OEE KPI ‘s: Background

Why are there several OEE KPI’s?

“(Why) do we need different OEE KPI?” When the OEE Industry Standard team started, there were many similar discussions and argumentations heard.
A basic statement was: OEE measures the effectiveness of a machine, the equipment.

Is OEE a KPI for Operations Effectiveness?

If well defined, this of course can tell us a lot about how effective the organization uses this equipment. But also about the surrounding equipment and even the supply-chain. However, OEE is not the KPI for “operations effectiveness” or “Asset Utilization”, although it’s loss-structure is an essential part of such KPI’s.

The OEE KPI is a shopfloor tool

The reason for this decision is the principal choice that OEE is a shopfloor tool, a metric that can be influenced by the shopfloor team. Of course, now there are some ‘grey zones’. How far can the span of control of a shopfloor team stretch? And what is the definition of a ‘shopfloor team’?

One dataset serves all!

Nevertheless, using the same (OEE) data, yet stretching the time-frame more or less, can result in a different ‘scope’ that may be interesting to a different audience. Particularly to the operations- and upper management.

To clarify what we are looking at, what scope is used by what audience, we defined some different scopes that are commonly extracted from OEE data.

OEE Industry Standard: Definition – Scope

You will see several different formats of the same loss-structure data set.
I agree this is all a matter of nomenclature, but this diagram shows that we are talking about the same loss-data structure. It is just a matter of reshuffling it in different ratios, for the purpose of gaining focus to different audiences.

OEE KPI ‘s to create a unified language

Important is to create a clear ‘language’ and to use each tool for its most suitable purpose. We want to prevent the ‘abuse’ of tools for different purposes just because it is there and could be used. (You will understand I hate to see Bahco wrenches and pliers in the factory for the same reason.)
Although slightly outside the scope of the OEE Industry Standard, the different ‘scopes’ are part of the standard. However, they were never subject to serious discussions and reviews.

It seems for the new 2020 standard this would be a fine moment to do so. I would like to invite you to review the currently defined scopes and comment them:

  • Are they clearly enough defined?
  • Do they fulfill your needs?
  • Are there already other standards that could be included here?

To do so a dedicated (open) group is started to discuss the standard, http://www.linkedin.com/groups/OEE-Industry-Standard-4246823
I hope together we can further improve the standard.

See also:

OEE – OOE – TEEP explained

Continuous Improvement in Daily Work

Q: How to make Continuous Improvement Activities a part of daily work?

This question regularly is being asked when companies join a Lean– or TPM journey.

Arno Koch •  Continuous Improvement indeed should not be a project, an incidental activity or a staff-member job. So how to engage everybody in the factory to get involved in improvement activities on a daily basis?

Continue reading

How to set Availability Definitions (1)

Q: What are the time effects of the situations below to the availability and OEE calculation?

  1. Excise tax checking time (60 per shipment)
  2. Machine cleaning time for the quality of product. (10 min every hr.)
  3. External factory Electrical failure time. (uncontrollable)

Continue reading

How high should the OEE be?

Q: I have been reading in different sources about the OEE measurement and I have not been able to find any concrete agreement about what the value for OEE should be. Could you please give me any references? How high should OEE be?

Is 85% OEE world class?

I several places I read that there is no common agreement but that it is generally suggested that:

  • bellow 65% OEE should be considered unacceptable, since it represents a very low competitiveness and a great number of economic losses.
  • A value between 65 and 75% is considered as regular, only acceptable if it is being improved.
  • An OEE between 75 and 85 % means an acceptable level with slight economic losses and which can be easily improved to World Class levels.
  • A high OEE value between 85 and 95 percent is considered as good and equals World Class values; it represents a high level of competitiveness.
  • And finally, a value above 95% is considered as excellence; an excellent competitiveness and World Class values.

Continue reading

Should we calculate OEE when there is no demand?

Q: Some of our machines are not being used every day: We lack the demand of the product. So, I don’t evaluate those machines when they remain idle. But, as per my boss, those idle machines should also be evaluated (i.e. OEE =0) and should be presented in monthly graphical reports. Is it correct to calculate OEE of those machines while they are not running?

Continue reading

How to treat machines when there is no demand?

Q: Some of our machines are not being used every day on the demand of the product. So, I don’t evaluate those machines when they remain idle. But, as per my boss, those idle machines should also be evaluated (i.e. OEE =0) and should be presented in monthly graphical reports. Is it correct to calculate OEE of those machines while they are not running? 

Continue reading