Overall Equipment Effectiveness (OEE)

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Overall Equipment Effectiveness (OEE) - short version

A clearly defined measure of actual process/asset performance relative to its maximum capability.

Overall Equipment Effectiveness (OEE) - long version

Overall equipment effectiveness (OEE) is a hierarchy of metrics which evaluates and indicates how effectively a manufacturing operation is utilized. The results are stated in a generic form which allows comparison between manufacturing units in differing industries. It is not however an absolute measure and is best used to identify scope for process performance improvement, and how to get the improvement. If for example the cycle time is reduced, the OEE can also reduce, even though more product is produced for less resource. Another example is if one enterprise serves a high volume, low variety market, and another enterprise serves a low volume, high variety market. More changeovers (set-ups) will lower the OEE in comparison, but if the product is sold at a premium, there could be more margin with a lower OEE.

OEE measurement is also commonly used as a key performance indicator (KPI) in conjunction with lean manufacturing efforts to provide an indicator of success. OEE can be best illustrated by a brief discussion of the six metrics that comprise the system. The hierarchy consists of two top-level measures and four underlying measures. Overall equipment effectiveness (OEE) and total effective equipment performance (TEEP) are two closely related measurements that report the overall utilization of facilities, time and material for manufacturing operations. These top view metrics directly indicate the gap between actual and ideal performance.

* Overall equipment effectiveness quantifies how well a manufacturing unit performs relative to its designed capacity, during the periods when it is scheduled to run.

* Total effective equipment performance (TEEP) measures OEE against calendar hours, i.e.: 24 hours per day, 365 days per year.

In addition to the above measures, there are four underlying metrics that provide understanding as to why and where the OEE and TEEP gaps exist. The measurements are described below:

* Loading: The portion of the TEEP Metric that represents the percentage of total calendar time that is actually scheduled for operation.

* Availability: The portion of the OEE Metric represents the percentage of scheduled time that the operation is available to operate. Often referred to as Uptime.

* Performance: The portion of the OEE Metric represents the speed at which the Work Center runs as a percentage of its designed speed.

* Quality: The portion of the OEE Metric represents the Good Units produced as a percentage of the Total Units Started. Commonly referred to as First Pass Yield FPY.


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