OEE Update

Lately I’ve been asked to comment and give talks on OEE (Overall Equipment Effectiveness) and the missed opportunities within Manufacturing, I include Logistics with this as well, under the OLE measure (Overall Logistics Effectiveness), so decided to do an update. (Original article ‘Click Here‘)

OEE as I’ve previously stated is one of the key KPI’s (Key performance Indicators) I always use in helping me understand the problems and issues within my production operations.

Industry Standard is between 45% and 65% OEE, that means there is an whole other factory waiting to be tapped into and used more effectively.

Below is a short video of an excel spreadsheet I decided to put together that gives some automation and storage of information for use, test on a bottleneck process or production line/cell, if you would like a copy of the spreadsheet, please fill in the form below and I’ll send it to you.

My belief with OEE, is test first, develop your front line team in understanding the technique and highlighting the problems, you can then go fully automated at a future date, but do not miss the step of developing your team.

I’m sure someone can make a better job of the excel automation than me, but it’s there if you want it.

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Improve Productivity

Copy and Deploy the ultimate productivity swipe file to reduce costs and increase efficiency of your processes.

OEE (Overall Equipment Effectiveness) is a “best practices” metric for monitoring and improving your manufacturing processes (i.e. machines, cells, production lines…). OEE is simple, practical and powerful. It takes the most common sources of manufacturing productivity losses and places them into three categories: Availability, Performance and Quality.

This swipe file will help in understanding the data required to monitor your machines and manufacturing processes in shifting towards IR4.0 and taking the next step in fully automating the data collection.

For further reading on OEE “click here

OEE - Improve Manufacturing Productivity

Benefits of OEE

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Overall Equipment Effectiveness

A Good Place to Start for Productivity Improvements

OEE (Overall Equipment Effectiveness) is one of the main measures I use within a Manufacturing Business, but it can be adapted to service as well.

  • Does your production have bottlenecks you’re not aware of?
  • Could one machine be dragging down the entire facility?
  • Do you know if your equipment has excess capacity that could be easily and inexpensively tapped?

Overall Equipment Effectiveness Losses

OEE is simple and practical. It takes the most common sources of productivity loss and places them into three primary categories, it distils them into metrics that are an excellent gauge for where you are now and more importantly where you need to improve. There are other forms of effectiveness calculations for the supply chain, these are explained at the bottom of this article, but for now it’s back to OEE.

How we make O.E.E work?

  • Must be easy to use
  • All data must be accurate
  • Data must be easy to collect
  • Must involve all cell members
  • You need to react to the results

The three categories being:

  • Availability (%) – The percentage of the planned production time during which the cell could be productive.
  • Effectiveness (%) – The percentage of planned production time during which the cell was actually productive.
  • Quality (%) – The percentage of the total shift time that a cell is producing quality components.

For the Ultimate Productivity Swipe File – ‘click here

So how do we calculate OEE,


Total Shift Time – Planned Non Productive – Breakdowns – Changeovers – waiting / Total shift time – Planned Non Productive


Total Parts Produced x Cycle Time / Total Shift Time – Planned Non Productive – Breakdowns – Changeovers – waiting


Total Parts Produced –Scrap/Rework / Total Parts Produced

Overall Equipment Effectiveness Template

These three primary categories (as a percentage) multiplied together = OEE.

Total Shift Time 600mins
Planned Non Productive 60mins
Total Downtime 0mins
Waiting 20mins
Total Pats Produced 395
Cycle Time 1min
Scrap 89

Availability = 600-60-20 / 600-60 = 520 / 540 x 100 = 96%
Effectiveness = 395 / 520 x 100 = 76%
Quality = 395-89 / 395 = 306 / 395 x 100 = 77%

OEE = 96 x 76 x 77 = 56%

There are different ways to use the calculation within the supply chain, the following are examples

Goods Inwards

Components Available for use X On time Delivery Performance X Quality of Incoming Goods

Outgoing Performance

Customer Availability of Supplied Goods X Delivery Performance X Quality of Shipped Goods

Overall Supply Chain Effectiveness

You can also measure the supply chain from a Quality, Cost, Delivery point of view as well using OEE, OLE (Overall Logistics Effectiveness) and OPE (Overall Purchase Effectiveness) these three multiplied together forms the Overall Supply Chain Management Effectiveness.

World Class OEE

Rule of thumb states that World Class OEE levels are 85%. But industry average is spoken about at 60%, so room for improvement. How’s yours?

0330 311 2820

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