OEE (Overall Equipment Effectiveness) is a powerful metric used by asset-intensive organizations to measure and evaluate their total productivity. It is commonly used by lean manufacturing companies to gauge productivity and compare with the average OEE in manufacturing. Knowing your baseline overall equipment efficiency can also be useful for establishing Key Performance Indicators (KPIs) and target areas of improvement to unleash your true potential.
What is your true OEE potential and how can you improve your OEE and achieve your goal? Here are five actionable tips for improving your overall equipment effectiveness (OEE) and measuring manufacturing productivity.
Tip 1: Use OEE to improve collaboration
Overall Equipment Effectiveness is an excellent tool for measuring how productive you truly are based on planned production time and production line performanc. It will give you also insight into the actual production count efficiency.
An OEE calculation segments the performance of a manufacturing asset or process into three measurable elements:
Each of these elements tie into a specific aspect of the process improvement recommendations for OEE gains. Which can then be evaluated. The result is a better understanding of where and why a piece of equipment fails or is experiencing a performance loss, which leads to more efficient maintenance processes and reduced downtime.
How to calculate OEE
The formula for OEE is
OEE = Availability × Performance × Quality
Notice the interdisciplinary and collaborative nature of the formula. To be to calculate your OEE and work on improving your effectiveness you need people, processes, and systems from departments such as Production, Maintenance, Engineering, Warehouse and Quality Assurance working together.
According to research by Reliable Plant, an OEE score of 85 percent is considered “world class OEE” and the average industry benchmark is approximately 50 percent. Whatever your actual score, OEE is only a valuable KPI if you use it to achieve realistic goals.
Tip 2: Set realistic OEE objectives
Know what your APM challenges are and figure out 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 achieve the gold standard of an 85 percent OEE, but it will be challenging to achieve if your current OEE is closer 50 percent. It would be more practical and realistic to set a more incremental goal and gradually work your way up to approach the world-class standard.
Industry benchmarks for OEE vary between sources, industries and organizations mentioning averages as far apart as 30 percent to 70 percent.
Quick reference for OEE benchmarks: 30-60% – 60% – 50-70%
Once you have scoped your improvement potential, you can benchmark your performance score 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 goals SMART (specific, measurable, assignable, realistic, and time-related).
Tip 3: Use data to your advantage
Ideally, you would gather production 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. The roles that usually oversee this, such as Asset Managers or Maintenance Managers quickly realize that this is an enormous task.
Do not panic, you do not transform into an Industry 4.0 or Digital Transformation expert overnight. Start by connecting a few systems, preferably the ones that are most valuable for your OEE KPI. Keep in mind which data indicates what, whether the data is clean and usable, and focus on the data capture that should support the OEE KPIs in a dashboard.
Before you implement any changes, measure the impact of those changes. If you want to change something, first try to find out if there is anything else that needs to be changed before making the new change. This allows you to avoid unnecessary rework and delays.
Tip 4: Prioritize and focus
Which assets are critical for reliable performance and quality standards? What would be the impact if one of these experiences unplanned downtime?
You should prioritize 20-30 percent of your assets as good production and performance depend on them. There are many practical ways of prioritizing your assets based on the production performance dependency. Focus on these assets, particularly critical assets, and start to optimize their performance and their maintenance activities.
Close the loop – keep track of the performance of your priority equipment and keep improving the maintenance program based on feedback of your data and your maintenance team.
Tip 5: Give preventive maintenance a boost
Preventing failure of your assets (especially your critical ones) is of course essential. A maintenance program increases the lifetime and availability of an asset, which leads to a higher performance rate. It also reduces the risk of equipment failures and process defects.
Usual methods used for preventive maintenance goals are Total Productive Maintenance (TPM), Failure Mode Effects Cause Analysis (FMECA), and Reliability Centered Maintenance (RCM). But do not go into these blindly. Start with the most suitable maintenance program based on your own knowledge and ability, OEM advice, or libraries from an external provider.
- Use the risk based FMECA or RCM methodologies to analyze and optimize your existing routine maintenance process and find a smart way to apply the results to similar assets in your plant for continuous improvement.
- Track how the well the maintenance program can find opportunities for improvement and act on, particularly those that affect the manufacturing process and manufacturing operating productivity.
- Keep in mind 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
Conclusion: Invest to reap the benefits
What’s the importance of OEE for your organization? Consider these improvement activities to be a starting point. Measure the OEE results of your efforts, and you will realize that it really pays off to invest in improving PM. However, keep the bigger picture in mind. It is important to improve your OEE tools, systems, maintenance and APM continuously. Is your team up for it? Are they capable of making this big step forward?
The road map of improving your OEE sustainably should include the ability of your organization to take the next step. Define your OEE implementation steps and include getting internal support and seek the advice of maintenance reliability experts to drive change within your APM framework.
Finally, remember that to realize your improvement potential you will have to invest effort, time, and money to reap the benefits later.
MaxGrip consultants Ernstjan Meinen and Justin Satink share four asset management benchmarks and explain with site assessment examples how context influences results.
NVDO Webinar about building a business case for asset performance improvements through a.o. benchmarking (presented in Dutch).
In this toolkit, gain access to spreadsheet and infographic templates to get started with a Five Why technique root cause analysis