Wikipedia calls OEE a hierarchy of metrics, with the top level being the OEE and TEEP (Total Effective Equipment Performance). The underlying measurements on the second level are Loading, Availability, Performance and Quality.
A real bucket full of measurements. When you combine them all, you get one clean number, a percentage.
What exactly is it? OEE is a measurement of the efficiency of a machine.
It's a useful metric for comparing similar machines. For example, a manufacturing plant may have 30 presses all hammering out similar products. By measuring OEE on each machine, you can benchmark them against each other and highlight under-performing machines that may need some special attention.
leanexecution.wordpress.com has a series of free Excel templates that drill down into the depths of OEE. Starting with a basic tutorial of OEE, then an example with one machine, and finally with multiple machines, including cost and quality.
The basic equation for OEE is Availability x Performance x Quality (all in percentages).
Availability = Operating Time / Available Time
- How much of the available time is this machine running?
Performance = (Parts produced x ideal cycle time) / Operating Time
- Is the machine running as designed?
Quality = Good parts produced / Total parts produced
- How much scrap are we making?
Now multiply them all together and you get Overall Equipment Effectiveness. One simple number.
For a much more thorough explanation of OEE, go to the "Getting Started with OEE at leanexecution.wordpress.com
You don't have to worry about the calculations if you have a free Excel template that takes care of everything. The templates will do it all for you, just enter the data. Of course, in order to understand it make sure you look at "How to Calculate OEE - Tutorial.xls" first. This template is listed in the downloads section.
Sometimes my eyes glaze over when I see a spreadsheet with a whole lot of cells, but this tutorial template walks you through the basics of OEE with a real life example. And none of the cells are locked or protected, so you can play around with it and tune it to your own needs.
Calculating OEE can be done differently since there's no definitive standard, but the basics are the always the same. Availability, performance and quality. Used primarily as a comparison tool, the fine details don't matter if you are consistent with your measuring.
These free Excel templates have been added to my list of helpful Lean resources.