How to Increase the Overall Equipment Effectiveness (OEE) of Your Production?

What Is Overall Equipment Effectiveness?

Overall Equipment Effectiveness (OEE), also known as the taux de rendement synthétique (TRS) in French, is one of businesses' key indicators. It provides a synthetic view of production line performance.

More precisely, it measures the utilisation of a production resource, such as the running rate of a machine. It is a percentage where a value close to 100 represents fully operational equipment and a value close to 0 represents non-productive equipment.

How to Calculate Overall Equipment Effectiveness?

There are various ways to calculate OEE. Although the different formulae are interrelated, this article covers: calculating OEE by the productivity ratio, by the state-time ratio, by the number of parts produced, and by performance indicators.

• Calculating OEE by the Productivity Ratio:

One of the most commonly used formulae is as follows:

• Calculating OEE by the State-Time Ratio:

OEE can also be expressed as the ratio of useful time to required time:

In this formula, useful time is the number of hours of conforming production and required time is the time the machine is made available for production.

• Calculating OEE by the Number of Parts Produced:

OEE can also be calculated by taking into account the number of parts produced. The formula is then:

• Calculating OEE by Performance Indicators:

By breaking down this formula, it is possible to calculate OEE using performance indicators and thereby highlight production losses according to different categories:

Based on these calculations, areas for improvement can be identified.

Overall Equipment Effectiveness Example

Let us take a real production scenario to calculate OEE. A shop floor operates 8 hours a day, equating to 480 minutes. On this particular day, the observed machine availability was 440 minutes, due to the following production losses:

• A 20-minute changeover,

• A 15-minute breakdown,

• 5-minute adjustments.

The cycle time is 120 parts per hour, but measurement of the actual cycle time gives a rate of 100 parts per day. The quantity produced is 600 parts per day, of which 18 are rejected — 12 reworkable and 6 scrapped.

How can you improve Overall Equipment Effectiveness?

When calculating OEE, it is often advisable to focus on the performance indicators approach. Improving productivity means reducing OEE losses by addressing each of the 3 ratios in this formula: the quality rate, the performance rate, and operational availability.

As we saw in the example, the nature of production losses affects one of the 3 ratios and thus reduces OEE. By categorising these losses, the source of waste can be identified and a targeted action plan launched, supported by appropriate visual management.

Losses affecting the quality rate:

Losses affecting the performance rate:

• Production micro-stoppages,

• Slowdowns and idling.

Losses affecting operational availability:

• Breakdowns (known as equipment-related stops),

• Changeovers or tooling changes (known as operational stops),

• Parts or resource shortages (known as induced stops).

Ultimately, identifying losses through OEE indicators typically leads to implementing better-maintained production equipment to minimise stoppages, eliminating bottlenecks, maintaining the planned production rate, and sustaining consistent quality — all to boost productivity and embed a continuous improvement mindset.