OEE: How to Calculate Overall Equipment Effectiveness

OEE (Overall Equipment Effectiveness) takes the three sources of manufacturing productivity loss: Availability, Performance and Quality, and creates metrics that provide a consistent way to measure the effectiveness of a machine or process.

Availability Factor

The Availability Factor of the OEE metric represents the percentage of scheduled time that the machine or process is available for production. The Availability metric is a measurement of uptime that is designed to exclude the effects of quality, performance and scheduled downtime events.

The analysis starts with the amount of time your plant is available for production. From there, you subtract planned shutdown, including any events where there is no intention of running production (scheduled downtime). Downtime loss should include events that stop production such as material and labor shortages, equipment failures and setup time.

Setup time is included in the Availability analysis. Though it is not possible to eliminate setup time, it is possible to be reduce it. The formula for Availability = Actual Uptime / Scheduled Uptime.

Performance Factor

The Performance factor of the OEE metric represents the speed that the machine or process produces parts compared to the designed speed or standard cycle. This metric is based purely on the speed at which parts are produced and is not influenced by availability or quality.

Since Performance only takes into account speed loss, the calculation is Performance = (Total Parts Produced x Standard Cycle Time) / Actual Uptime where Total Parts Produced includes rejected parts. The Performance metric can show a speed of greater than 100 percent, but when used in the calculation, it must be capped at 100 percent to limit the effect on the percentage.

Quality Factor

The Quality factor of the OEE metric represents the machine or process yield of good parts as a percentage of the total parts produced. It is not affected by Availability or Performance. The calculation is Quality = Good Parts / Total Parts produced.

OEE Calculation

OEE takes into account all three OEE factors and is calculated as OEE = Availability x Performance x Quality.

The thing that makes OEE and its factors a powerful key performance indicator is that it’s not all about a single number. The OEE factors give you three numbers that are individually useful in different circumstances. For example, you may have two runs of the same product with factors as follows:

Run #1 OEE = 81.4% where Availability = 89%, Performance = 92%, Quality = 99.5%
Run #2 OEE = 83.8% where Availability = 96%, Performance = 97%, Quality = 90%

Which is the better run?

If your business follows a Six Sigma management strategy, Run #1 is certainly more desirable than Run #2, even though Run #2 has a higher OEE percentage. It is also important to remember that OEE factors should be compared to each other on a run-to-run basis and not necessarily against 100 percent. This way you can create a comparison to measure the continuous OEE manufacturing improvement efforts one process at a time.

The IQMS Manufacturing ERP product line encompasses both ERP and MES functionality in a single system. The real-time shop floor data that flows automatically from the MES modules can be used to create a simple, intuitive solution for Overall Equipment Effectiveness (OEE).

To learn more about how IQMS provides strong choices to fit the needs and interests of manufacturers everywhere, click www.iqms.com.

Randy Flamm

Randy Flamm, IQMS Chief Product Officer and Chairman of the Board, founded IQMS in 1989. Prior to IQMS, Randy held various technical positions at California manufacturing facilities such as GE Plastics.