Emphasizing The "Overall" In OEE Could Be A Mistake For Manufacturers

By Trisha Leon, contributing writer

For your manufacturing customers concerned with making data-based decisions, Overall Equipment Effectiveness (OEE) is probably a top concern. Dan Miklovic explains in a blog for LSN Research that OEE is simply “a measure of a piece of equipment’s effectiveness calculated by taking the product of the availability of the equipment, the quality of the product produced on the equipment, and the performance as compared to theoretical maximum capacity.” (For calculations, click here.)

There is wide variation in manufacturing from industry to industry, but LSN Research’s benchmarking data shows that people have begun to put emphasis on the “O” and ignore the “E’s.” Miklovic writes, “The trend is for manufacturers to take their total output, average availability of all the equipment and planned design production capacity, and generate a single OEE metric for the entire operation.” Miklovic believes this approach is wrong and offers advice on how to use OEE correctly by measuring how effectively every single piece of production equipment is being used to execute its intended purpose, not how effective the aggregation of the manufacturing process is.

In order to use OEE to drive performance improvements, Miklovic believes businesses must go back to the E’s. He explains how to use OEE as a way to measure asset performance which impacts availability, product quality, and production capacity and is ultimately an excellent measure of individual equipment performance. Since higher performing assets produce fewer defective products and machine center throughput is also increased, Incorporating OEE into an asset management approach also provides improved quality.

By tracking OEE for each individual piece of production equipment and as part of a continuous improvement cycle, your clients can strive to maximize its performance. Thus OEE becomes one of the key metrics to use in overall asset performance management programs. Make sure you work with your clients to ensure solutions provide the specific, valuable data they need.