going deeper into Product Development

Overall Equipment Effectiveness – balance of Performance vs Quality

This is a tool that could be a metric which shows on how effectively a manufacturing operation is run. OEE will measure the time consumed for producing good products. The index resulted from the calculation will also describe the losses happened within the process. So, the index of the OEE could be a generic form which allows comparison between manufacturing operation in all industries.

The OEE work as indicator for Machine availability, ready to work to produce products; Performance, the capability of the machine to work at designed speed, off course the machine should be supported with good formulation and its suitable tooling; and Quality, to produce not only number of products but the a good products – product that could fulfill all the requirements.

OEE also work as a balance between productivity and losses with the machine availability as its base support. The productivity should be supported with good input, formulation and process ease. With all of those items, then the losses, scrap and products failure would become less. If the product losses is high enough, then the productivity would be surely decrease.

Components of OEE

Availability – The machine and equipment availability
Operating time Operating time – preparation time or schedule stoppages (set-up and set-down)
Net Operating time Operating time – unschedule stoppages

Performance – The machine and equipment capability to produce products
Recipe number Number of products based on number of raw material and recipe
Theoretical products Specified speed of machine * net operating time
Actual number Actual speed machine * net operating time

Quality –  good products resulted from Raw materials, process and machine
Number of good product Number of good product compared with the number of raw materials

Loading or Occupancy rate – Usage of the machine within calendar hours
Daily hours 24 hours for 3 shifts ; 16 hours for 2 shifts ; 8 hours for 1 shift production


Basically OEE will measure the time consumed for producing good products. So the equation used to calculate the OEE would be:

OEE = Availability * Performance * Quality; whenever needed it, the Loading or occupancy rate also be added, then

OEE = Availability * Performance * Quality * Loading

how ready is the machine to produce products. The readiness of the  machine could be describe by:

  • Working time = Working hours
  • Operating time = Working hours – scheduled stoppage: lunch time, set up, set down
  • Net operating time = Operating time – unscheduled stoppage: machine breakdown, minor stop, adjustment stoppage

The availability index that could be used:

  • Availability (1): Net operating time / Operating time; to measure how much time needed for scheduled stoppage
  • Availability (2): Net operating time / Operating time * Operating time / Working time; add more information on the portion of the operating time within working time

Performance, comparing the machine speed with its designed speed. The performance index also be influenced by the raw material, formulation, and process parameters. The performance could be described with:

  • Recipe number = number of products based on recipe or raw materials input
  • Theoretical number = specified machine speed * net operating time
  • Actual number = actual machine speed * net operating time

The performance index that could be used:

  • Performance (1) : Actual number / Theoretical number; to measure the actual machine speed compare with designed speed. This index would tell more information about the maintenance program, new
    machine, and formulation and process design.
  • Performance (2): Actual number / Theoretical number * Theoretical number / Recipe Number; added more information on the number of products loss or scrap. The reprocess product also would produce 0 (zero) as performance index.

Quality, the total number of good products. The total samples for testing and retained product, should also be calculate on this section. The quality could be described with:

  • Total of good products = number of product resulted from the production
  • Number of good products = Total of good products – Total samples: testing sample and retained samples

The quality index that could be used:

  • Quality (1) = Total of good product / Actual number; will measure the portion of good product from the production activity
  • Quality (2) = Total of good product / Actual number * Number of good product / total of good product; added more information on the sample size and its testing method.

Loading, means that percentage of the machine be used to produce products. The Loading could be used whenever the management need the examine the capacity that is being used. Or the company has a new plan to enhance the marketing effort or a new marketing program. All of those program would need to be prepared by the production. If a company still using the production capacity with only 1 shift working, then the Loading would be not too important. The Loading could be describe with:

  • Daily hours: e.g. 24 hours for 3 shifts, 16 hours for 2 shifts, and 8 hours for 1 shift, per day.

The loading index could be:

  • Loading = Operating hours / Daily hours, will measure the portion  hours use for production within daily hours

Problem and Troubleshooting

Index Problem (Low Index) Troubleshooting
Availability (1) Too many unschedule stoppage Better tooling materials
Formulation and process parameters
Availability (2) Too much time for schedule stoppage Ease on set up and set down
Less operating time Better scheduling
Performance (1) Machine speed too low Better input or raw materials
Formulation and process parameters
Maintenance program is not good enough
SPC is not well applied
Operator is not well trained
Performance (2) Too many scraps Wearing tools
Quality (1) Too many out of specification products SPC is not well applied
Machine speed too high
Less stringent on In-process control
Quality (2) Too many samples Review on method of analysis
Review on retained sample policy

” OEE could act as a balance between Performance and Quality with Availability as it base”

“Using OEE in daily operation would  resulting
a Continues Improvement mentality”


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