OEE is an effective methodology to help improve the productivity of manufacturing processes and accurately measure true plant productivity. Its measurable components are availability, performance and quality.

Whether the directive has come from above, being driven by a local team or is a vehicle to drive the organisation’s strategic ambitions, Overall Equipment Effectiveness (OEE) is the Key Performance Indicator that can give manufacturers an edge over the competition.

However, if it is not understood correctly, misinterpreted, not acted upon, or does not have the backing of all of the stakeholders it is likely to be a measurement that is of little help in either increasing production, reducing downtime, improving quality or reducing waste.

In order to engage your stakeholders, and understand this important measurement let’s look at the myths and misinterpretations that surround it.

OEE is an effective business performance tool which aims to provide real-time accurate information about the manufacturing process as a whole. Often when issues occur within manufacturing, because of time, resource and production pressures, quick fixes might be applied, which gets the production lines flowing again, but do not address the root cause, and the same problem occurs time and again.

With so many different variables involved within the production process such as resource, machinery, time available, availability of raw materials, human error, and each of them having the propensity to stop production, it’s not surprising that in order to get production quotas out of the door, short cuts might be taken with a view to dealing with it properly at a later date.

If the core elements of OEE (availability, performance and quality) are measured in real-time, they can provide the background information needed in order to be able to identify any core issues and highlight opportunities for improvement.

The OEE score on its own does not mean very much, whereas having the background information to examine each variable and its impact within the whole production cycle is certainly more valuable for production managers.

1. OEE is just a measurement which the bosses use to find the weakest links in theproduction process

2. There are systems which measure OEE, so isn’t it just a case of integrating the software?

The 10 myths of OEE debunked

A software solution that measures OEE can tell us most of the information, it can tell us how many units we’ve produced to the nearest 1, and the downtime for the day to the nearest second. But, whilst it can be accurate it will lack depth and

context, for example, a machine can tell you it stopped for 32 seconds because the emergency stop button was pressed, but only the operator can tell you why they pressed it.

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There is a balance to be struck between automatic data capture and human input.

No matter what systems are in place you have to have the buy-in from your staff to enable the systems to work for you. Shop floor operators and supervisors need to understand how OEE can affect their work and so training is imperative. How OEE measures the underlying losses, such as Down Time, Changeover Time, Small Stops, Slow Cycles, Start-up Rejects, and Production Rejects should be emphasised to stakeholders.

If production improves in a sustainable manner, as a consequence of measuring OEE and acting on the information provided, organisations could produce more goods, improve quality or increase capital spend. In the case of most manufacturing plants, it would be unlikely that they would hold production at a particular level and reduce permanent headcount unless there is no growth available within their particular market.

If you do collect data (even manually), but it is only reviewed at the end of the week, you have already lost the opportunity to make a difference in the week just gone. Or, if you have already produced a 500 tonne batch and then get a poor quality review, there will be a lot more scrap than if you had reviewed at two tonnes, All of this increases cost, frustration and avoidance of the underlying issues.

5. We will need more resources toaccurately measure and act upon OEEIf you know what you are measuring and why, and it is presented in the correct format for the correct person, then reviewing the data and spotting trends should be far less costly than not measuring OEE at all. By not measuring OEE you could be missing lots of opportunities to improve.

Manually measuring OEE is a great start, but it can have its drawbacks, such as inaccuracy, human error and its tendency to not be reviewed properly.Moving to an automated OEE data collection does have many benefits and reaps richer reporting, improved downtime accuracy, detailed information on slow cycles and minor stops, real-time metrics and analytics and easy access to historical data.

3. Measuring and improving an OEE score will mean job losses

4. Measuring OEE will mean more timemeasuring and less time producing

6. OEE data is always misused or misinterpreted

OEE data is sometimes misused or misinterpreted. Improving OEE is often a KPI that is expected of managers without context or background. The OEE score then just becomes a number, that needs to be reached per shift.

Judge someone by their OEE score and you are likely to get a higher score, but maybe not one you would want. A manger may well improve the OEE score on the poorest performing line, but if that line is not of strategic importance to the business and the improvement was only made to fulfil an objective, then continuous improvement will not occur and OEE will fall by the wayside.

OEE is most effective when used for its original purpose as a metric that gauges progress in improving the effectiveness of a manufacturing

process (e.g. as used in TPM programs). OEE must be considered as one part of the journey to continuous improvement. Improving OEE is only meaningful within the context of your business objectives and strategy.

7. Measuring OEE is divisive between departments and shifts, and it creates issues withmoraleUnderstanding OEE can be extremely complex and so training is needed for those that will be involved in the collection and analysis of the data.

For the shop floor, setting OEE targets may not be relevant and the number alone does not tell the whole story without analysing the underlying concepts.

If you wanted to use OEE as a motivating tool, it might be better to focus on efficiency, comparing actual performance to target performance. This approach enables operators to achieve 100% of target. When operators see this data in real-time it can be very motivating.

Any targets set must be meaningful, achievable and ultimately drive improvement. Employees that can see their results, and have the autonomy to suggest improvements, will be far more motivated than those that just get measured on the one figure of OEE, without the opportunity to be part of the solution.

Short Interval Control is a great way to encourage solutions and improve production, because it focuses on short and quick reviews of performance data during the shift to enable immediate small-scale fixes that collectively result in significant improvements in OEE.

8. OEE is an indication of profitability and organisational health

OEE has no connection to the financial health of an organisation. OEE does not include financial data. OEE does not take into account cost of materials, cost of resource or the margin made on each unit. Therefore, maximising the OEE of an asset is not the same as maximising the profitability of an asset.

It is possible to have a very low OEE score for a particular machine, for example, if the part is of high value but produced in low-volumes, it may be extremely profitable. You can also have a very high OEE score, but if the raw material costs exceed the finished goods market price, it will never be profitable.

However, if you improve your OEE number by a certain percentage, you are likely to see some corresponding improvement in profitability.

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Cimlogic provide a wide range of solutions that help our customers achieve the many challenges faced by today’s manufacturers. Our experts offer complete manufacturing improvement solutions and support to improve efficiency and maximise productivity; ensuring optimum performance and fast ROI.

The focus of our business is driving World-Class Manufacturing through Operational Excellence (OpEx); Operational Technology (OT); Manufacturing Execution Systems (MES) and Manufacturing Data Analytics, backed by comprehensive Operational Support services.

Further informationIf you would like further information about how Cimlogic can help drive manufacturing productivity visit our website www.cimlogic.co.uk drop us an email enquiries@cimlogic.co.uk or give us a call on+44 (0)1274 599955.

10. If I highlight our current OEE score to the board, I will be sacked.

There are many references to world class OEE being 85%. It is a compelling and completely artificial benchmark. By contrast, most manufacturing plants have an OEE in the range of 30 – 60%. It is not unusual for these plants to experience daily fluctuations of about 10% - whatever the score, there is always room for improvement.

The OEE score on its own, does not tell the whole story, you must look deeper into the three values that make up this number to really understand what’s happening with your performance and understand the real successes and opportunities for improvement.

If you are within the range of 30 – 60%, it might seem like a daunting task to improve, but the good news is that by measuring OEE and acting upon the data, you should be able to make significant improvements very rapidly, and your bosses will be impressed!

For a discrete manufacturer to achieve an OEE score of 85% is a noteworthy accomplishment. But you would still want to improve on that, after all, you are still experiencing a 15% loss.

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9. If machinery is new, regularly maintained and still under warranty, why should webother with OEE?What machine manufacturers tell you is not always strictly true. They may claim that machinery will run at a particular speed, but that will depend on many other factors, such as the quality of materials, human interaction, whether the raw materials needed are available and so on. OEE not only measures the speed of the machine/line but also minor stoppages, no matter what the cause. So you might have an expensive, new labeller, but if the labels are not available for the machine to use, then the machine will not be running as consistently as you have planned it to be.

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