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Overall Equipment Effectiveness (OEE) - what it is and how to use it.Overall Equipment Effectiveness is the overall performance of one piece of equipment or an entire factory measured through availability, performance rate, and quality rate.OEE can be used to prevent wasteful spending on unnecessary equipment.Instead the business owner can focus on improving the performance of the machinery that he already has.Another common remedy involves reducing fixed cost and the cost of making goods or the cost of goods sold (COGS). In other words OEE is the result of dividing actual output by theoretical maximum output.Many see Overall Equipment Effectiveness as a mathematical way to evaluate process improvements.Another OEE equation would look something like this:
Availability rate X performance rate X quality rate = Overall Equipment Effectiveness Ideal performance would mean that multiplying the availability rate, the performance rate, and the quality rate would equal 100% overall equipment effectiveness.It is interesting that most manufacturers think that they are operating in the 90% range, when actually their operations are closer to the 50% range.Effective evaluation of Overall Equipment Effectiveness produces real (monetary and otherwise) results for a company. These scores can provide workers with metric comparisons to past performance and indicates where improvement has been made and where improvement is still needed.Numbers and scores are generally dictated by industry averages and thus will vary from operation to operation.Let us now take a closer look at availability, performance, and quality rates as they apply to Overall Equipment Effectiveness. Availability Rate = actual production time Overall Equipment Effectiveness measurement and evaluation techniques will vary.Some companies will purchase industry specific software.Others create their own or have departments devoted entirely to the OEE process.Others are more simplistic and use simple rating systems and rounded numbers.The type of environment you work in is the factor in determining how intricate your Overall Equipment Effectiveness measurements and calculations will need to be. Important Overall Equipment Effectiveness Tips... - Identify the abilities and potential of existing equipment. |
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