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Mar 29, 2015

How OEE Can Help Your Business to Become More Efficient ?

OEE -Overall Equipment Effectiveness is a KPI that has been implemented into manufacturing and engineering companies across the globe for a number of decades. However there is a general misconception behind 2 key areas which would aid businesses in starting or maintaining their lean journey. Firstly there are discrepancies regarding the right calculations involved and the second area is the interpretation of the final figure calculated with a rule that a company must be world class if its OEE is 85% and above. The calculation for working out OEE is: Percentage calculation obtained by multiplying the availability rate, the performance efficiency performance rate, and the quality rate. If we look at the performance efficiency of a machine, companies are too quick to look at the overall capabilities of the machines and set it to the highest specification through tune ups. However what is the point in over producing just because the machine is capable of doing more volume. Takt time is the vital ingredient here, were the machine produces enough for the demands otherwise there will be too much waste. Availability rate is another area that needs addressing. The machines should be up and ready to go and meet the takt time. If it is always up and running 100% of the time even though there has been no demand then this again leads to unnecessary usage and waste. PPM scheduling should also look into takt time trends and plan their maintenance programs around this. Measuring the quality aspect again is a vital part of the lean journey and OEE calculation. Defects are going to occur but what is important is to define what an actual defect is and that these defects may increase through wear and tear of the machines. One piece flow is the way forward in being able to identify and react quicker to defects as well as the introduction of SPC. Overall it is evident that OEE is a vital ingredient on the lean journey but more often than not is not properly understood and can indeed create more problems. Companies need to analyse takt time, look into the measurement of defects and quality with SPC and look at the availability rates in comparison with the demands. Only when the bigger picture is understood and passed through the workforce will the lean journey begin gaining speed.