OEE definition and explanation: a brief guide to help you

In recent years, the concern with performance indicators and ways to increase the productivity and equipment performance has grown considerably. In this sense, companies started to apply some parameters, such as the OEE

Do you know what the OEE definition means? TheOEE or Overall Equipment Effectiveness is one of the most used indicators in large industries to measure and represent the operational reality of the factory floor and production lines. With this parameter definition, many managers achieve incredible results in terms of continuous process improvement. It is possible to verify the productive efficiency of a certain sector or equipment, analyzing how its resources are being used, providing valuable information to interested parties. Overall Equipment Efficiency can also be applied to a company as a whole. 

Variables to determine efficiency calculation

As the main objective of the OEE definition is to measure the efficiency of a company’s machinery and equipment as a whole, it is necessary to answer a few questions before moving on to the mathematical part of the efficiency calculation.

  • How often is the equipment available to operate?
  • What is the production speed performance?
  • How many goods were produced? How many did not generate benchmark?

Answering these questions will be essential to analyze the panorama of the operation of a business, regardless of the field of activity. 

Three main aspects of the OEE   

The next step is to perform the easy oee calculation. The answers will provide important information on three main KPI aspects – Availability, Quality, and Performance. Therefore, you need to calculate each of these items and multiply them. The result will be the value of the OEE. 

Availability Indicator

The availability dashboard has the function of measuring the time that a machine was actually available for production. It takes into account the time that was planned for its operation and the time in which the equipment actually worked. It is important to highlight that scheduled shutdowns (preventive maintenance) cannot be accounted for, as they are previously planned. Several aspects influence the time definition available. Suppose you have purchased a forklift. You evaluated that it can operate for 360 minutes a day. It needs 60 minutes for preventive maintenance (planned downtime). Therefore, its planned available time was 300 minutes.

Quality Indicator

The quality is used to assess whether production of the machines is being useful. For ease of understanding, imagine that the forklift is stacking boxes the wrong way. If this happens, there will be rework to ensure correct placement. Therefore, before starting production, it is necessary to define some excel parameters. Obviously, all products produced must conform to specifications, ensuring production quality. Non-conforming materials are considered scrap. Suppose that on an average day it is possible to stack 1,500 boxes. However, you noticed that 150 were crooked, needing to replace them to avoid falls and accidents. Therefore, it is said that 1,350 boxes were placed correctly.

Performance Indicator

Finally yet importantly is performance. This SAP indicator is responsible for evaluating whether a certain machine is producing within the expected range. Every production line has its maximum capacity, which is related to the time it is produced. Performance can be represented by the percentage of production speed in relation to nominal speed. Some factors can interfere in this process, such as employees who are not properly trained or the use of raw material out of specification.

How to improve business processes with OEE?

The analysis of results and its use in the day to day of the company can be of great value for the continuous improvement of the processes. OEE definition can be considered as an integrator of areas since it provides performance information that affects all productive sectors. Thus, areas such as engineering, manufacturing, maintenance and quality account for the same indicator. 

Another advantage of hiring the OEE Institute is the gathering of important information for the decision-making process. The company’s senior management will be able to visualize the actual capacity of the factory floor, being able to calculate

  • What are the best and worst machines?
  • Whether it is necessary to renovate or change any equipment,
  • Whether it will be necessary to expand the factory,
  • The use of more production shifts,

Therefore, it can be said that hiring a professional OEE Institute can represent an optimization in the result of the industry as a whole. There are some examples of a 10% improvement in cloud OEE that represented a 30% increase in the company’s bottom line. It is worth calculating and using it to measure the efficiency of a company’s processes.