Knowing the definition of OEE is a fundamental first step in understanding how the best factories and companies are able to scale their business and ensure efficient production management. If you discover some OEE exercises and understand how it can affect your project, you will see how in a short time, efficiency, performance and profits multiply.
You will soon discover what OEE is, but we recommend you to complement it with a post of our blog in which you will discover how to calculate O EE properly .
What is the OEE?
The meaning of OEE is easy to understand. It stands for Overall Equipment Effectiveness. The meaning of overall is general, so we could translate the definition of OEE as Overall Equipment Effectiveness.
Many other indicators depend on the OEE KPI and above all, it affects a company's profitability, profitability, competitiveness and longevity in the market. A good OEE score means good news in other areas. That is why knowing it is crucial.
For this you need to calculate the OEE of your company, or for example, maybe you just want some specific data and you need to calculate the production. Once you learn this operation you will not stop implementing it and you will see that you are able to detect the small failures of your company and solve them much earlier.
What is the origin of this indicator?
Now that you know what OEE is, you should know its origin, which dates back to a few decades ago in Japan. Seiichi Nakajima was the founder and developer of Total Productive Maintenance or TPM, a tool created to know the productive performance of industrial machinery and to calculate the efficiency of a production line. This Japanese tool is the precursor of what we know today as OEE.
After the creation of TPM, it was proposed to be able to create team responsibility and spirit of improvement in a measurable way. With this in mind, the OEE, or overall equipment effectiveness, appeared, which takes into account many more aspects
Advantages of incorporating OEE in your factory
Given that to improve you have to measure, the benefits that OEE can bring to your factory are powerful.
OEE leaves nothing behind, as it measures every aspect of your factory so that you can improve it. It's like knowing the power you are capable of and being able to find the strategies available to make it happen.
Here are the 6 main or most recognised benefits of introducing OEE in your factory:
- Refine your measurements - and consequently your decision-making ability, which is the most interesting part of the OEE definition. You will be able to discover which processes are efficient and inefficient and thus determine the steps for continuous improvement.
- Increase machine performance: By using an OEE system, you can maximise the performance of your machinery. You can either implement it on your old machinery or use OEE to measure new machinery or choose between different options.
- You will know your true factory: Unfortunately when using the OEE system it is often discovered that the efficiency is much lower than expected, but the good news is that it can be higher than first thought.
- Improved ROI or return on investment: perhaps this is probably the most important benefit or the one that gets the most attention. ROI is the return on investment, and like the definition of OEE, it is a crucial KPI. Better ROI means more economic benefits.
- Reduce costs (especially machine repair costs): thanks to OEE exercises you can find out if your machinery is working properly and if not, repair or replace it before it is completely disabled, which would result in higher costs and wasted time.
- Flexible and scalable: you can start measuring with the OEE definition only some machines or only certain teams or human resources departments and at your own pace you can scale it to the rest of your factory. Likewise, you can be satisfied with a few metrics first and after a few years, scale them up to scale your business.
In which companies can it be applied?
This is the best thing about the OEE system, it can be applied to all companies. It does not matter their capital, nor their number of employees, nor their sector, nor if they have more or less machinery... And according to the definition of OEE, it consists of measuring the efficiency of equipment, that is to say, of the set that is used to create wealth. It is therefore applicable to all companies.
Now that you know what OEE is, we would like to remind you that Mesbook has a proven management system that is effective in all types of factories, from large automotive factories, for example, to SMEs. Contact us without obligation and let's boost your business together.
