Calculating Overall Equipment Effectiveness

Overall Equipment Effectiveness (OEE) is an important metrics that helps organizations analyze and optimize equipment usage. OEE evaluates equipment availability, equipment performance and the quality that’s produced. The metrics offers a high-level overview of the efficiency of organization’s equipment.
Why Measure OEE?
OEE is a common key performance indicator (KPI) throughout all industries. With lean manufacturing initiatives, by benchmarking OEE, one gets insight into maintenance successes, or gets the ability to identify needs of improvement.
By understanding the effectiveness of the equipment in availability, performance and quality areas, it is easier to pinpoint the spots needing specific improvements, Such as, if focus is on performance, one can watch and review the largest impact on production output.
Why Measure OEE?
OEE= Availability * Performance *Quality. The preferred way to calculate OEE is by breaking it down into three loss factors:
Availability Loss
Performance Loss
Quality Loss
OEE Can Be A Benchmark And A Baseline
The benchmark can be used to compare performance of production assets to industry standards, or in-house assets, or to results for different shifts working on the same assets.
When looked at as a baseline, over time, it can track progress and shows the removal of waste from an asset.
OEE Benchmarks:
For a perfect OEE score, a machine must manufacture 100% availability (that means no stop time), have 100% performance (the machine must go as fast as possible), and receive 100% Quality (products that can be sold).
Availability, performance and quality is the simple formula and as a result, OEE is a powerful tool that helps companies define, visualize and ultimately eliminate losses and waste. So what is a “good” OEE score?
OEE score of 85% is a suitable long-term goal.
OEE score of 60% is typical but indicates room for improvement.
A score of 40% is not uncommon when a company is starting to track and improve manufacturing performance.

Infographic source: https://www.downtimecollectionsolutions.com/calculating-oee/