Overall equipment effectiveness (OEE) monitoring leads to a clearer image of company performance

Tracking productivity in real time

Every investment must have a return into the company revenue, being the propeller that gives trust to the business. Besides the human capital, the most important investment of a manufacturing organization is in the production equipment, thus monitoring the efficiency of each equipment leads to a better overall performance of the business. Whether it’s about a couple, tens or hundreds of units, data collecting in production for each equipment is a challenging endeavour for managers without the help of a digital set of IT tools. Able to connect and “talk” with the modern machines, these IT tools grab the useful information and feed a core engine that puts in an easy to follow, understand and interpret information for decision makers. This real-time analysis leads not only to faster decisions but to many other valuable benefits for entire organization. Based on these information, production KPI’s could be defined and track for each equipment and by department and overall, for entire organization, and in the meantime maintenance activities could be scheduled in full knowledge of the facts to minimize the impact of immobilization. 

This is not a recent trend in manufacturing, but during last few years more and more organizations are discovering the immediate benefits of large scale adoption of digitalization solutions such as real time production increase and managers are looking for consultants for a systematic approach of measuring manufacturing productivity. This activity was regulated by a widely accepted standard that transforms the huge amount of data provided by equipment into simple figures that allows managers to feel and understand what are the weaknesses and strong points in the organization and, finally, to control and increase production efficiency. 

Overall equipment effectiveness (OEE) is a term used to evaluate how efficiently a manufacturer’s operation is being used. In other words, overall equipment effectiveness helps you notice a problem in your operations, identify which percentage of manufacturing time is productive and fix it while giving you a standardized gauge for tracking progress. The goal for measuring your OEE is continuous improvement. 

Practically and strongly, OEE follows the most common and most important sources of productivity loss in the manufacturing process and groups them into three categories: Availability, Performance, and Quality. 

Following these three categories, complex production data are “distilled” into simple values, which provide a tool for correctly measuring the efficiency of the production process. 

  • Availability: measures productivity losses from stagnation (events that affect production planned for an appreciable period of time); 
  • Performance: measures losses due to slow manufacturing cycles (factors that cause the process to run at speeds lower than the maximum possible speed-ideal cycle time); 
  • Quality: measures losses from manufactured parts that do not meet quality requirements; 

Together, these three factors combine into a single OEE “score” – a single number, which provides a complete measure of manufacturing efficiency and effectiveness. The OEE provides a consistent and proven way to measure the effectiveness of Lean manufacturing initiatives (tools), TPM (Total Productive Maintenance) programs, and other productivity initiatives (tools). 

Overall equipment effectiveness is a powerful figure which condenses in it a lot of information. When calculated and interpreted correctly, OEE have a significant impact on your production. Used as a benchmark to compare any given production to industry standards, in-house equipment or other shifts working on the same piece of equipment, the value of OEE ranks the organization. Taking into consideration that an OEE score of 100 percent is considered perfect production, meaning you’re only manufacturing quality parts as quickly as possible with no downtime, a value of 85% is considered world class for discrete manufacturers and is a sought-after long-term goal. Typical for discrete manufacturers, a score of 60% shows there is considerable room for improvement, while 40% is considered low but not uncommon for manufacturers just starting to track and improve performance. In most cases, a low score can easily be improved through easy-to-apply measures. This is the moment where consultancy companies like KFactory are entering the stage and put in practice their know-how, and with a joint effort shoulder to shoulder with you will help you take decisions in adopting and using the best IT tools for your production environment for tracking and boosting productivity in real time. 


KFactory Program Partnership

An easy way to visualize all operational data from your company Cost as subscription – no upfront investment
Our partners