Why OEE Still Matters

June 10, 2022
Though some say OEE (overall equipment effectiveness) is outdated, its use to continuously improve production operations across industry prove the value provided by this key metric.
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Welcome to Take Five with Automation World. I’m David Greenfield, Director of Content, and today we’re going to explain why the overall equipment effectiveness metric, typically referred to as OEE, still matters to industry. One of the reasons for a discussion on why OEE still matters is that there are some in industry who are questioning the value of OEE and referencing it as some archaic metric with little value to today’s manufacturing operations.

To start, I’ll note that what most OEE detractors point to is the fact that OEE can’t tell you how to fix an equipment issue. But it does show you where problems exist and is often an important metric for other technologies that can direct you in fixing specific problems. With that said, it’s important to realize what OEE is, as it’s never really been positioned—on its own—as a cure-all to equipment downtime.

Instead, it’s an equipment operations metric based on three factors: Equipment availability, which is the equipment run-time divided by planned production time for that specific asset; Performance, which is the ideal cycle time for an asset multiplied by total product or part count divided by the asset’s run time; and quality, which is the good part or product count divided by total count. So the main goal of OEE is to highlight areas of potential equipment problems to help improve efficiency, reduce downtime and operating expenses, and minimize waste. It remains a core manufacturing metric because of its ability to boil complex production problems down to relatively simple terms to drive continuous improvement.

According to LNS Analytics, OEE remains a top-three metric for manufacturers, with more than half of manufacturing analytics leaders saying they track OEE, which puts OEE behind only net profit margin tracking and on-time delivery tracking as a key manufacturing business metric.

Hunter Industries, a manufacturer of irrigation and outdoor lighting equipment, has long monitored OEE, starting with spreadsheets before moving to the Inductive Automation’s Ignition software platform in 2013. The company fuels its OEE calculations with real-time data from PLCs using a mix of automated and manual methods. The results are regularly served up to employees via visual dashboards on the plant floor, enabling them to monitor issues and make adjustments as needed.

Saint Gobain Sekurit, a manufacturer of glass glazing systems, is another strong proponent of OEE to measure and compare performance across its global factories, as well as for capacity planning. OEE is reported per shift and once daily drawing from the company’s MES system, along with some manual data entry. The company recently advanced its OEE reporting using Litmus’s edge data platform to automate data collection and allow remote access to OEE data about the performance of key manufacturing lines. These OEE metrics are not only used by plant floor personnel, they’re also accessible to managers in logistics, supply chain, and maintenance operations to help them focus on continuous improvement, whether that involves adjustments to spare parts inventory or addressing equipment reliability issues.

For Glidewell Dental, a manufacturer of restorative dental devices, OEE is part of an end-to-end automation initiative. Glidewell calculates OEE with the support of Beckhoff Automation’s industrial PCs and TwinCAT3 automation platform. Using these technologies, Glidewell calculates OEE every 15 minutes at the machine level to extrapolate data for the entire production line. These OEE calculations help evaluate how many parts are rejected against whether a machine is down because it produced too many parts or is running at too high a calibration.

At Cascades Canada, a paper and pulp processor, OEE calculations are regularly performed at the individual machine and line level, but the metric is also used at the plant level to drive continuous improvement and keep its multiple sites focused on the same business goals. Cascades manages OEE through mostly manual processes with individual operators using a homegrown system to capture data from a variety of legacy platforms and an SAP ERP system to calculate scores. More recently, its OEE efforts are being enhanced by a project to holistically improve asset health across its 70 plants using Emerson Automation Solutions’ condition monitoring technologies.

More info on OEE guidelines can be accessed at PMMI’s OpX Leadership Network via the link shown here.