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How to Calculate OEE

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By Emilie A Lachance - August 08, 2019

We have talked about Overall Equipment Efficiency (OEE) and different OEE terms in the past. However, there is no better way to understand and apply knowledge than by reading and analyzing an example. Here we go through a sample OEE calculation so that you can understand OEE more easily!

We know that OEE is the percentage that results from the multiplication of Availability, Performance and Quality. 

OEE = Availability * Performance * Quality

These three OEE factors are calculated from a different set of ratios:

Availability is Run Time / Planned Production Time

Performance is Actual Cycle Time / Ideal Cycle Time

Quality is Good Products / Total Products Produced

Knowing these concepts and their components, how do we apply them in a real-world example?

Let’s think of an electronics company’s production plant, for an example of an OEE calculation.

Our electronics company is open for 14 hours a day but its manufacturing plant is scheduled to run 10 hours a day for 20 days in a month. Our Planned Production Time is 200 hours a month, as this is how much we plan on keeping machinery actively running. However, each work day, operators take a half-hour lunch break. Throughout the month, there are 2 hours of maintenance and adjustments planned between two days. Also, machinery breaks down for an average of 3 hours per month. Taking into account a total of 10 lunch hours during the month, plus 2 hours of maintenance and 3 hours of equipment failure, we have a total of 15 hours of downtime per month.

15 hours / 200 hours = 7.5%. → 100% - 7.5% = 92.5% availability

We know that our machinery could ideally complete 60 cycles per minute. However, in the past month, they performed 52 cycles each minute. This is a much slower cycle and is reflected when calculating the Performance of our machinery.

52 cpm / 60 cpm = 86.6% → 86.6% performance

It takes 50 cycles to produce any electronic. Therefore, our production plant is producing roughly 62 electronics each hour. Multiplying that by 185 run time hours per month, we get a total production of 11,470 electronics per month. However, only 10,950 of these electronics are good to be sold. Therefore:

10,950 / 11,470 = 95.5% quality

Our machines are available 92.5% of the time, their performance is 86.6% effective and their product quality is of 95.5%.

Now, we are ready to calculate OEE.

OEE= 0.925 * 0.866 * 0.955 = 0.765 → 76.5% Overall Equipment Effectiveness. 

Although each factor’s individual metric had a relatively high percentage, when calculating OEE, we realize how much of a downgrading impact these have in the plant’s overall efficiency. 

But, how good or bad is a 76.5% OEE? You can see average OEE rates in our related blog, Average Manufacturing OEE in US. You can learn more about Measuring OEE using Smart Factory Analytics here.

OEE is key for evaluating a production plant’s efficiency and therefore should be monitored closely. Equipment Availability must carry a big weight when analyzing OEE’s factors, as it is the one that will allow a longer run time for future improvements.

To learn how one company drove business changing OEE rates, read the case study here.

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