What is the OEE indicator?
The OEE (Overall Equipment Effectiveness) indicator is a key indicator used in production management to assess how efficiently machinery and equipment are used. OEE measures how well production resources are used to their full potential, eliminating losses due to unplanned downtime, low productivity, and quality defects. With the OEE indicator, companies can accurately monitor and optimize their production processes, increasing efficiency and competitiveness.
OEE indicator – formula
The calculation of the OEE indicator is based on three main components: availability, productivity, and quality. Each component is crucial in assessing a machine’s or production process’s efficiency. The formula for the OEE indicator is as follows:
OEE = Availability x Productivity x Quality
- Availability - measures the percentage of production time a machine was available for work:
Availability =
Production time – Downtime
Production time
- Productivity - measures how efficiently the machine is working about its maximum possible output:
Productivity =
Actual performance
Theoretical performance
- Quality - measures the percentage of products that meet specific quality standards:
Quality=
Number of good products
Total number of products
How do you calculate production efficiency?
Calculating production efficiency using OEE is critical to understanding and improving production processes. To do so accurately, it is necessary to consider the various aspects that affect machine uptime, machine capacity, and the quality of the products produced.
Calculating production efficiency with an ERP system
ERP (Enterprise Resource Planning) systems are invaluable in managing production efficiency. By integrating data from different areas of a company’s operations, ERP systems enable accurate tracking and analysis of critical indicators, such as OEE. Using an ERP system to calculate production performance allows you to:
- Automation of data collection - The ERP system automatically records data on machine uptime, downtime, the number of products produced, and quality, eliminating errors resulting from manual information entry.
- Real-time analysis - The data collected by the ERP system is available in real-time, allowing the company to monitor production performance in real-time and respond quickly to problems.
- Process optimization - The ERP system enables the identification of bottlenecks and areas for improvement, which allows the implementation of optimization measures and increases production efficiency.
The most common mistakes in calculating the OEE indicator
Despite its simplicity, the calculation of the OEE indicator can be subject to errors that lead to an incorrect assessment of production efficiency. The most common mistakes include:
- Incomplete data - The need for complete and accurate data on machine hours, downtime, the quantity of products produced, and quality defects can lead to incorrect OEE calculations.
- Improper definitions - unclear or inconsistent definitions of the various components of the OEE indicator (availability, productivity, quality) can lead to misleading interpretations of the results.
- Neglecting the impact of changes - Failing to consider the effects of changes in production processes, such as technological modifications, changes in work organization, or differences in operator skills, can falsify the results of OEE indicator calculations.
How can we improve the OEE rate in the production process?
Improving OEE is crucial for any company seeking to increase production efficiency. Here are some practical steps you can take to enhance OEE:
- Regular inspection and maintenance of machines - Regular inspection and maintenance of machines minimize the risk of unplanned downtime and increase availability.
- Operator training - investing in training for machine operators increases their skills and efficiency, which translates into higher productivity and production quality.
- Process optimization - Analyzing and optimizing production processes allows for identifying and eliminating bottlenecks, increasing productivity.
- Data monitoring and analysis - continuous monitoring and analysis of OEE data allows you to identify areas for improvement on an ongoing basis and implement appropriate corrective actions.
- Implementation of Lean Manufacturing tools - Lean Manufacturing tools and methods, such as 5S, Kaizen, or TPM (Total Productive Maintenance), support continuous improvement of production processes and the OEE indicator.
In summary, the OEE indicator is a critical tool in manufacturing performance management, allowing an accurate resource efficiency assessment. Calculating the OEE indicator with ERP systems enables automation and accuracy, and implementing optimization measures allows continuous improvement of production processes. Improving the OEE indicator translates into higher efficiency, quality, and competitiveness of the company in the market.
