The simplest way to calculate Overall Equipment Effectiveness (OEE) is as the ratio of Fully Productive Time to Planned Production Time. Fully Productive Time is just another way of saying manufacturing only Good Parts as fast as possible (Ideal Cycle Time) with no Stop Time. Hence the calculation is:
Here, Fully Productive Time is actual production time after all losses are subtracted, Planned Production Time is the total time that equipment is expected to produce, Good Parts meet the quality standards, Ideal Cycle Time is the minimum time to produce one part, and Stop Time also called Down Time is all the production time when the production was halted because of planned or unplanned stops.
Although this is an entirely valid calculation of OEE, it does not provide information about the three loss-related factors: Availability, Performance, and Quality. For that – we use the preferred calculation.
Availability takes into account all events that stop planned production long enough where it makes sense to track a reason for being down (typically several minutes).
Run Time is simply Planned Production Time less Stop Time, where Stop Time is defined as all time where the manufacturing process was intended to be running but was not due to Unplanned Stops (e.g., Breakdowns) or Planned Stops (e.g., Changeovers).
Ideal Cycle Time is the fastest cycle time that your process can achieve in optimal circumstances. Therefore, when it is multiplied by Total Count the result is Net Run Time (the fastest possible time to manufacture the parts).
Since rate is the reciprocal of time, Performance can also be calculated as:
Performance should never be greater than 100%. If it is, that usually indicates that Ideal Cycle Time is set incorrectly (it is too high).
Quality takes into account manufactured parts that do not meet quality standards, including parts that need rework. Remember, OEE Quality is similar to First Pass Yield, in that it defines Good Parts as parts that successfully pass through the manufacturing process the first time without needing any rework.
This is the same as taking the ratio of Fully Productive Time (only Good Parts manufactured as fast as possible with no Stop Time) to Net Run Time (all parts manufactured as fast as possible with no stop time).
OEE takes into account all losses, resulting in a measure of truly productive manufacturing time. It is calculated as:
This is the “simplest” OEE calculation described earlier. And, as described earlier, multiplying Good Count by Ideal Cycle Time results in Fully Productive Time (manufacturing only Good Parts, as fast as possible, with no Stop Time).
Why the Preferred OEE Calculation?
OEE scores provide a very valuable insight – an accurate picture of how effectively your manufacturing process is running. And, it makes it easy to track improvements in that process over time.
In the preferred calculation you get the best of both worlds. A single number that captures how well you are doing (OEE) and three numbers that capture the fundamental nature of your losses (Availability, Performance, and Quality).
Here is an interesting example. Look at the following OEE data for two sequential weeks.
|OEE Factor||Week 1||Week 2|
OEE is improving. Great job! Or is it? Dig a little deeper and the picture is less clear. Most companies would not want to increase Availability by 5.0% at the expense of decreasing Quality by 4.5%.
Now let’s work through a complete example using the preferred OEE calculation. Here is data recorded for the first shift:
|Shift Length||8 hours (480 minutes)|
|Breaks||(2) 15 minute and (1) 30 minute|
|Ideal Cycle Time||1.0 seconds|
|Total Count||19,271 widgets|
|Reject Count||423 widgets|
Planned Production Time
Example: 480 minutes − 60 minutes = 420 minutes
The next step is to calculate the amount of time that production was actually running (was not stopped). Remember that Stop Time should include both Unplanned Stops (e.g., Breakdowns) or Planned Stops (e.g., Changeovers). Both provide opportunities for improvement.
Example: 420 minutes − 47 minutes = 373 minutes
If you do not directly track Good Count, it also needs to be calculated.
Example: 19,271 widgets − 423 widgets = 18,848 widgets
Example: 373 minutes / 420 minutes = 0.8881 (88.81%)
Example: (1.0 seconds × 19,271 widgets) / (373 minutes × 60 seconds) = 0.8611 (86.11%)
Performance can also be calculated based on Ideal Run Rate. The equivalent Ideal Run Rate in our example is 60 parts per minute.
Example: (19,271 widgets / 373 minutes) / 60 parts per minute = 0.8611 (86.11%)
Example: 18,848 widgets / 19,271 widgets = 0.9780 (97.80%)
Example: 0.8881 × 0.8611 × 0.9780 = 0.7479 (74.79%)
OEE can also be calculated using the simple calculation.
Example: (18,848 widgets × 1.0 seconds) / (420 minutes × 60 seconds) = 0.7479 (74.79%)
The result is the same in both cases. The OEE for this shift is 74.79%.