Q: I’ve been having some difficulties in understanding the definition to calculate OEE. From my experience, it should never be over 100%. However, by definition, performance can surpass 100%.
This will happen whenever the working center is turning faster than standard rate. In this case, should I take the actual cycle time instead of the standard one to limit the performance component at 100%? I need some help, please!
Arno Koch • The definition of the maximum speed is in many companies mostly ‘hot’. So dear Marcio, you are alone… It takes quite a paradigm shift to stop seeing 100% OEE as ‘a target’ or even as something that could be achieved.
100% OEE is NOT a target!
I see 100% OEE as no more than a reference point. Compare it to your compass when going for a walk in the mountains. The needle should at all circumstances point to the north. Is north your target? Will you always walk north? Of course not. Does it come handy to have a reference point, so you will always know what direction you are heading? Sure yes! For many it helped to start seeing 100% OEE as their ‘north’; no more than a reference point that will stay the same for the next couple of years so you can walk your improvement-expedition; taking the directions you can and need at the moment. And keep on track, also during the storms of heavy operations….
Typically the ‘standard’ (the maximum speed for a specific product on machine) is rather defined too low than too high, resulting at some moment in a performance rate over 100%, making the beautiful balanced calculation of OEE rather silly not to say worthless. Now what is the worst that may happen when you really put the standard too high? Well, your OEE will never become 100%… Or will consequently be somewhat lower.
Higher maximum speed gives lower OEE
So what?? The target of OEE is not to become 100% and the value it selves is not of much relevance since it even cannot be compared against it selves. The relevance is in the under laying loss structure. The more losses you are willing to reveal by defining OEE smartly, the more improvement potential you will find and see.
Use the right definitions!
To help you doing so there is an ‘OEE Industry Standard’ that recently has been completely redone and can be found here:
(Feedback is highly appreciated) Having discussions about OEE definitions in your company is great, because it may lead you to the reasons why the losses are still there; so listen careful to all the arguments why “it can’t be done”. When turning those arguments around, you’ll know what needs to be done! It works like this: Invite your partners to give as many as possible reasons why a certain speed, or quality, or uptime is ‘not realistic’; why it cannot be done. Make a list. And give this list the title: TO DO. You might be astonished how much we are sometimes caught in our own assumptions. I hope this helps a little. Good Luck on your Journey! Best, Arno Koch