How OEE is calculated
OEE compares the good parts actually made with the most that could have been made at the ideal rate during planned production time. It is the product of three factors, each covering a different kind of loss:
The second form is a useful check: OEE is the fraction of planned time spent making good parts at full speed. The three factors match the “six big losses” of Total Productive Maintenance:
- Availability: equipment failures, and setups and adjustments.
- Performance: idling and minor stops, and reduced speed.
- Quality: process defects and rework, and start-up yield losses.
The often-quoted world-class benchmark of 85 % (90 % availability × 95 % performance × 99.9 % quality) is usually attributed to Nakajima's TPM work. It is a commonly cited reference point, not a standard. OEE is most useful for tracking one machine or line over time and for showing which loss to attack first, not for comparing different plants.
Takt time and line balancing
Takt time is the pace of demand. It is set by the customer, not by the equipment. Cycle time is how long a station actually takes. Every station must run at or below takt, or the line cannot meet demand without overtime. The slowest station, \(t_\text{max}\), sets the line's real output. Balance efficiency measures how evenly the work is spread across stations, and its complement, the balance delay, is idle time built into the line.
Worked examples
OEE. A 450-minute planned shift loses 45 minutes to unplanned stops, leaving 405 minutes of run time (A = 90.0 %). At an ideal 30 s per part, 740 parts should take 370 minutes, so P = 370/405 = 91.4 %. 715 of those parts are good (Q = 96.6 %). OEE = 0.900 × 0.914 × 0.966 = 79.4 %, the same as 715 good parts out of a theoretical 900. The loss bar shows that the 45 minutes of downtime is the largest loss, ahead of 35 minutes of speed loss and 12.5 minutes making parts that were later rejected.
Takt. Demand of 840 units in 450 available minutes gives a takt of 32.1 s. Six stations with 173.5 s of total work need at least ⌈173.5/32.1⌉ = 6 stations, so the station count is right. But station 4, at 33.5 s, is 1.4 s over takt and limits the line to about 806 units per shift. Moving about 1.5 s of work from station 4 to station 3 (24.0 s) brings every station under takt without adding labor.
Assumptions and limits
- The ideal cycle time decides the answer. If it is set to the average actual rate, performance looks perfect and speed losses disappear. A performance above 100 % means the ideal cycle time is too long.
- Definitions vary between plants. Some count changeovers as planned time. Some use calendar time, which gives TEEP rather than OEE. State the definitions whenever you compare figures.
- Count rework as a loss. Quality should use first-pass good parts. Parts that pass after rework still consumed run time.
- Station times vary. A station averaging just under takt will still miss it on some cycles. Plan station loads with margin for variation, walking, and handling, and confirm with time studies.
References
- S. Nakajima, Introduction to TPM: Total Productive Maintenance, Productivity Press (1988).
- M. Rother and J. Shook, Learning to See: Value Stream Mapping to Add Value and Eliminate Muda, Lean Enterprise Institute (1999).