How to Improve Your OEE:
Six Practical Tips


OEE stands for overall equipment effectiveness and is regarded to be an important metric by many companies. Calculating OEE will give you the required insights in your true productivity. A world class OEE is set at 85% while an average industry benchmark is around 50%. Whatever your true score, OEE is only a valuable KPI if you use it to achieve realistic objectives. What is your true OEE potential and how can you actually achieve it?

Tip 1: Use OEE to Enhance Collaboration

Overall Equipment Effectiveness measures how productive you truly are based on planned production time. There are many sources on how to best calculate OEE, so we will only offer a simple version of the OEE formula:

OEE Calculation

OEE = (Availability) x (Performance) x (Quality)

Notice the interdisciplinary character of the formula. In order to be able to calculate your OEE and work on improving your effectiveness you need people, processes and systems from departments such as Production/ Operations, Maintenance, Engineering, Supply/ Warehouse and Quality Assurance working together. So, keep in mind that OEE is a great means to drive internal collaboration.

Tip 2Set Realistic OEE Objectives 

Know what your APM challenges are and determine your own objectives so you know what to aim for. Assess and calculate your true OEE potential based on the design, asset condition and current performance. You may want to have a world-class 85% OEE but is that realistic if your current OEE is at 50%? Benchmarks can help but do not focus on these too much. Industry benchmarks for OEE vary greatly between sources, industries and organizations mentioning averages as far apart as 30% to 70% (some references: 30-60%60%50-70%, 45-60%). Once having scoped your improvement potential, you could benchmark against other sites within your organization or benchmark results of different production lines or even shifts working on the same production line. Whichever approach you decide on, make your objectives SMART (specific, measurable, assignable, realistic and time-related).

Tip 3Use Data tYour Advantage 

Ideally, you would gather data from all your IT/ OT systems and make them available in one dashboard or KPI overview so everyone uses the same data in the same way. An asset manager or maintenance manager, the roles that usually get assigned to this, usually realize quickly that this is a Herculean task.

Do not panic, you do not immediately need to be an APM 4.0 or Digital Transformation expert. Just start with connecting two systems, preferably the ones that are most valuable for your OEE KPI. Be aware of which data indicates what, whether the data is clean and usable and focus on the data that you should use to support the OEE KPI in a dashboard. Do not be afraid to get your colleagues from other departments and disciplines involved or ask an expert for help.

Tip 4Prioritize and Focus 

Which assets are critical for good performance and quality? 20-30% of your assets should be prioritized because good production and performance depend on them. There are many practical ways of prioritizing your assets based on the production dependency. Focus on these assets and start to optimize their performance and their maintenance strategies. Close the loop: keep track of the performance of your priority equipment and keep improving the maintenance regime based on feedback of your data and maintenance technicians.

Tip 5Give Your Preventive Maintenance a Boost 

Preventing failure of your assets (especially your critical ones) is of course essential. This increases the asset lifetime and availability of the asset which leads to a higher performance rate which also decreases the probability of defects and therefore a higher quality overall. Usual suspects of techniques used for preventive maintenance determinations are TPM, FMECA and RCM methodologies. But do not go into these blindly. Start with a basic maintenance regime based on your own knowledge and expertise, OEM advice or libraries from your business or from an external provider. Things to keep in mind:

  • Use the risk-based FMECA or RCM methodologies to optimize the existing maintenance regime and find a smart way to apply the results to similar assets in your plant.
  • Be aware that the implementation of the preventive maintenance strategies takes at least as much time as the determination of the strategy. This includes creating work instructions, planning maintenance tasks in your EAM, attaching the right materials, scheduling the tasks and instructing the technicians

Tip 6: Sustainably Improve OEE

Consider all these improvement activities as just a starting point. Measure the OEE results of your efforts and you will realize that it really pays to invest in improving PM. However, keep the bigger picture in mind. It is important to improve your systems, maintenance and APM continuously. Is your team up for it? Are they capable of making this big step forward?

The road map of sustainably improving your OEE should include the ability of your organization to take the next step, so include getting internal support and driving change in your APM framework. In order to get your improvement potential realized you will have to invest effort, time and money first to reap the benefits later.

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