Keyur B
January 10, 2024
10 minutes to read
Updated On : March 28, 2024
For many the operations in the manufacturing industry seem easy. But actually, it is not! For you everything seems fine, but are you truly running your operations as efficiently as possible? What if there’s unplanned downtime during a changeover or a slowdown in the operation due to parts shortage? It’s essential to track the effectiveness of your process – uptime, throughput, and quality.
There is a famous quote in the management,
“You can’t improve what you can’t measure.”
Peter Drucker
This quote indicates how crucial it is to understand and enhance your manufacturing efficiency. Hence, here comes the role of OEE, your key to not just monitoring but boosting your entire production process. It is the critical KPI used by almost every firm worldwide to know how the overall production system is performing. There are several parameters that form a subset of OEE. Moreover, many technologies like AR, AI, VR, and IoT are used by manufacturers to achieve a good OEE.
In the journey towards operational excellence, leveraging technologies such as AR, AI, VR, and IoT plays a pivotal role in monitoring and significantly enhancing your production processes. Explore Plutomen’s guide to connected worker solutions and how these technologies can seamlessly integrate into your operations, enhancing equipment effectiveness and worker efficiency. This guide offers practical insights into transforming your workforce into a digitally empowered team capable of driving your OEE numbers to world-class standards.
Ideally, an OEE of 85 reflects world-class operations. However, not every firm can achieve it. Let’s read ahead and learn more about what is Overall Equipment Effectiveness.
The OEE is an indispensable performance parameter manufacturers use to know the efficiency and productivity of the production process or machine. It precisely measures the equipment utilization along with product quality and time frame.
For example, how fast a quality product is made and how many in a specified time can be assessed with OEE.
OEE is calculated with the help of three primary parameters, such as
As described above, OEE calculation methods for production improvement have three aspects. All three need to be quantified to get the value of OEE.
The availability aspect is used to analyze the time for which the equipment was available for production. It includes active time, setup time, unplanned downtime, equipment breakdown, etc. The availability is calculated as the ratio of the operating time of the machine to the planned production time.
Availability: Operating Time/Planned Production Time x 100
For example, if a machine ran for 4 hours due to a breakdown but was scheduled to run for 5 hours, the availability would be 80% (4 hours / 5 hours).
The performance aspect is used to deduce how effectively the machine is running. It accounts for several factors, such as speed losses, minor stoppages, etc. The performance of a machine is calculated as the ratio of speed at which the machine is running to optimal speed.
Performance: (Ideal Cycle Time × Total Count) / Run Time x 100
For example, if the actual cycle time is 2 minutes and the ideal cycle time is 1 minute, the performance would be 200% (2 minutes / 1 minute * 100%).
Quality is by far the most important factor of OEE. Quality in OEE accounts for any
defects and errors in the manufacturing process. It is quantified by good units to total units produced.
Quality: Good Items/Total Items x 100
For example, if 90 good units were produced out of 100 total units, the quality would be 90% (90 units / 100 units * 100%).
In the end, Overall Equipment Effectiveness refers to the product of all three factors.
OEE: Quality x Performance x Availability
Continuing the example above, with 80% availability, 200% performance, and 90% quality, the OEE score would be 144% (0.8 * 2 * 0.9).
OEE: Quality x Performance x Availability
Analyzing the aspects above, it is clear that OEE is a critical aspect. On top of criticality, it can also be challenging to calculate it if your manufacturing plant is big. Nevertheless, if calculated well and timely, it can lead to several pros for the business. Most importantly, several advanced technologies are necessary to improve OEE.
Here are some aspects that prove why OEE is helpful to track in manufacturing:
Overall equipment effectiveness is used to measure performance. While measuring, it is possible that manufacturers may discover some machine issues, for instance, wear and tear of any internal machine parts. Therefore, I can say that OEE can help you diagnose machine issues.
Not only this, but OEE also enables businesses to take care of the machines. How? To keep the overall equipment effectiveness at an optimum level, businesses must invest in state-of-the-art technology to keep downtime low.
Using technologies like Data Analytics, Augmented Reality, and the Internet of Things, businesses can oversee the machines continuously and make repairs instantly if required. Consequently simplifies your repair & maintenance.
Not just performance but OEE is also an indicator of quality. As described, the higher the number of good items, the better will be the quality of production. As per statistics, the cost of poor quality can be around 5 to 30% of gross sales to manufacturers. Based on the scale of the business, it can be in thousands to millions of dollars.
With manufacturing businesses backed by technologies feeding you performance data at all times, you can increase the number of good items significantly. This not only increases the quality yield but also amplifies the customer experience and customer satisfaction.
It is not always the workforce affecting the overall productivity. It can be machines, too. Some manufacturers do not keep track of the machines, which may lead to them generating less revenue.
With access to the right data and at the right time, businesses can significantly and quickly make changes to their machines, leading to better productivity and ROI.
The use of technologies like the Internet of Things and smart sensors in improving OEE can help in capturing real-time data from machines across the facilities. This data can be analyzed in real-time to find any abnormalities and take counteracting measures almost instantly.
No matter if you are a food manufacturer, tire manufacturer, consumer product manufacturer, or whatnot, every business requires machinery, and machinery is expensive. Therefore, an outstanding return on investment is paramount to make up for the initial expenses.
With good overall equipment effectiveness, manufacturers can easily achieve their targets. Producing quality goods while keeping machine downtime to a minimum can help businesses achieve their projected ROI easily.
The OEE holds utmost importance in maintaining optimum resource utilization. How? Well, resource utilization is not just about machinery or raw materials; it is also about the manpower working to operate the machinery.
As per industry stats, 0.8 or 80% is counted as world-class resource utilization, including breaks and lunches to breakdowns, changeovers, setups, and more.
To achieve this resource utilization, you must focus on improving OEE, which is directly linked to the workers’ performance. Technologies like AR and Virtual Reality can be used to provide immersive training environments and material to the workforce. With proper hands-on training, they can handle the machinery well and improve their competency, consequently leading to better resource utilization.
It is pretty obvious that if your manufacturing business has the best OEE, you are more likely to outrun the competition. Backed by faster production cycles, timely deliveries, zero downtime, and improved customer satisfaction, the probability of you having an edge over your market rivals is higher.
Enough theory, let’s get practical. Here are actionable tips you can implement right away to improve OEE:
Conduct routine preventive maintenance by following a daily or weekly machine maintenance checklist. For quarterly or annual maintenance, coordinate with the plant’s maintenance technician to establish a schedule.
Minimize equipment changeover time by employing SMED techniques. This involves strategies such as utilizing duplicate jigs and functional clamps, standardizing parts or features, and eliminating unnecessary adjustments.
Mitigate operator errors through comprehensive frontline training from the start. Utilize accessible and user-friendly training resources to ensure production operators can easily access, learn, and review reference materials. Utilize real-time data analytics for quick decision-making.
There are several methodologies in which OEE serves as a critical parameter. Lean manufacturing, Six Sigma, Kaizen, and Total Quality Management are the methodologies and approaches in which OEE is important.
Here are some examples that I have found useful in understanding the role of OEE in production.
Aligning with their aim to produce the highest quality products in the world, the Ford Motor Company took the initiative to transform its assembly line. With the use of Lean manufacturing, Six Sigma, and total quality management methodologies, Ford Integrated the concept of continuous improvement.
This implementation improved product quality, reduced costs, and decreased waste.
Toyota is the king of lean manufacturing. Creator of the Toyota Production System, the brand aimed to reduce waste from the manufacturing process. On top of Lean manufacturing, Toyota also used Just-in-time methodology, Kaizen, and Jidoka to minimize faulty products and implement continuous improvement.
The use of a just-in-time methodology model helped better control over inventory and prevented overproduction.
Though these three examples may not explicitly signal the improvement in OEE, the methodologies employed by them include OEE as a critical parameter.
The key element of your production system is the human workforce. No matter how advanced the technology gets, it cannot replace human creativity and on-the-spot smart decisions.
If I talk about the manufacturing process, several processes form a part of it, and all of them have to run smoothly to enhance overall productivity and efficiency. Hence, it becomes clear that leveraging advanced solutions is crucial for sustained success.
Plutomen’s Connected Worker Platform will be a great option, providing indispensable features to enhance your operational performance:
Hence, a connected worker platform provides all the essential tools for monitoring and performing your work with greater efficiency, ultimately improving Overall Equipment Efficiency with Industry 4.0!
Perform equipment maintenance, conduct inspections and quality audits to improve OEE.
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With more than 12+ years of experience in the world of enterprises, technology, and metaverse, Keyur Bhalavat is leading Plutomen to gain meaningful partnerships & to have a strong clientele network. He is one of the board members of GESIA (Gujarat IT Association Ahmedabad).
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