5 OEE Calculation Best Practices in Manufacturing

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By Emilie A Lachance - August 08, 2019

Determining overall equipment efficiency (OEE) is crucial to maximizing factory efficiencies, so we tend to talk about it frequently. Not only is OEE a crucial measurement of performance, but it also can also be used to determine the financial impact of improvements.

To get your OEE results, you multiply availability, performance, and quality:

OEE = Availability x Performance x Quality

However, looking at a formula is one thing—applying it is another. The best way to truly understand how to calculate OEE is with a solid example. That’s why we’re going to dig in and analyze an example of OEE calculation so you can get a better idea of how it could work for your factory.

How to Calculate OEE in Real Life

We know that determining OEE requires three factors—here’s what they mean:

  • Availability: Run time or planned production time
  • Performance: Actual cycle time or ideal cycle time  
  • Quality: Good products or total products produced

If you’re wondering how this formula works in a real factory, here’s a real-life example.

Calculating the OEE of an Electronic Company’s Production Plant

Let’s use an electronic company’s production plant as an example.

This electronics company is open for 14 hours a day, but its manufacturing plant is scheduled to run 10 hours a day for 20 days in a month.

Availability: Plant Planned Production Time Calculation

Our planned production time is 200 hours a month because this is how much we plan to keep machinery actively running.

However, each workday, operators take a half-hour lunch break. Throughout the month, there are two hours of maintenance and adjustments planned between two days. Additionally, machinery breaks down for an average of three hours per month.

With a total of 10 lunch hours during the month, plus two hours of maintenance and three hours of equipment failure, we have a total of 15 hours of downtime per month.

15 hours / 200 hours = 7.5%. → 100% - 7.5% = 92.5% availability

Performance: Cycle Time Calculation

Our machinery could ideally complete 60 cycles per minute. However, in the past month, machines performed 52 cycles each minute. This is a much slower cycle and is reflected when we calculate the performance of our machinery.

52 cpm / 60 cpm = 86.6% → 86.6% performance

Availability: Good Products Calculation

It takes 50 cycles to produce any electronic; therefore, our production plant is producing roughly 62 electronics each hour. Multiplying that by 185 run time hours per month, we get a total production of 11,470 electronics per month. However, only 10,950 of these electronics are good to be sold.

This means:

10,950 / 11,470 = 95.5% quality

Our machines are available 92.5 percent of the time, their performance is 86.6 percent effective, and their product quality is 95.5 percent.

Let’s Calculate: OEE = Availability x Performance x Quality

Using the calculations we determined above, we have our OEE formula:

OEE= 0.925 x 0.866 x 0.955 = 0.765 → 76.5% overall equipment effectiveness

Although each factor’s individual metric had a relatively high percentage, when calculating OEE, we realize how much of a downgrading impact these have in the plant’s overall efficiency. 

Now, the question is how good or bad an OEE score of 76.5 percent is. For many manufacturers, this could be a satisfactory outcome, or at least a good benchmark. Here are the OEE score levels: 

  • 100%: Perfect
  • 85%: World-class level, and often a goal for discrete manufacturers
  • 60%: Typical, but with clear room for improvement
  • 40%: Low, but typical for factories that are measuring OEE for the first time

Using Digital Factory Technology and OEE Calculations to Improve Productivity

Digital factory technology is crucial for those who want to calculate an accurate OEE and know if each process is maximally productive. Using digital factory features such as automated data collection, real-time dashboards, and analytics reporting, managers can determine things like:

  • If small stops are becoming a big problem
  • What is causing slow cycles and speed loss
  • How well workers are following processes
  • What planned and unplanned downtime look like 

Find Out How to Calculate OEE for Your Plant

Worximity’s Smart Factory analytics can empower you to take control of your OEE score and start improving production and finding more efficiencies. Get started determining your own OEE score with our OEE calculator.

Download our OEE Calculator

Worximity provides simple realtime technologies to solve food processor pains such as downtime, rejects, waste, overtime; helping them gain profit velocity by improving throughput, yield and OEE.

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