Intelligent production management is key to improving the productivity of a factory. Like any revolution, the digitisation requires a prior assessment, and for this we have the formula. Learn more at how to calculate the OEE of a factory will guide us in introducing the necessary improvements to improve our production performance.
You can learn more about the definition of OEE in this post that we link, but it is a strategic tool to monitor the strategic tool to monitor the productive capacity of machinery and optimize the use of material and financial resources. We explain what this calculation consists of and how to apply it to adapt your production to Industry 4.0.
Read on!
Steps to calculate a factory's OEE
The calculation of OEE (Overall Equipment Effectiveness) tells us how to measure efficiency in a production plant and is a necessary formula if we want to commit ourselves to continuous improvement and to achieve success stories with our company.
The purpose of this metric is simple, its calculation allows us to compare the current performance of the machinery with its maximum production capacity:
- If the OEE is low, it means that there is room for improvement and therefore we need to introduce new systems to increase the productivity of our processes.
- Conversely, if the calculation is close to 100%, it indicates that we are approaching maximum production capacity.
To calculate the OEE of a factory we have to unpack and understand the three concepts that make up the formula.
OEE = Availability * Performance * Quality.
The availability of the machine is calculated on the basis of the operating time and the scheduled working hours. The more time that is produced, the higher the availability, while the lower the availability figure is, the longer the machine has been down.
Availability % = (Time in production / Time programmed to produce) * 100 % Availability % = (Time in production / Time programmed to produce) * 100
- The quality is the index used to measure defective products and parts that cannot be delivered to the customer. Constantly monitoring series production will help us to optimise the use of resources.
Quality % = (Quantity of good products / Total quantity produced) * 100 % % Quality % = (Quantity of good products / Total quantity produced) * 100
- The yield evaluates the rate of production and compares the rate of production of a given item with the theoretical quantity that could have been produced during the time the machinery has been in operation.
Yield % = (Actual Production Quantity / Theoretical Production Quantity) * 100% Yield % = (Actual Production Quantity / Theoretical Production Quantity) * 100% Yield
Ultimately, a positive result would mean that only quality parts are produced as quickly as possible and without downtime.
Why use this indicator to measure your company's productivity?
Measuring results is essential if we aspire to improve the efficiency of our factory's production processes and introduce improvement systems. This is the function of OEE, without this formula we would be moving towards Industry 4.0 blindfolded.
Correctly implementing an OEE system has a direct impact on the performance and productivity of industrial processes. Its calculation allows us to reduce machine downtime, identify the causes of performance downturns and increase the rate of product quality.
Furthermore, we are talking about a tool that offers reliable information in real time on the production process, both in relation to the efficiency of the machinery and the management of human resources.
Example of OEE calculation
To better understand how to calculate the OEE of a factory, let's use a practical case. Let's say we have to measure the OEE of a production line during an 8-hour shift and with a production capacity of 1,000 pieces/hour.
Now, imagine that the line produces parts for only 6 hours (75% availability), that it produces an average of 700 good parts in an hour (70% yield), and that at the end of the shift it has produced 168 defective parts (96% quality), the formula would look like this:
Availability 75% * Yield 70% * Quality 96* = 50.4% of OEE
Is the OEE calculation sufficient?
While the calculation of OEE is the starting point for measuring the productivity of a company, an even more ambitious step can be taken if we are interested in looking deeper into the factors related to productivity losses in a factory and finding the right solution.
If we analyse the above example, we can see that 4032 good parts have been produced in one shift against a production capacity of 8000 parts per shift. From this result we can draw some conclusions:
- Availability. Out of 8 hours available, only 6 hours have been produced due to downtime, but what is the cause of this downtime? It could be anything from a difficulty in start-up times to a breakdown.
- Output. From an average production capacity of 1000 parts/hour only 700 parts/hour have been produced. We have the data, but it would be necessary to understand the reasons, such as micro stops or reduced machine speed.
- Quality. Of the total number of parts produced every hour, 168 are defective. But is this due to an error in the production process or is it related, for example, to product changeover?
In the face of negative results, we need tools to identify the causes of inefficiencies, such as speed, breakdowns, micro-stops or product changeovers. For this, we wanted to go a step further with our MES system.
If you want to get more value for money, take the right action and manage your resources more efficiently find out more at on how to implement the MES 4.0 system in your factory.
