Understanding OEE – the misunderstood measure

15 October 2018 Lean in Industry Blog
by Ross Kennedy, 15 October 2018


Overall Equipment Effectiveness or OEE is based on the premise that equipment is only effective when it is available as required, running at the ideal speed, and producing perfect or within-specification output.

OEE can be a powerful improvement tool if used correctly, however it should not be used as a comparative performance measure matching one machine or line to another.

Too often misguided managers go looking for the simple measure that they can focus-on to compare performance, however, in reality there is no one measure that tells the full story.

A suite of performance measures which are aligned to your site’s Key Success Factors of Operations are required to capture all opportunities for improvement in an operation.

To support the Business Improvement journey to Operational Excellence we have found OEE (plant & equipment focused), Lead Time Reduction (process focused) and Time Lost (people focused) are the drivers to improve, not measures to be compared.

Production, not maintenance, must be accountable for OEE performance with all other departments assisting them to achieve agreed targets of closing the gap to the OEE Ideal Vision for each line or machine.

The OEE Ideal Vision should be based on agreed assumptions supporting business requirements such as do we stop for breaks, how many set-ups or changeovers are required, what yields losses are inherent in our process.

Each of the 7 Losses: Planned Downtime, Set-up or Changeover Downtime, Unplanned Recorded Downtime, Minor Unrecorded Stoppages, Reduced Speed, Rejects & Rework, and Start-up & Yield Loss should have an agreed documented target outlining the assumptions used so that as business requirements change, such as adding more products to the line requiring more set-ups or changeovers, the assumptions and targets can be adjusted.

It is important to establish an understanding of OEE throughout the entire workforce so that OEE does not become ‘the most misused and abused indicator of equipment performance’ at your site.

If you would like to learn more about CTPM – The Centre for Australasian TPM & Lean, and our approach to OEE, contact myself Ross Kennedy at ross.kennedy@ctpm.org.au or purchase my OEE book using this link.

This was a review of the “Understanding, Measuring, and Improving Overall Equipment Effectiveness” book, published by CRC Press Taylor & Francis Group – Productivity Press.
OEE Book Cover

 

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