Mar 8 2014
Is OEE a Useful Key Performance Indicator? | Jeffrey Liker
See on Scoop.it – lean manufacturing
- OEE = Availability x Performance x Quality
- Availability = run time/total time
- Performance = Total count of parts/target count (based on a standard)Quality = Good count/Total count
Ignacio S. Gatell questions whether companies using OEE really understand it, can explain it clearly to their customers, and understand what it means to compare OEE as a KPI across plants. He questions whether even plant managers understand how it is calculated and what it means.
The only good argument for OEE is that at a macro-level in a plant it provides a high level picture of how your equipment is functioning.”
About 15 years ago, a summer intern came to work at a client plant in aerospace machining. I thought a great project for him would have been to identify a common tooling package for machining centers that were grouped in a “Flexible Manufacturing System” (FMS). It was challenging, but it would have actually given the FMS the flexibility it was supposed to have. It was a real engineering project that would have improved performance.
Management, however, decided that a better use of his time was to collect data and calculate OEEs for another set of machines. It did keep the student busy all summer, but resulted in no change, and no improvement bragging rights for the student.
I have had a problem with OEE ever since. It is an overly aggregated and commonly gamed metric that you can only use by breaking it down into its constituent factors; you might as well bypass this step and go straight to the factors.
Among these factors, I find Availability to be most often confused with Uptime. The availability of a device is the probability that it works when you need it, and the total time in the denominator has to be the time you need it for. For example, if you work two shifts a day, the availability of a machine is not affected by your taking it down for maintenance on third shift. There have been cases of managers overproducing to increase run time and thereby boost the OEE of their machines…
See on www.industryweek.com
March 8, 2014 @ 7:24 am
It seems to me that OEE is really only useful when you are trying to determine the amount of safety stock to keep in a just in time operation. There would seem to be an inverse relationship between safety stock and OEE (which doesn’t exist between safety stock and the component parts of OEE). This measure is often introduced in a lean implementation at an early stage, to work out the amount of improvement needed before JIT can be attempted. Without striving for zero inventory, I would agree that OEE doesn’t serve much purpose.
March 8, 2014 @ 8:58 am
In my previous job we didn’t use OEE as a KPI, but three different performances, and this gave more precise information about what kind of waste we were producing:
1º we measured the saturation of the furnace, considering that the design of the furnace gave us a maximum melting capacity that we had to reach through the increase of the production speed of the forming machines. That was a measure of availability, not referred to time but to capacity.
2º Another KPI was called the weight performance, as the product, produced with molds, increased her weight over theoretical as the molds worn.
3º and we had a third one, properly called performance, that measured took in account all the losses related to quality, downtime, maintenance and change overs.
The aggregation produce a loss of information: origins, strategies to improve… Sometimes the reason of the aggegation is not to have the different factors, But what it has no sense for me is to have KPI that management doesn’t understand, because it is the good knowledge of the business and of the process what should give the good KPI to manage.
March 13, 2014 @ 3:27 pm
OEE is the most misused and abused indicator around, however if properly used it is a very powerful tool to assist sites that are dependent on equipment performance, on their Operations Excellence journey. If any one is interested in a paper on this topic please contact me at: [email protected]
Summary of the paper:
March 14, 2014 @ 6:31 am
When I wrote Working with Machines, I realized that OEE was a topic that needed to be covered. As my colleague Jose Ignacio Erausquin, from Asenta, had more use for it than I did, I asked him to write this chapter.
The abstract is as follows:
September 20, 2019 @ 11:40 pm
Worth reading!! Thanks for sharing the information!! Every manufacturing industry must focus on the KPIs to improve the productivity and ROI of their industry. Overall Equipment Effectiveness (OEE) is a holistic KPI and one must not ignore it. You must know how to measure the things with the help of OEE, a wrong approach can leave a big dent on your ROI. I am using an OEE calculation and downtime tracking software by “Thrive” and found it awesome.