Created by Seiichi Nakajima as part of his TPM (Total Productive Maintenance) methodology, the term OEE is an abbreviation for “overall equipment effectiveness” and is considered a metric used in industry to measure the effectiveness of the execution of manufacturing processes.

Measures the percentage of scheduled time that the equipment is available to operate. Discuss downtime.

Evaluates how well the machine operates when it is running. Highlight cycle time and speed.

Considers the ratio of good products produced versus total products. Address defect rates and scrap.

Increased efficiency reduces operating costs by reducing downtime, waste, and rework. If you believe that OEE is only a process indicator, consider that in the industry, a 1% lost OEE can translate into hundreds to thousands of dollars, depending on the industry and business.

Improved OEE means greater performance with the same resources. The benefit of improving OEE can be reflected in doing more (producing better and with more volume and quality) with less (less time, effort, costs, and errors).

Companies with medium to high OEE deliver products faster, with better quality, and without delays, which gives them an advantage in the market and improves customer satisfaction and acquisition.
This can often be achieved using OEE software solutions that provide real-time data on machine performance, downtime, and production issues. This gives you visibility into where losses occur and allows for faster decision-making.
With an OEE index in the medium to very low range, your first step should be to identify which of the three pillars of OEE (availability, performance or quality) is contributing the most to overall inefficiency, that is, which of them has the lowest value as a ratio. This pillar or pillars should be your immediate priority for improvement, as it would represent the weakest link(s) of your entire operation.
Focus your attention with a targeted approach, take action on that pillar of low performance by analyzing the root causes of inefficiency. For example:
a. Availability problems arise (many times) due to frequent unplanned shutdowns, long changeovers or maintenance delays.
b. Performance problems can be caused (in general) by machines that operate below their design speeds, maintain micro-stops, or slow cycles. Quality problems could be due to high defect rates, excess scrap, or frequent rework.
When you use this approach of focusing on the specific pillar that is underperforming you get better results such as:
If you obtained an OEE in this range, your production is relatively efficient, although there is considerable room for improvement. Although you may think you have a good range, consider it important to avoid complacency and seek to achieve higher performance and continuous improvement.
Your company may lose focus on improvement by being in a comfortable range. Always prefer to increase general coherence in all pillars and eliminate the “small leaks” that prevent you from achieving higher OEE target levels.
Any company that is in this range deserves congratulations; if you are within the range, you can consider that you are within the world-class for OEE. While reaching 100% is often considered unrealistic (often considered unattainable), being in the 85%+ range would mean your company is among the best in the industry. At this point, your operation is highly efficient, but as is commonly said, it may be less complex to get there than to maintain it, so your attention should focus on maintaining this level while seeking incremental profits that reflect said OEE level financially.
Example: Plan time-based (weekly, monthly, semi-annual, and annual) or usage-based (numbers of work hours) periodic checks for machine lubrication to reduce unplanned downtime.
1.2 Minimize changeover time: Use SMED (Single minute die exchange) techniques to reduce changeover times.Example: Organize tooling, parts, and components needed for the next product run (order) before the current or previous run (order) ends.
1.3 Improve scheduling accuracy: Ensure accurate production schedules and avoid machine downtime between orders.Example: Look for a lower rate of change and wait between orders using a consistent schedule to avoid machine downtime.
1.4 Monitor and optimize downtime events follow-up: Track and analyze all reasons for downtime to implement targeted improvements.Example: Use a downtime tracking system to track the events, detect trends in the data, and identify areas of opportunity to reduce the root causes of unplanned downtime.
1.5 Implement autonomous maintenance: Train operators to perform basic maintenance tasks that help avoid downtime.Example: Clear maintenance procedures or electronic operating systems (electronic SOPs) can help operators perform simple tasks that prevent major problems.
2.1 Reduction/control of cycle time: Analyze and optimize machine speeds to minimize time per unit.
Example: Do tests or consult your manufacturer to make machine configuration adjustments that optimize speed without sacrificing quality. Consider the capacity limit with necessary quality as a setup margin.
2.2 Eliminate micro stops: Identify and solve small stops (no matter how minor) whenever they slow down production.
Example: A small but recurring problem can be more damaging than an unusually large one; a sensor that fails every 100 pieces in production of millions for a second is more worth it than trying to solve an unusual event that lasted 2 hours.
2.3 Optimize flow and availability of materials: Guarantee materials always available, at the right time and place.
For example, use a Kanban system to avoid material shortages or apply a stock check before starting.
2.4 Improve operator efficiency: Train your operators or equip them with accelerated execution models to make their execution more efficient and minimize delays.
Example: Implement electronic continuous training systems, use guided operating systems, or support processes with electronic procedures to reduce operator errors that cause slowdowns.
2.5 Standardize best practices: Develop and enforce standard operating procedures to ensure consistent performance.
Example: Design and use understandable standardized procedures that contain checklists and information tracking with the option of continuous improvement and direct communication. A standardized operation guarantees adequate and consistent results for its objectives.
3.1 Implement real-time quality monitoring: Use sensors and software that allow you to evaluate quality during production.
Example: Installing a vision system that rejects defective parts, adding an automatic good parts counter, or an electronic reporting system for the acceptance/rejection of parts will allow you to manage your quality more efficiently and actively.
3.2 Reduce process variability: Standardize and control process parameters to ensure consistent product quality.
Example: Apply statistical process controls (SPC) by monitoring equipment sensors and use that analysis to adjust machine settings based on real-time data.
3.3 Train the operator in solving quality problems: Provide exhaustive training on machine operation vs quality standards.
Example: Train your operators on how to detect and prevent defects during production and train them on how to solve them or provide correct follow-up.
3.4 Implement RCA (root cause analysis) for defects: Analyze defects to find and fix the root causes of problems.
Example: Use fishbone diagrams to investigate and resolve recurring quality problems or apply cause trees to find root causes.
3.5 Automated inspections: Automate inspections in early strategic areas to detect defects in the early or key stages of the process.
Example: Break down your process into key quality pain areas and consider strategic inspection points where you can integrate in-line inspection cameras to detect defects before products reach final inspection.
To answer the question: What should be my OEE objective? It can be complex but can be easily solved if you consider that there is a ratio parameter usually used to quickly define this objective; consider that, as you can imagine, it is impossible to be infallible, so normally, set your objective and efforts to achieve an OEE value of 85%, considering that it would place you as a world-class company (an aggressive objective and usually considered as a reference for maximum performance in any industry).