Is OEE Overrated?
OEE (Overall Equipment Effectiveness) is the gold standard for measuring manufacturing productivity. Simply put, it identifies the percentage of manufacturing time that is truly productive.
Technically OEE measures how your production is performing compared to its potential. If your production system is old and slow, your expected output will not be as high as a multi-million dollar factory, and so you can still achieve an excellent OEE. This can be good, as it means you are not measuring your factory’s performance against that of others. However, this does not mean that if your OEE figure is high, then operation effectiveness is also high, and the factory is performing well.
OEE does not consider schedule loss, which is all time when there is no intention of running production (e.g. plant shutdowns, lunch breaks). It could be that you have five production lines but two have not been in operation due to maintenance over the past few weeks. The three lines running have been running at an impressive OEE of 85%. There is clearly a problem though, as you have 40% capacity sitting idle for a significant amount of time.
When this is understood, it is obvious that OEE is not the only measure that needs to be considered when reviewing the performance of production in your business. It is wise to also track your Total Effective Equipment Performance (TEEP) to get an idea of the bigger picture.
Measuring stats by themselves makes no difference at all. It only allows you to see things that otherwise you wouldn’t be able to see. What makes the difference is your willingness to investigate and act on the information that the calculations bring you. That may mean significant changes to the way you do some things. For example, one of our customers identified that for some product changes they could reduce cleaning time by 50%. This was a big change for them, but it meant they saved time and water, reducing costs and increasing output.
In our experience, some companies are up for that, and some aren’t. For companies who persevere with understanding and implementing activities to drive OEE upwards will see enormous rewards in unlocking the hidden capacity of the factory.