OEE means Overall Equipment Effectiveness. It’s the gold standard for facility managers trying to track their performance, and helps identify areas with room for improvement.
OEE is closely related to two other maintenance KPIS, the TEEP and the OOE. But let’s not get ahead of ourselves. Before we explain the difference between OEE, TEEP, and OOE, there’s some ground we need to cover.
First, what is OEE?
OEE assesses how well equipment is performing based on its availability, performance and quality.
What does this mean? Availability is the amount of time equipment is available to perform its function. Performance is how long it takes to complete a process or cycle. Finally, quality is the number of units with, well, acceptable quality.
After you calculate each of these metrics, OEE calculation is pretty straightforward: multiply availability, performance and quality. We’ll look at an OEE calculation example to explain how to calculate availability, performance and quality.
How to calculate OEE
Imagine a normal workday from 9 to 6 with a 1-hour lunch break. The scheduled operations time is 8 hours – 480 minutes. The number of pieces produced should be 19690.
However, when you add up employee shift changes, and the time the machine takes to power up, it accumulates to 47 minutes of downtime. The actual production time is then 433 minutes.
As a result, the availability will be 433 (available time)/480 (scheduled time)= ~0.902 (90.2%)
Now, to calculate the performance, let’s consider that the ideal production time of each piece is 1.3 seconds. We need to multiply this time by the number of pieces produced, and divide it by the actual production time: (1.3* 19690) / (433 * 60 seconds) = 25597/25980 = ~0.985 (98.5%)
During that day, 19690 pieces were produced. 19270 of these are in perfect condition, and 420 are defective. The quality index will be 19270/19690 = ~0.979 (97.9%)
The OEE formula is availability x performance x quality. So, the OEE is 0.902 * 0.979 * 0.985 = ~0.87 (87%)
Why is OEE important?
As a rule of thumb, aim for an OEE of 77% or greater. World-class companies have an OEE of about 85%, while average companies achieve only 40%. The good news is that, once you calculate availability, performance, and quality, you’ll get a clearer picture of what’s underperforming. Each should be at 90, 95 and 99%, respectively.
Having an OEE of 100% means zero defective products, zero breakdowns, and a manufacturing process that’s as swift as possible. If this sounds familiar, it’s because OEE is a concept that actually originated with TPM and lean manufacturing.
What is TEEP?
TEEP means Total Equipment Effective Performance. The major difference between OEE and TEEP is the time taken into account when calculating availability. While the OEE calculates availability by taking into account only the planned production time, TEEP uses all available time – that is, 24 hours a day, 365 days a year.
How to calculate TEEP
Let’s continue with the same example. After detecting that one of the biggest issues with the factory was too much downtime, the maintenance manager took steps to improve that matter. A few months later, the average downtime per day was only 20 minutes.
This means that the actual production time has risen to 460 minutes. Consequently, availability became 0.958 (95.8%).
Additionally, the number of pieces has risen to 20936 pieces per day – of which 20307 pieces are in good condition and 629 are defective. The quality score is 0.97 (97%). The performance remained stable at 98.6%. The daily OEE became 91.6%.
The TEEP is = 0.986 * 0.97 * (460/24 hours *60 minutes) = ~0.306 (30.6%).
The company still has plenty of room to grow — even without acquiring new equipment or facilities.
OEE vs. TEEP
Note how the OEE gives you an idea of the maximum production capacity, whereas the TEEP is a good indicator of the scalability of your business. If you have a high OEE but a low TEEP, it’s time to consider extending shifts, creating a new shift (for example, at night) or start operating on weekends.
If both indicators are high and you still can’t meet demand, congratulations! Your business is growing and will need new means of production soon.
What is OOE?
OOE means Overall Operations Effectiveness. Again, the difference lies in how we calculate the availability of certain equipment.
While the OEE takes into account the planned production time, OOE will use scheduled and unscheduled time, even if the machine is stopped for a repair or inspection.
How to improve OEE, TEEP, and OOE
It’s now clear that all of these three maintenance KPIs depend on availability, performance, and quality. Anything that affects any of these will invariably cause OEE loss. OEE loss means less efficiency, and usually less output as well. To prevent the “6 big losses” in OEE, you should:
- avoid equipment failure, which decreases availability;
- speed up planned repairs to ensure maximum availability;
- minimise interruptions that increase production time and halt performance;
- troubleshoot equipment changes to avoid performance downturns;
- improve quality control to decrease the number of faulty end products;
- provide optimum conditions so that equipment can meet quality standards.
Interested in learning more? Check out our new Ultimate Guide to Preventive Maintenance.