Overall Equipment Effectiveness (OEE)

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  Total Productive Maintenance can be a very powerful strategy in supporting the Just in Time System.  In fact, it can be a powerful strategy in supporting any organization in general.  The foundational measurement that is used in TPM is Overall Equipment Effectiveness.  Overall Equipment Effectiveness or OEE as it is often referred to, is a key performance indicator used in the manufacturing industry to determine the efficiency of its plant operation. Most companies do not have a full understanding of their capacity on manufacturing equipment.  OEE measures and makes your plants' effectiveness visual for everyone to see.  You can then create actionable steps to improve quality and production, save time, and eliminate waste.  It is important to note that OEE does not tell you what to improve, rather it is a gauge or a KPI to help you understand where to improve.

How is OEE Calculated?    
  OEE is calculated by multiplying Availability by efficiency and quality.  This gives you a percentage that you can use as an improvement gauge.  Let’s understand each of these three areas of OEE a little better.  

1. Availability is our first Measure.  Here we look at a machine’s ability to be available for production when scheduled.   Production may be halted due to many different forms of downtime.  Some examples may be machine failures, issues with raw materials that are needed, or some problems with scheduling and possibly changeover issues. By comparing scheduled run time to actual run time, we are able to determine the amount of production that was lost from different issues that may have occurred.
2. Next we have Efficiency.  The efficiency measure looks at the number of items produced against a target number and determines the amount of waste when running at different speeds. 
3. The final category that OEE looks at is quality.  This measure looks at the total quantity produced correctly the first time and the total quantity produced.  This measure helps reveal abnormalities and forms of waste that may be hidden from plain sight.

Combined these three categories help calculate the OEE percentage that is used as a gauge.  From here the three categories can be broken down into what is known as the six major losses, which are:

1. Breakdowns.
2. Setups and adjustments.
3. Idling and minor stops.
4. Reduced speed.
5. Quality losses.
6. Start-up issues.