OEE Definition- How To Calculate OEE
OEE (Overall Equipment Effectiveness) is a widely used and well recognised KPI (Key Performance Indicator) metric which evaluates how effectively a production line is utilised.
The most widely used way to calculate OEE is calculated by multiplying three individual metrics : Availability, Performance and Quality.
OEE = Availability x Performance x Quality
Availability is a measure of the ratio of actual runtime to scheduled production time.
Availability = Total Line Runtime / Scheduled Line Runtime
Performance is a measure of the ratio of the line speed to the ideal line speed.
Performance = Line Speed / Ideal Line Speed
Quality is a measure of the ratio of total good units produced to total units started.
Quality = Good Count / Total (Good and Bad) Count
If we consider a simple example of a single standalone machine that is scheduled to produce 100 units of product per hour over an 8 hour shift. (for the purposes of keeping our example simple we will assume there are no scheduled breaks or no scheduled changeovers during our 8 hour shift).
Lets imagine now that we want to analyse what happened over one specific shift:
If we consider that the machine ran in total for 6 hours of this 8 hour shift.
When the machine ran it operated at a speed of 80 units per hour.
The machine produced 480 parts consisting of 432 good parts and 48 bad parts over the 8 hour shift.
We can now calculate OEE as follows:
Availability = Total Line Runtime / Scheduled Line Runtime = 6 hours / 8 hours = 75%
Performance = Line Speed / Ideal Line Speed = 80 units per hour / 100 units per hours = 80%
Quality = Good Count / Total (Good and Bad) Count = 432 units / 480 units = 90%
OEE = Availability x Performance x Quality = 75% x 80% x 90% = 54%
This means that we have produced 54% of the planned amount for our given shift.
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