Overall Equipment Effectiveness - OEE
An explanation of Overall Equipment Effectiveness (OEE)
Many organisations can appear to generate
performance statistics in excess of 100%!
This impossible situation can be as a consequence of
misguided targets/standards, incorrect measurements,
inappropriate measurement systems and/or bonus systems
that encourage misrepresentation. Whatever the reason,
the true performance of capital equipment and the effectiveness
of improvement activity will be impossible to evaluate.
Therefore the return on capital employed will not be
optimised.
OEE is an unforgiving,
and rigorous measure of the true effectiveness of organisations
equipment.
Overall Equipment Effectiveness is the Availability
of Equipment, The Output of the Equipment, and the Quality
rate, all compounded together.
OEE = Availability% x Performance% x Quality%
All measurement should be conducted with an objective
of seeking performance improvement, if we measure performance
simply for its own sake, and take no improvement action
then why bother at all.
Overall Equipment Effectiveness
pinpoints specific losses, and directs limited improvement
resources to where they can reap most benefit. The objectiveness
of OEE as a measure often dispels the rumours and hearsay
that surround poor performance.
Availability:
The time that equipment is available for use.
From the 24 hours in a day, seven days a week, we need
to remove planned downtime, such as weekends, nights,
breaks, planned maintenance time. Set-up, Start-up,
and other unplanned losses, such as breakdowns, etc.
are recorded by category.
Performance Losses:
The difference between theoretical output of a piece
of equipment and what is actually generated. Failures
in this category include, minor stoppages,machine idling,
jams, mis-feeds and reduced operating speeds. Often
these failures are dismissed as insignificant but the
discipline of OEE,
ensures that their true and significant cost is exposed.
Quality Losses:
This includes all quality related issues whether they
were planned or not, rejects, rework, yield loss, samples,
start-up losses etc. If:
Availability is 75%
Performance is 70%
Quality is 98%
Overall Equipment Effectiveness is 75% x 70% x 98% =
51.5%
Organisation operating in different market segments
can expect to achieve different levels of OEE, however to achieve success it is
imperative that businesses maximise the return on their
capital equipment. By having an objective measure in
place, organisations can understand the performance
of their key equipment, and will also have a firm foundation
for their own improvement activities.
OEE Case Study.
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