This article is about:
- What is OEE?
- How is the OEE calculated?
- Which factors are included in the calculation of the OEE?
- Why OEE?
- How is OEE used in practice?
- What is a good OEE value?
- What are the common errors in calculating the OEE?
- Which software is used to calculate the OEE?
- Our customers’ experiences with OEE software
- Conclusion
What Is OEE?
OEE Definition: The Overall Equipment Effectiveness
OEE definition: Overall equipment effectiveness (OEE) is a key figure used to evaluate the productivity of a machine, plant or line. This allows all equipment losses, i.e. potential, to be systematically identified, analyzed and then eliminated. However, many manufacturing companies do not yet measure productivity systematically. Often, the number of pieces produced in relation to the time required serves as an indirect productivity indicator.
The OEE value is calculated as the product of availability, performance and quality. When calculating the OEE value, the losses due to unplanned downtime, deviations from the planned number of units, and defective parts and parts that have to be reworked are thus included. Availability measures the operating time of the plant in relation to the planned production time. Performance assesses whether the plant is operating at the maximum possible speed. Quality records the proportion of flawless parts produced.
How is the OEE calculated?
The formula for calculating the OEE (Overall Equipment Effectiveness) is simple: the OEE value is the product of availability, performance and quality. The calculation thus includes the losses due to unplanned downtime, deviations from the planned number of units, and defective parts and parts that need to be reworked. The formula is:
This allows you to easily and accurately evaluate the effectiveness of your production equipment.
Calculating productivity helps you identify inefficient processes and opportunities for improvement, enabling you to optimize the overall performance of your production. An OEE value of 100% means that a plant only produces high-quality products as quickly as possible without downtime. However, this is hardly achievable in practice. Values between 60% and 85% are considered acceptable and show that there is still room for improvement.
High-quality data is a prerequisite for determining the OEE key figure. This data can be digitally recorded and reported using OEE software. On this basis, companies can automatically calculate productivity, identify optimization potential and implement measures.
Which factors are included in the calculation of OEE?
Three factors are crucial for calculating the OEE: availability, performance and quality. The quality factor expresses the proportion of qualitatively satisfactory units in relation to the total number of items produced. The performance factor shows the efficiency of a plant or machine in comparison to its maximum performance. The availability factor indicates how long a machine or plant is actually in operation compared to the planned operating time. The three factors are presented in detail below.
OEE Quality Factor
The quality factor measures the proportion of units produced that meet quality standards, relative to the total number of units produced. A high quality factor indicates that your production is operating efficiently and producing few rejects. Process errors that cause scrap and rework minimize the quality factor, as does reduced output caused by start-up losses during production start-up. This results in the following calculation formula:
To calculate the quality factor, divide the number of well-produced units by the total number of units produced and multiply the result by 100 to get a percentage.
For example, if you have 950 good units out of a total of 1,000 produced, your quality factor is 95%. A high quality factor contributes significantly to optimizing your overall equipment effectiveness and helps to reduce production costs.
An understanding of the quality factor is essential to identify weak points in your production process and enable continuous improvement.
OEE Performance Factor
The performance factor is also an important part of the OEE calculation (Overall Equipment Effectiveness). It shows how efficiently a system or machine is working compared to its maximum performance. The performance factor is the ratio of the actual number of parts produced to the technically possible number of parts per unit of time.
A system, machine or line cannot always be operated at the highest speed according to the manufacturer’s specifications. The cycle times depend, among other things, on the manufacturing processes, the products to be processed and also the operating personnel. Idle times and minor interruptions as well as reduced operating speeds can all lead to a lower performance factor. The following formula is used for calculation:
The performance factor is calculated by dividing the actual quantity produced by the theoretically possible production quantity. A high performance factor means that the plant is working efficiently and that production targets are being met. A low performance factor can indicate a variety of problems, such as slow operating speed or inefficient processes. It is important to identify and correct these problems in order to improve the overall performance of the plant.
OEE Availability Factor
The availability factor also plays an important role in calculating OEE (Overall Equipment Effectiveness). It is calculated as the ratio of actual and theoretically possible production time. Availability is reduced by malfunctions and the time required to rectify them. Preparation and follow-up of a plant, machine or line also reduce the availability factor. This results in the following calculation formula:
To calculate the availability factor, divide the actual operating time by the planned operating time and multiply the result by 100 to get a percentage.
For example, if a machine was scheduled for 8 hours but was only actually in operation for 6 hours, the availability factor is (6/8)*100 = 75%. A high availability factor indicates that the machine is often ready for use and has few unplanned stoppages.
Availability is crucial because it directly affects the productivity and efficiency of your production. By regularly monitoring and optimizing availability, you can improve OEE and thus increase the overall performance of your operating equipment.
High OEE Indicates Efficiency and Little Waste
By combining these three factors, the OEE provides a comprehensive insight into the efficiency and effectiveness of your production processes. A high OEE means that your plant is working efficiently and producing little waste.
OEE is thus a kind of speedometer for production management. Behind these figures are facts – collected information about all processes and faults that are stored in a database. It becomes clear where optimization is necessary and useful. And the success or failure of implemented measures can be seen immediately. OEE enables an analysis of the potential of production. As a control instrument, it can be used to monitor individual machines, complex systems or the entire factory in real time.
The OEE indicator is highly beneficial for manufacturing companies in various industries. By revealing sources of error, disruptions can be avoided, leading to higher productivity while keeping operating costs the same.
Lars Knitter, Head of Sales & Marketing, Authorized Representative at FASTEC
Why OEE?
After defining the OEE, you might ask yourself: What is the point of all this – how does it benefit my company? The answer is this: Time and costs are the decisive factors for the success of a manufacturing company. However, many companies are hardly aware of the optimization potential in production. If they were aware of the margins they are losing as a result, they would immediately make production optimization a top priority.
The reason for this inaction is a lack of transparency in production. The figures available there often do not allow any conclusions to be drawn about the existing potential. In many manufacturing companies, productivity is not yet measured consistently and systematically. Often, the quantities produced serve as indirect productivity indicators. If a certain quantity is achieved per shift, for example, production has run satisfactorily; if not, it is less acceptable.
OEE Software Provides Necessary Data
However, producing based on gut feeling is not a good method, because gut feeling is only suitable for comparison: if things go as you are used to, they go well. If things go differently than you are used to, you rate them as less good. A digital data acquisition software provides the necessary material here.
You can only improve what you can measure. In production, the OEE indicator comes into play here: also known as OEE (overall equipment effectiveness), it assesses productivity in manufacturing companies. The transparency it provides enables a faster response to unforeseen events, such as malfunctions. With the help of OEE, a company’s productivity can be increased without incurring major costs; OEE can therefore significantly contribute to increasing margins. More output in the same time at the same operating costs, as well as less unrest and stress in production due to fewer disruptions, are worthwhile and thus motivating incentives.
High-quality data is a prerequisite for determining the OEE key figure. This data can be digitally recorded and evaluated with little effort using a software solution.
Higher Productivity Means:
- Lower labor and machine hour costs due to reduced job times
- More output per shift
- Fewer disruptions – smoother processes reduce unrest and chaos
How Is OEE Used in Practice?
In manufacturing, calculating Overall Equipment Effectiveness (OEE) is an important factor in optimizing operations. Your production line consists of various machines, all of which must function efficiently and smoothly in order to achieve production targets. This is where OEE calculation comes into play.
As explained earlier, the OEE is made up of three main components: availability, performance and quality. If one of your machines is unavailable due to maintenance, availability drops. If the machine is operating slower than the planned speed, the performance rate will suffer. The quality rate will suffer if defective parts are produced.
By regularly monitoring and calculating the OEE, you can quickly identify weak points and take measures to improve them. This not only increases efficiency, but also your company’s competitiveness.
The OEE takes a holistic view of equipment productivity. Based on the data collected, optimization measures can be implemented that lead to increased productivity. After just a few weeks, the data is reliable and provides transparency.
Examples from Practice
There are numerous practical examples and use cases for calculating OEE. Imagine a production line in a factory that manufactures cars. The OEE calculation helps you to evaluate the efficiency of this line. If the machines often break down, the availability rate decreases. If the machines work slower than the intended speed, the performance rate decreases. And if many defective cars are produced, the quality rate suffers.
By regularly applying the OEE indicator, you can not only increase productivity, but also reduce maintenance costs and improve the overall quality of your products. Here are two real-life examples from FASTEC customers in which recording the OEE value has proven useful.
OEE in the Pharmaceutical Industry
A pharmaceutical manufacturing company wanted to test whether OEE recording made sense and used a software solution to do so. After a good two weeks, the production manager reported that productivity on this line had doubled. The reason for this increase was the recording of short shutdowns. These line malfunctions describe downtimes of less than two minutes. The insight into the effect of the sum of the many short shutdowns on the total shift time was enormous. Although it was already known that the line stops frequently, the actual quantity was surprising. The service technicians of the plant manufacturer analyzed and then eliminated the causes. This enabled the company to avoid expensive losses in the long term.
OEE in the Food Industry
In a meat processing company, the OEE analysis showed that the existing three slicers were the bottleneck in production. The company then replaced them with a new, more powerful slicer, which also led to a sustainable increase in productivity.
What Is a Good OEE Value?
The OEE Institute describes that the ideal OEE value is 100%. However, this is only achievable in the short term and cannot be maintained over time. This would mean that a plant only produces parts of high quality, runs at maximum speed and never fails.
A good OEE value, on the other hand, is 85% or higher. This means that your production plant is working efficiently and little time is lost due to breakdowns, speed reductions or quality problems. In principle, the value in each company should be treated individually. When interpreting the result, the individual circumstances of the company should be taken into account.
Values between 60% and 85% are considered acceptable and show that there is still room for improvement. Values below 60% indicate that optimization is necessary.
Tips for Optimizing Your OEE Values
There are several effective approaches to optimizing your OEE values:
- Software for digital data acquisition: High-quality data is a prerequisite for determining the OEE key figure. This data can be digitally recorded and evaluated with little effort using OEE software.
- Analyze reasons for malfunctions: A software solution also supports you in analyzing faults in your production. You automatically record reasons for malfunctions and can use this knowledge to make optimizations and increase your OEE.
- Process monitoring: Use a software solution to track production processes in real time. This enables you to react quickly to deviations and ensure quality.
- Continuous improvement: Implement strategies such as Kaizen or lean management to promote continuous improvement and reduce waste.
- Planned maintenance: Schedule regular maintenance to minimize unexpected breakdowns. Maintenance increases the availability of your machines.
- Training: Invest in training for your employees. Well-trained personnel can make production processes more efficient and reduce errors, which in turn increases performance.
By taking these measures, you can improve your OEE values in the long term and thus increase the efficiency of your production. Once the OEE value has been calculated, you should implement measures to optimize the key figure based on the result. Only in this way can you ensure a sustainable improvement in your production.
What Are Some Common Mistakes in Calculating OEE?
The following errors often occur when calculating OEE (Overall Equipment Effectiveness):
- Incomplete data acquisition: If not all relevant data on availability, performance and quality are recorded, the calculation may be inaccurate.
- Wrong time base: Choosing the wrong time base, e.g. shift times instead of actual operating times, can distort the OEE key figure.
- Unclear definitions: Different definitions for downtime or production stops lead to inconsistent results.
- Microstops not considered: Small but frequent stops are often overlooked, although they have a significant impact.
- Lack of root cause analysis: A pure calculation without a root cause analysis of the losses does not provide any starting points for improvement.
Avoid these errors to obtain a precise and useful OEE key figure. A software for digital data acquisition will help you to do this.
Which Software to Calculate OEE?
A prerequisite for calculating OEE is high-quality data. Companies collect this data digitally using a software solution. A Manufacturing Execution System (MES) is a production software for the manufacturing industry. The OEE software applies tasks in the area of data acquisition. With an MES, machine and operating data in a company can be collected digitally for the purpose of optimizing production. This includes information on throughput times, machine statuses, reasons for malfunctions and durations. Automatically, the OEE is calculated. The report of this data provides insights into error potentials in the production process and opens up the possibility of detecting faults in real time and implementing targeted optimizations in the long term.
With FASTEC’s MES, FASTEC 4 PRO, you can monitor and control your production plants, machines and workflows in real time. You collect data directly from the production lines, enable precise planning and analysis of production processes, and thus support decision-making in your company.
Easy Start with OEE Data Acquisition
FASTEC has developed smartOEE to enable potential analysis and optimization of production with little effort. It has a hybrid architecture of cloud and edge and facilitates the entry into the digitalization of production with an MES. smartOEE is a “turnkey” system that companies can use directly after simple installation and activation (plug & play). The flexible monthly rental option enables a quick and cost-effective entry into the digital factory. Production data is collected and can be analyzed directly in the cloud. By automatically calculating the OEE, companies can identify optimization measures and increase the productivity of their production. By using the cloud, the data is always available and can be used. By integrating OEE software into their production processes, companies can calculate and increase their productivity.
Anyone who purchases smartOEE also gets six standardized dashboards for free. These enable various production reports at a glance. With the help of the visualizations, companies can quickly identify weak points, implement targeted improvements and capture various KPIs such as Overall Equipment Effectiveness (OEE).
Two OEE dashboards provide insights into productivity and efficiency in production. The OEE comparison allows users to compare different points in time and relate them to each other. The OEE report dashboard provides detailed insights into production performance, quality and availability. Users can share the dashboards with other employees at the push of a button, eliminating the need to send individual reports.
Utilization of the Results of the Potential Analysis Is Crucial.
However, calculating the OEE and recognizing the potential of a production process alone is not enough. How it is handled in the further course is crucial. CIP is the keyword here: continuous improvement process. The biggest challenge is to maintain continuity. Once a company has finally decided to implement an MES, another requirement is to educate the production staff about the purpose and benefits. Training ensures that the required data is recorded correctly.
Trained lean managers who use the MES and calculate the OEE daily as part of the CIP contribute significantly to the success of the project. Their responsibilities include analyzing the OEE key figure, deriving measures from it and ensuring successful implementation. In this way, they achieve lasting improvements. For a lean team or the Operational Excellence (OPEX) department, OEE recording thus provides a suitable basis.
Our Customers' Experiences with OEE Software
Some companies have already successfully optimized the OEE (Overall Equipment Effectiveness) in their production by using FASTEC’s OEE software. Here you will find user reports from a wide range of FASTEC customers:
Conclusion
Calculating overall equipment effectiveness (OEE) is a crucial tool for measuring the productivity and efficiency of production facilities. OEE consists of three main factors: availability, performance and quality. Each of these factors is measured separately and then multiplied to obtain the OEE. A high OEE indicates that a plant is operating efficiently and with little waste.
Examples from the field show that if companies succeed in identifying the potential of their production and implementing optimizations, they can increase productivity and minimize costs. For example, the pharmaceutical company Sartorius saved 300,000 euros in one year by reducing its scrap. The Medice Health Family, a manufacturer of pharmaceuticals and medical products, was able to achieve a 20% increase in OEE within 12 months.
The OEE calculation provides a clear and precise method for evaluating the productivity of your production facilities. By regularly monitoring and analyzing the OEE values, you can identify weak points and make targeted improvements. In the long term, this leads to an increase in production efficiency and a reduction in failures and rejects. A thorough OEE analysis is therefore essential for any company that wants to optimize its production processes.
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