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Improving Overall Equipment Effectiveness (OEE) in Business Operations


Overall equipment effectiveness (OEE) is a performance KPI commonly used by operations managers, production and process engineers to compare the performance of a production plant, machine or among similar or identical production plants calculated by multiplying the measurement of availability, performance efficiency and quality of a specific plant, machine or process. OEE is considered by many managers an overall metric of plant efficiency as well as plant performance and is often a KPI target for management and operations staff.

As OEE is a common priority and performance KPI among production and operation managers in many industries it is important to identify the areas, work practices and tools that allow them to identify the opportunities for OEE improvement. Although every industry and process is quite different we aim to provide a generalist view and guidance that should at the very least prompt research and evaluation of certain areas and practices in your respective processes and work areas.

Searching for OEE improvement Opportunities

As the components that make OEE are three ratios we will divide the search for OEE improvement opportunities in these areas.

Plant Availability

Plant availability to be in production usually is a good place to start as it will focus efforts on reducing stoppage or down times of all kinds and keep the production process going.

Usually in a manufacturing environment plant availability is influenced by two major categories of plant downtime or stoppage time:

Production related downtime, such as product change times, production and quality related issues forcing production stoppages.

Opportunities in Production related downtime can be found in the following areas:

- Production planning to minimize the amount of product changeovers and potentially quality issues by avoiding changes in between very different products.

- Product changeover times can be improved by the application of SMED principles, error proofing of plant and equipment and well trained production technicians.

- Quality issues can be caused by a range of issues in any part of the supply chain and production process. So a starting point is the application of quality at the source , from raw material quality control to internal quality processes such as standardization of work methods, regular component and product testing against production or industry standards. Training also plays an important part in preventing quality issues.

Maintenance or Engineering downtime, such as plant and equipment failures resulting in stoppages, electrical component issues forcing production delays and stoppages.

Opportunities in Maintenance plant downtime can be found in the following areas:

- Mechanical and Electrical plant failures due to servicing plant at irregular periods or skipping maintenance servicing

- Plant failures due to excessive loading or over working of plant components, plant components rubbing against each other, over flow of materials carried by conveyor belts causing contamination in moving plant parts such as bearings, sensors and rollers.

- Incorrect plant, tooling or components used in plant and equipment for the production or engineering application

- No conditioning monitoring or reliability plan in place to closely monitor critical plant components.

- Training of maintenance personnel to properly service, replace and monitor plant

Quality or Fist time through ratio

The quality of production can be influenced by a range of causes and will vary depending on the process, equipment or industry the manufacturer operates in. In depth discussion of specific quality issues, analysis or causes go beyond the scope of this article, but we provide areas or starting points to focus the search in any production process where quality issues may lie. As examples of factors which may affect production quality may include:

- Raw material feed or are mixed into the process, periods were one or several raw material stops feeding into the process

- The quality of raw materials, or a change in the source of these

- Operator training and differences between performing tasks or lack of standardisation

- Wear in components or tools in the production plant which may cause quality issues

- Incorrect settings on production equipment, ovens, tools, automation systems, or quality scanning systems

- Plant or equipment not properly installed or properly sized for the application

Performance Efficiency

The performance efficiency component which makes up OEE measures the efficiency of a production process to manufacture components and products at their set ideal cycle time or production rate. In most modern automated production process this measure will not vary much and may at times or under certain conditions be influenced by external factors which may cause delays. An example of this may be extremely cold weather effects on production ovens or kilns.

In some cases such as production processes in the chemical industry a variation in one of the raw materials, addition rate, or other conditions can have effects of delaying or increasing the speed of chemical reactions which may affect the production time.

Performance efficiency has a greater risk of variation in manual production processes or processes that have a greater deal of manual human interaction. These processes or stages in the production process are a starting point to evaluate variations in cycle times. In these cases some of the items that can be analyses to improve efficiency are:

- Operator knowledge and training

- Operator fatigue or physical suitability to perform the tasks

- Condition and quantity of tools or plant and equipment at workstations

- Layout of production process, workstations and material flow within the plant

Performance efficiencies of a process can usually be improved with the use of technology and automation of tasks to remove variability and increase reliability of the production process to manufacture products within their appropriate cycle time.

Achieving improvements in OEE

Improving OEE successfully should be a focused team approach usually composed of production, engineering, quality control, and management staff. The team should include floor staff both operators and technicians who know the process well Many tools and analysis frameworks are available to help in collecting data and potential causes of issues affecting OEE a majority discussed and explained throughout this site.

Exploring each of the areas mentioned above should be done one by one following a concrete problem finding analysis and solving framework such as root cause analysis or PDCA cycle as examples.

Issues around plant reliability and maintenance can usually be addressed by a kaizen approach to maintenance practices, plant reliability and condition monitoring or the implementation of total productive maintenance throughout the plant.


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