Key Performance Indicators (KPIs) have become one of the most important measurements of performance for large companies that value the efficiency of their production processes. The benefits of Overall Equipment Efficiency (OEE) as a KPI are now well known in many industries. Gaining an edge in business requires strategy and risk-taking. OEE is a valuable tool for taking the guesswork out of improvements in efficiency. The ultimate result is an increased quality of a product or a manufacturing process.

OEE allows businesses to monitor and improve their performance of production processes (machines, cells. lines and plants) This powerful measurement takes the available time for production and subtracts time for planned stops, such as breaks, lunches and planned maintenance from it. The remaining time is called planned production time and requires losses of efficiency to be subtracted; this becomes the target of improvement. The losses include downtime losses, performance losses and quality losses. OEE calculations are based on three factors, including availability, performance, and quality. There are variations in the way OEE is calculated to meet the needs of the company.

OEE is an important part of improving efficiency but is not the only important company performance measurement tool. For example, the use of OEE may improve availability (downtime, changes of shifts etc.) but may see a decrease in quality. In this case, a higher OEE may not be the best indicator.

OEE is an important indicator that should be considered by most companies looking for a KPI that will measure production efficiency. The formula for OEE is flexible and can be adapted to the special requirements of each company. OEE is not the only answer for improving quality and should be considered in light of quality indicators. Using OEE as an indicator will result in easier and more balanced results that can be considered by people as responsible for improving the overall performance, quality, efficiency, and quality within a company.

21 thoughts on “How Overall Equipment Efficiency (OEE) Improves Efficiency”

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