Operational Efficiency - OEE - by SolutionsPT

OEE (Overall Equipment Effectiveness) is a vital metric to track as it can help your organisation reduce costs and increase ROI. The more efficient your operations are, the more effectively you can utilise assets and the more benefits you’ll enjoy as a result. 

What is OEE and why is it essential that your organisation is aware of it?

01 What Is OEE?

This KPI is the industry standard for measuring and monitoring the operational efficiency of production machines and lines. It presents a ratio of actual production results against the maximum possible production results within planned or scheduled time. 

If you’re experiencing an OEE of 100%, then your plant is producing only good products as quickly as needed within scheduled operating time. 

To calculate OEE, we need to multiply three different factors. These are availability, performance and quality.

  • Availability (%) = Operating Time/Available Time
  • Performance (%) = Total Production/(Rated Speed x Operating Time)
  • Quality (%) = Good Production/Total Production

Operating Time is Available Time excluding unplanned equipment downtime.
Available Time is the period of interest, excluding planned equipment downtime.
Total Production is the amount of bulk material or product items that are produced.
Good Production is Total Production excluding products which don’t meet target quality.

OEE calculation

To accurately calculate your production line’s OEE, there are a few things you need to take into consideration. For example, the order of product flow, existing bottlenecks on the line and the location of good production count.

When carrying out these calculations, the bottleneck availability defines the line availability and the bottleneck target production rate needs to be used to calculate line performance. The line quality value needs to take the line good production count and the sum of quality losses along the whole line into account.

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02 Ensuring You’re as Efficient as Possible

To ensure your plant is operating at peak level, you need to have complete visibility over your operational efficiency. This can be achieved by measuring and monitoring KPIs such as OEE and through analysis of equipment data. 

With real-time visibility of OEE, you’ll make proactive decisions before they can escalate into anything more serious. Plus, with historical data of line performance, you can conduct root cause analysis of capacity losses to determine critical areas for improvement and drive growth.

Some of the key steps to take to ensure operational efficiency include:

  • Increasing equipment utilisation. 
  • Reducing unscheduled downtime.
  • Increasing line throughput.
  • Minimising the impact of product changeover.
  • Improving scheduling and customer satisfaction.

OEE captures when an asset is available, the speed at which it operates and the products’ out of quality specification. 

Measuring and monitoring OEE is a good starting point but there’s more to think about. To gain true value from digital transformation, it’s important to find a more sophisticated approach. It’s necessary to add operational context to enable root cause analysis so operators can determine the causes of unscheduled downtime.

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Advanced performance monitoring solutions go beyond OEE for a full dive into how production logistics and planning, quality operations or maintenance activities may impact performance.

These solutions combine OEE monitoring with equipment utilisation state tracking and advanced analytics. Adding work order management and manufacturing execution tracking to the picture provides a clear categorisation of unplanned downtime vs product changeover or idle time. 

In addition, monitoring production line OEE requires validating the product flow across individual line equipment. This will mean focusing on frustrating line bottlenecks. A holistic real-time view of efficiency and performance, with accompanying analytics, empowers users to take action to fix issues. This information also helps identify inefficiencies which can help drive operational change across lines and the whole organisation. 

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03 Transforming Operational Efficiency: A Case Study

New Belgium Brewing Co Case Study

New Belgium Brewing Co. wanted to fully take advantage of the manufacturing capabilities to ensure their brewery was operating at full capacity. The aim was to achieve OEE to produce a quality product while still being as efficient as possible. 

The issues the brewery faced all stemmed from unscheduled downtime. Without vital real-time information, production staff could only work reactively which cost valuable time. Better management of this downtime would empower staff to work more effectively and meet improved production goals. 

With the help of SolutionsPT, New Belgium Brewing Co. decreased downtime by more than 50% and achieved record production weeks. For more information on the challenges they faced and the difference OEE can make, read our case study.

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04 Utilising Software to Increase OEE

Your production process is only as effective as the poorest performing equipment on the line. One weak link in the chain can cause serious problems and hold your organisation back. This problematic equipment hinders profitability, schedule compliance, uptime and safety. 

OEE monitoring methods will identify the weakest links in your lines and restore them to run reliably at their full operating potential. This allows you to carry out continuous improvements to ensure your plant reaches its highest production levels. 

Consistent reporting is the foundation for comparing metrics and helps to improve decision-making and best practice sharing. That’s why improving equipment performance begins by standardising equipment performance metrics and KPIs.

Emerging digital technologies support performance management strategies. Things like the IIoT and smart devices automate data capturing. This removes the burden of manual data collection tasks from workers, empowering them to utilise their skills elsewhere.

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Real-time performance metrics and drill-down analytics empower stakeholders with actionable information. This complete visibility reduces equipment downtime while increasing the operating efficiency and profitability of manufacturing operations.

Plants that have used software as part of their continuous improvement strategy have reported the following equipment performance gains:

  • An increase in OEE by 20-30%.
  • Equipment uptime up by 10-20%.
  • Manufacturing costs down by 10-30%.
  • Quality improved by 5%.

Using the Cloud

With cloud technologies rapidly advancing, cloud-based solutions are another item to consider when exploring performance monitoring.

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There are many benefits to hosting these capabilities in the cloud, whether as a fully cloud-hosted deployment or as a hybrid cloud solution where specific applications and mission-critical MES functionality continue to run on-premises – but historical data is loaded into the cloud. 

A cloud-only performance management application can be more feasible to meet the ROI expectations of plants. This is especially true for plants with less complex processes and lower levels of automation. While the IT footprint and total cost of ownership of an on-premises solution wouldn’t pay off, a cloud deployment is economically feasible.

Hosting performance management and data storage in the cloud also means the solution can connect people and systems anywhere. These systems are extremely scalable, allowing a performance management approach covering multiple sites across the globe. With plant and equipment data coming together in the cloud, side-by-side comparison of equipment efficiency is naturally much easier. 

Companies can compare extensive process data with corporate performance data, advanced analytics and artificial intelligence. This process makes it possible to identify and share best practices with more sophistication and on a higher level.

Whether OEE monitoring and measurement is hosted on-premises or in the cloud, digital transformation of the continuous improvement processes can provide serious benefits to overall operational performance, allowing companies to get more out of their existing equipment. Learn more about how OEE monitoring can transform your business.

For more information on OEE, how to track it and the tools you can use to make the process a successful one, feel free to get in touch with our team today. We’re on hand to answer any questions you might have and help you find the most effective solutions for your organisation. 

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