OEE Indicator – What is it?

OEE (Overall Equipment Effectiveness) is one of the indicators used in the lean management concept to measure the degree of machine utilization. How to calculate the Total Equipment Effectiveness and how to use this measure?

The OEE indicator, often used in lean companies, consists of three lower-order indicators: availability, efficiency and quality of machine work (Availability, Effectiveness and Quality). Availability is an indication of the extent to which the machine has managed to complete the planned working time on a given machine. The indicator is expressed by the formula A = APT / PBT, where APT (Actual Production Time) is the actual machine working time, and PBT (Planned Busy Time) is the planned working time, and A means Availability.

The efficiency marked with the letter E, in turn, indicates to what extent the number of products produced by the machine at a given time corresponded to the plan. In other words, this measure tells whether the production of one product is taking as long as it should. The index is calculated by dividing the planned unit time by the quotient of the actual machine working time and the number of manufactured products. The formula takes the following form: E = PRI / (APT / PQ), where E is Effectiveness, PRI – Planned Run Time per Item, APT – Actual Production Time, and PQ – the number of manufactured products (Product Quantity).

The last indicator subordinate to OEE is quality: Q. It tells about how many manufactured products comply with the quality requirements. It is calculated by dividing the number of good products (GQ) by the number of total products (PQ). The formula takes the following form: Q = GQ / PQ. Management software such as Kanri Soft allows you to automatically collect and archive the information necessary to calculate the machine’s operation’s availability, performance and quality. As a result, it will enable you to calculate OEE, track changes in the indicator value over time, and diagnose the effectiveness of the introduced improvements.

If the work schedule is not exceeded, all sub-indexes fall into the range 0 to 1. In this case, the value of OEE, which is the product of A, E, and Q, will also fall within this range. OEE at 100% stands for an ideal production in which only good quality products are manufactured as quickly as possible and without any downtime. A good production is generally considered to be one in which the OEE of the machines reaches the value of 85%. In this case, availability reaches 90%, efficiency 95%, and quality 99.9%. The average value of enterprises with a significant development area is OEE at 60%.