In our Insiders article two months ago, we talked equipment maintenance: why it matters, how to stay on top of it, and what to prioritize. I mentioned OEE, or Overall Equipment Effectiveness, as an important metric every company should use to analyze their equipment assets’ performance. Because I’ve received quite a few questions about OEE since that article was posted online, let’s delve a little deeper into why OEE is time well spent.
Maximizing your packing line’s operational up-time depends on more than hoping problems don’t happen and scrambling to fix them when they do. Proactive (and, consequently, more efficient and successful) companies constantly assess the likelihood of issues occurring and are prepared at all times to mitigate any that do occur. This analysis and planning process starts with OEE.
OEE measures the productivity of each individual piece of equipment, expressed as a percentage of ideal (100 per cent) productivity.
You can calculate OEE as follows:
OEE = Equipment Availability x Efficiency x Quality
Equipment availability is defined as the percentage of time that the equipment is actually producing product when it should be producing product. If the equipment is broken down for two weeks out of four, it would be calculated as only 50 per cent available. Efficiency refers to how close to 100 per cent of its theoretical maximum production the piece of equipment is producing when it is operating. Quality refers to what percentage of the work done by that piece of equipment meets desired quality specifications.
Some companies measure availability on a 24/7 timescale, believing that equipment should be working at all times and downtime for any purpose (including a lack of customer orders) should be calculated as lowered availability. This method for measuring availability offers the benefits of measuring all equipment against the same standard, which makes it easier to assess any inefficiencies or over capacity within the business.
That said, I suggest measuring availability in terms of the hours the equipment should, ideally, be running to fulfill customer orders. For example: if it would take nine hours to complete your customer orders at optimal operating availability, availability for that piece of equipment should be calculated based on nine hours rather than 24.
Efficiency should be calculated as the total amount of product produced divided by the time the equipment was available times the theoretical maximum production rate of that equipment.
As a standardized metric, OEE can point out wear, breakdowns and inefficiencies in individual pieces of equipment before they might be blatantly obvious to the operator or company. OEE is even more useful when results are tracked over time: since declining availability, efficiency or quality can cost a company significant productivity long before it causes a total shut-down of one’s packing line, OEE metrics can be an important component in proactive maintenance.
Congratulations to all companies already measuring OEE: you are on the leading edge of an important step forward in equipment management. For everyone else, know that adding OEE to your company’s productivity analysis will pay rewards in the long-run. And rest assured, help is available through equipment manufacturers to get you started.