OEE CalculationWhat is the correct way to calculate OEE?
The Correct Way to Calculate OEE
The basics of
The OEE Calculation
The basis of the calculation is as simple as it is brilliant; it assumes a theoretical maximum capacity on the one hand and the actual output on the other. The first point is the point on the horizon. The second is the current position. The genius of the metric is that it not only maps out the ‘loss landscape’ between these two points clearly and unequivocally but -more importantly- that it is also understandable to those who must make their way through it: The operators, technical staff members, engineers and so forth.
As far as is known, the OEE-calculation is the only production indicator with a balance effect (that we would normally only find in the financial world). If anything is ‘forgotten’ or ‘exaggerated’, a gap will appear somewhere else.
In addition, the OEE-calculation combines the factors of time, speed and quality in a useful and responsible way.
Simply put, the OEE-calculations poses three questions:
The three questions of OEE
1. Is the machine operating or not?
If the machine is producing product while it was available to the production-team we know it was running. At this point we do not know whether the product is good. And we know nothing about the speed at which the machine is operating; all we know is that it is running.
The ‘availability rate’ indicates the relationship between the time that the machine could theoretically have been in operation (there was ‘demand’) and the time that there was actual output.
With respect to the time that the machine is operating (in this case 75% of the shift), the calculation now asks the second question:
2. How fast is the machine running?
Say that the machine is designed to produce 10 pieces a minute, in which case you would expect to have 3,600 pieces after 360 minutes. Of course, this is only possible if the machine ‘performs’ while it is running, at 100% speed. The performance rate determines whether this is true:
In the performance rate, ‘theoretical output’ is the output that the machine could have made in theory if the machine had operated at maximum speed during the time that it actually operated.
Now the machine may have operated at high speed, but only produced products that did not meet the specification.
So when we know how long the machine ran and how fast it ran, the next question is:
3. How many products met the specifications?
Once we have measured the time and speed losses, we focus our attention on the quality of the products that are ultimately being made.
The relationship between the number of units produced and the number of the units produced that meet the specification is the ‘quality rate’.
OEE = Availability x Performance x Quality
When we line up the answers to the three questions, the total OEE-Calculation looks like this:
The Overall Equipment Effectiveness is calculated by multiplying the availability rate, performance rate and quality rate: