does equipment breakdown? Is it acceptable for equipment to breakdown? We need reliability and this means setting a goal of zero breakdowns. We want full control of equipment as it is scheduled for use.

Idling and Minor Stoppages: Look at these as minor hiccups. How often is equipment down or idling as operators wait for information, materials, tools, or parts? This can be the biggest cause of lost equipment use.

Reduced Speed: This occurs when equipment is worn and prone to vibration or breaking down if not handled with extra care. We may need to stop often to keep equipment from overheating or run at a reduced rate to control vibration caused by worn parts.

Startups: In many operations (primarily manufacturing or any processes use of complex equipment with touchy setups) there are losses as equipment is warmed up and dialed in. We want to minimize these losses as much as possible.

Defects and Rework: This may be the easiest loss to understand and recognize. We want zero defects and no time wasted in rework activities. Let’s “get-r-done” on the first try.

For each of the six major losses, we have set goals:


Data Collecting and Maintenance

We need accurate data on all measurements in regards to OEE. Create a framework for collecting OEE data. We want data collecting to be easy and intuitive. For each piece of equipment, make use of logbooks, check sheets, etc.  For the best results, make use of electronic forms.

Mobile devices are great for this. Information can be quickly recorded on tablets or smartphones. Electronic forms can be designed to capture all needed information. Calculations are easily done for us. Cloud storage and retrieval make it a snap to obtain what is needed with the push of a button and easily shared.

Pictures can be taken with tablets or smartphones as part of detailed reporting and clarification.

We need good data to drive improvements in a proactive manner. We want to capture information as it relates to equipment downtime and use, such as recording when a part is changed-out. What is the failure rate and time for changing the part? We can’t improve these factors until we start tracking them. We need predictability and control.

Once we have good tracking of equipment use and maintenance, we can drive improvements in regards to them. I have seen tremendous improvements in equipment reliability and less parts failures due to improved lubrication efforts alone. Improper lubrication and contamination is one of the main reasons for equipment failures.  Proper pre-trip inspections are a great way to get a handle on this issue before it starts.


Calculating OEE

The six-step process for calculating Overall Equipment Effectiveness (OEE) and developing & implementing an improvement plan is as follows:

    1. Collect OEE data
    2. Analyze OEE data
    3. Prioritize what needs to be improved
    4. Find the root cause of the equipment losses
    5. Implement to improve
    6. Verify countermeasures

OEE3There is much in today’s business world we can’t control. Equipment reliability should not be part of that world. By making use of good data collecting and OEE, we can improve equipment use and reliability. Don’t let your equipment rob your business of time, money, and possibly clients.

We can manage what we measure and control. This includes equipment use.