Overall Efficiency Effectiveness (OEE) – How to Calculate Quickly, Efficiently, and Effectively

Overall Efficiency Effectiveness (OEE) can be a great tool or a great source of waste depending on the use.

In this video, I will reveal a 10 Steps Method I have created to have the maximum benefits by the correct use of the Overall Efficiency Effectiveness.

📹 Related Videos

▶ What is OEE

▶ OEE Calculation

▶ Lean Morning Meeting Tutorial

✏️ Here the Transcript of the Video

How to calculate OEE quickly, effectively, and efficiently

In my experience, I have seen a lot of time and resources wasted many times in calculating the OEE of the wrong machines.

Other times I have seen engineers spend time in spreadsheets to evaluate the OEE with unnecessary precision.

▶ Taiichi Ohno claimed:

Data is of course important in manufacturing, but I place the greatest emphasis on facts.

So what’s the point of knowing the OEE of all the company’s machines (data) if there is no real increase in sales (facts)?

In this video, I will explain my method to calculate the OEE in a fast way so you can avoid spending too much time and resources doing calculations that nobody will benefit from.

This method is quite good for single machines in production cells and not very good for long, automated production lines.

⓵ Before OEE, you have to know problem-solving

OEE is a problem-solving tool and not a calculation for its own sake.

⓶ In the beginning, choose only one or two machines on which to calculate the OEE

My method involves starting with the most important product family, making it the Value Stream Map, and, with the team, making a first hypothesis of the one or two constraints or bottleneck machines.

⓷ Listen to the people working on the chosen machines

Arrange interviews with the people who work on the chosen machines daily.

Ask simple questions such as:

– Does the car break down often?

⓸ Observe the machine at different times of the week

So, for a week or two, go and observe your chosen machines for one or two hours. See if the machine breaks down, etc.

⓹ Make an assumption of the value of the OEE

At this point, you have many elements to hypothesize a range of possible OEE values.

My rule of thumb is:

Disastrous machine = OEE between 10% – 20%
Machine on average working = OEE between 20% – 30%
Machine working = OEE between 30% – 40%

⓺ Organize the daily Lean Morning Meeting near the machine

Every morning, meet with the work team to discuss the operation of the machine for the previous 24 hours.

You are only now beginning to Collect Performance, Availability, and Quality data in a timely manner.

Remember to also record the daily machine output and the daily finished product output of the value stream you are watching.

⓻ Start immediately with the obvious improvements

There is no need to wait for too much data to do a 5S event, fix leaking pipes, or make sure there are always operators available.

⓼ Refine the OEE calculation, but don’t use the microscope

The purpose of this step is to understand which contribution lowers the OEE value the most.

Would it change the sense if the performance were 71% instead of 70%?

⓽ The facts

If after a few weeks, the OEE has improved but the product output has not improved comparably, then either the machine is not the constraint of the value stream or the calculations are wrong.

If instead, the improvement of the OEE corresponds to an increase in the output of the product, it means that you have selected the right machine and you have understood the power of the OEE calculation.

⓾ Repeat or expand

Looking at the results of Step 9, you can easily understand whether to move to another machine in the value stream or Expand the methodology to the company’s second product family.

▶ Conclusions.

The OEE calculation is a problem-solving tool with a specific focus on machines.

The OEE needs to be calculated to identify the major causes of loss of efficiency and remedy them.

There is no need to waste time and resources on the wrong machines and with unnecessarily precise calculations.

Improving the OEE must have a tangible impact on sales, otherwise, it’s just a numerical exercise.



my name is Mark Anderson a 20+ year Lean Expert.
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