Introduction

Most organizations reach capacity restrictions and quickly consider working overtime, recruiting extra personnel, or buying extra equipment / machine. Only a few firms seek to optimize the capacity and efficiency of their current lines.

Before optimizing efficiency, organizations need to clearly identify which area has the most potential to increase its throughput. OEE will come handy in this case. By tracking OEE, manufacturers can identify the current efficiency, and breaking down to Availability, Performance and Quality. Often OEE is set as KPI for management to gauge their Manufacturing Department’s performance.

Companies may reveal hidden capacity by monitoring OEE, which has been labeled “uncovering the secret factory”. OEE gives users a deeper knowledge of how, why, and when the production did not hit the planned capacity.

How to Calculate OEE

OEE is defined as the percentage product of availability, performance, and quality:

OEE = Availability × Performance × Quality

In short, Availability refers to the amount of time the machine running, Performance is a metric for calculating speed losses, and Quality measures the good yield. Each of these OEE components reflects a decrease in efficiency due to wastage.

To put it in a simple way, availability loss means the machine is not running when they are supposed to run. Although machines are designed to run 24 hours a day, there are stop time like changeovers, cleaning, maintenance, breakdowns, or power. External issues like operator missing in action, material shortages also contribute to Availability loss.

Performance will loss when a manufacturing runs at a slower pace than the theoretical run rate for that particular assembly on that line or machine. Besides slow runs that will impact Performance, it is often that minor halts (like temporary jam/overloads) that did not record, or some not-in-SOP job (eg. Quick rework that spend only a few seconds) will contribute to performance loss if recorded.

Quality wise is rather straightforward, it is out of the finish goods, how many percent of them was not rejected by QA, whether In-Line, or Outgoing. IQA is not taken into account as they are related to Raw Material, not Production.

OEE estimates usually omit planned shutdown for clearer picture.

Let’s try to understand this with the help of an example below

Total time: The operation will run for seven 6 days a week, 24 hours a day, for a total of 8640 minutes.

Downtime: The machine was halted for 1640 minutes due to power outage.

Cycle time: The machine produce 1 piece per 1 minute.

During this week, the production had produced 3,300pcs of products. Out of them:-

Good units: 3000 pcs & Faulty units: 300 pcs.

To identify the OEE:-

Back to OEE basic Equation:

OEE= Availability × Performance × Quality

OEE = 81% × 47.1% × 91% = 34.7%

Which means, the production has an Overall Equipment Efficiency of 34.7%. And by looking at the breakdown, they should have focus on Performance when it comes to improvement projects.

In this case, the factory management just need to put on effort to increase their performance (eg. Unit Produced per Hour), instead of chasing on Availbility or Quality which is already quite high. (always pluck the low hanging fruit)

In this example, if the production worker follows the planned cycle time, which was measured (they can make one piece in one minute) they would have produced 7,000 pieces! Just slightly push them to perform, and push the performance up by a mere 5%, which is easy to do as they are running less than half of the planned speed, the output will be increased by 350 pcs, which directly coverts to 10% extra output! (read: revenue)

And what’s best is it can be done without additional investment on equipment or overtime, because we had just pin pointed the real issue to resolve.

Benefits of Using OEE as KPI:

Fast and Immediate ROI: Calculating OEE will have a very quick payback. Since OEE measures the possible improvements and flaws in the existing process, these processes can be improved to achieve higher throughput and hence faster ROI.

Enhanced Competitivity: Let’s face it, you’re up against competition both at home and abroad. OEE is another tool for you to compare yourself with your competitors.

Fully Utilize your Equipment: An OEE strategy helps you understand your equipment’s actual performance so you know whether it is working efficiently as your machine provider promised.

Quality Improvements: OEE can help to determine the fundamental causes of your quality problems, and can assist you with implementing repairs and enhancements.

Facts based decisions: Factory staff will be aware of how they are truly functioning with trustworthy real-time data, allowing quick improvement measures to be taken at all levels of management based on facts and figures, no more “based on my experience” guessing where there are chances of misjudgment.

Better Maintenance Strategy: Having an OEE indicator will help pin-pointing actual occurrences of downtime, accurate up to seconds, which provides a significant cost reduction in both regular maintenance and breakdowns.

How to Start Tracking OEE?

OEE is adaptable, enabling you to begin with a single machine and gradually expand to the full process or facility. Of course, it can be derived from daily production reports even by pen and paper, or an simple spreadsheet. However, we would recommend the data collection process to be automated using MES / MoMs System, which provides more accurate, and real-time figures.

Neptrix infohub®framework had been trusted by many manufacturers, from MNCs to SMEs. to keep track on their Production’s OEE.

It could be even better if pairing with Neptrix®FACView dashboarding solution, the production guys can now keep track on their performance, in real time, and help your company stay ahead of your competitors.

Besides, you can also leverage Neptrix®IoT solutions to collect OEE data automatically from the machines without human input!

infohub in action:  we collect OEE data directly from Fanuc machine, and display on Neptrix®FACView dashboard.

You may contact our consultants at sales@neptrix.com in order to learn more about how Neptrix’s proprietary infohub®Framework can help in your production tasks. Interested to read similar articles? Follow our Facebook page, or subscribe to our newsletter at www.neptrix.com