OEE (Overall Equipment Effectiveness) is really the pinnacle when it comes to measuring manufacturing efficiency. Productivity remains an important metric, but in the pursuit of excellence, OEE considers more factors. So how do they differ?
Productivity is a key term in the workplace and can be considered as a measure of the output of individuals or teams. It is important because it reflects how a business is performing: the greater the output (goods and services) with less input (materials, labour and capital) the higher the productivity over a defined period of time.
Let’s look at what can influence productivity in manufacturing. Firstly, there’s the equipment used, how up to date it is, but more importantly, how well maintained. Secondly, employees, their skills and knowledge gained through experience and training and, thirdly, technology. For example the use of smart sensors and specialist equipment to monitor machinery and track where and when breakdowns occur, as well as using data to help prevent such occurrences. Optimising these factors will almost certainly benefit productivity, but then we come to OEE which takes this all a step further by focusing and measuring how much production time is actually productive.
If we consider productivity measures output, then OEE assesses the true productivity of manufacturing time and is calculated using the formula A x P x Q = OEE where:
- A = Availability: this refers to how long a machine is operational, excluding downtime that needs investigation and monitoring.
- P = Performance: this accounts for anything which prevents the manufacturing process from running at full speed.
- Q = Quality: this represents parts that do not meet quality standards, including those which require reworking.
According to Vorne, most manufacturing companies have an OEE score of about 60%. Probably unsurprisingly there are more companies with scores below 45% than those above 85%. However, rather than fixating on the score itself, the recommendation is to focus on how to improve it, an approach which aligns well with the Continuous Improvement requirement for ISO 9001:2015.
OEE is a comprehensive metric that provides a clear picture of how effectively a manufacturing operation is running. By measuring the variables of availability, performance and quality, losses and areas for improvement can be identified. Improving OEE, though, does require a systematic approach. To increase availability, start by identifying the main sources of downtime and addressing these. Next, focus on optimising machine performance by reducing minor stops and reductions line speed. Finally, enhance quality by implementing rigorous quality control measures to minimise defects and rework.
Continuously monitoring and improving OEE can help manufacturers enhance productivity, reduce costs and improve overall efficiency. This makes it a crucial tool for achieving operational excellence and staying competitive in the manufacturing industry. With the pressures many businesses are under, techniques which can provide a framework to do so are certainly well-worth embracing.