OEE is a key performance indicator that companies can use to measure their overall effectiveness. In this article, we go into the details of how OEE works and why manufacturing leaders should be using it to track progress and improve efficiency.
Why Is OEE The Best Metric For Manufacturing Improvement?
Overall equipment effectiveness is a measurement of how well a manufacturing operation utilizes its equipment. Measuring both efficiency and productivity enables manufacturers to identify areas in which they can make improvements.
OEE is the most common way to see how effectively your equipment is working and therefore how much potential it has. It aims to reduce waste, thereby lowering costs while also improving productivity.
The second-order benefit of using OEE is that it can extend the useful life of equipment through increased awareness and focus on machine health and productivity.
OEE: Lean Manufacturing Metric
Lean manufacturing is all about eliminating waste, and the thinking behind lean manufacturing presumes that everything can be continuously removed which is unnecessary. OEE is a great tool to use in this effort because it allows manufacturers to understand and quantify the sources of the six big losses.
What Industries Best Suited to OEE?
Although we would love to say all industries are suited to using OEE, we think it has a sweet spot: industries with expensive machines, high output, and a higher degree of automation. Nevertheless, our experience shows that with creative approaches, you can apply OEE as a concept to almost any production process.
On the other hand, manufacturers with repetitive, discrete, and batch production are ideal. An example of this would be an oil refinery. Although it is true that oil refineries have expensive machines, high output, and a high degree of automation, the difference is the use of a continuous production process.
Continuous production does not have units that are easily distinguishable, recognized, touched, and counted. This makes calculating overall equipment effectiveness more complicated than calculating the OEE of a single machine.
A Better Approach to Production Monitoring
Manufacturers should use an OEE system in manufacturing to improve throughput and meet customer demand. Automated data collection and real-time production monitoring are important for manufacturers to stay competitive.
Production downtime, breakdowns, or smaller issues might not be noticed, and if they are, they could be deemed irrelevant and not reported. Manual data collection is time-consuming, not value-added from a lean perspective, and has more opportunities for human error.
OEE is used in a variety of industries, such as food, metal, pharmaceutical, and plastic manufacturing. This is due to OEE’s usefulness as a universal KPI and as a lean tool to eliminate waste through continuous improvement of the production process.
