HOW IS OEE CALCULATED?

It has always been important to calculate indicators such as on-time shipment and stock turnover rate in manufacturing companies, but it is no longer enough to just follow and improve these indicators in order to gain competitive advantage. In the production industry, events during the production process are also important. It is a fact that competitive advantage now lies in intervening in the process immediately. In this way, the deviation between the planned and the actual is immediately noticed and the problems can be intervened immediately.
It is now a necessity to track the machines, employees and stocks we call in-production stock (WIP) in the production area. Therefore, production companies need indicators to monitor the effectiveness of the production process. Of all the KPIs, OEE is the only KPI to understand and monitor machine utilization rate and effectiveness. OEE is a globally accepted KPI and is originally used to improve production efficiency. Improving OEE dramatically increases production efficiency.
What is OEE?
OEE is an indicator used to monitor and measure real-time production and is calculated as a percentage only. For example, if the OEE indicator is 100%, it indicates that a production is made in the fastest possible way, without stopping and completely error-free. In addition, the OEE indicator has three valuable sub-factors; Availability, Performance, and Quality are factors. OEE is an indicator used as the product of these three factors.
One of the reasons why OEE is accepted worldwide is that it is also a very important indicator for Lean Manufacturing. Lean manufacturing initiates the necessary improvements, that is, kaizens, according to these OEE values and sub-factors. The causes of downtimes, speed losses and poor quality products can be seen thanks to OEE. In addition, the return on investment in the machine can be clearly learned with this calculation (ROI). Of course, an MES software is needed for this.
OEE objectives
Although the OEE indicator is considered a KPI, it is not mentioned much about what the target OEE should be.
• If the OEE indicator is 100%, an excellent production takes place.
• If the OEE indicator is 85%, then it means that world-class production is being made. Maybe a few minor improvements can be made.
• If the OEE indicator is 60%, it means that there is a need to make improvements, especially lean manufacturing methods and 6 sigma.
• If the OEE indicator is 40%, it is urgently necessary to monitor production and take measures to increase production efficiency urgently. A production monitoring and management software (MES) should be installed on the production site immediately and lean production studies should be started according to the results. This rate is really low and should be raised quickly.
How is OEE calculated? Let's calculate!
As we mentioned earlier, OEE has 3 factors; Usability x Performance x Quality
What is Availability?
Availability; It is related to whether there has been a setting or type change, or whether the machine has stopped involuntarily, usually due to a malfunction. The posture can be planned or unplanned. For example, although it is not possible to eliminate the setting time, it is also very effective to reduce this time and increase the availability rate. The issue of how to reduce set-up time is also a matter of lean manufacturing (see. SMED).
Availability is calculated as follows;
Availability (%) = Uptime / Net machine availability
*Uptime = Machine net availability time – Unplanned downtime
*Machine net availability time = Shift time – Planned downtime
What is performance?
Performance includes information about the speed of the machine and tells you whether the machine is running at the desired speed. While it is possible to work at full capacity at maximum speed in an ideal machine, the actual speed is usually slightly less. The reason for this slowdown may be in the form of small stops and waits (multitude), idle stops (idle) and reduction of working speed. With the elimination of these problems, performance losses are reduced.
Performance is calculated as follows;
Performance = (Ideal cycle time x Total production quantity) / Uptime
What is quality?
In the OEE calculation, the quality factor emerges as the amount of product produced without errors. If the quality factor is 100%, it means that all products are produced without errors, but unfortunately this does not happen often. The main focus here is to reduce the number of defective products as much as possible and to produce only quality products, which is also within the subject of lean manufacturing and 6 sigma (see. On-site Quality).
Quality is calculated as follows;
Quality = (Total production quantity – Total scrap) / Total production quantity
Let's continue with an example of OEE calculation.
Shift = 8 hours (480 minutes)
Downtime = 45 minutes
Breakdown = 50 minutes
Ideal cycle time = 2 seconds
Total production quantity = 10,000 units
Total scrap = 450 pieces

Availability = Uptime / Machine net availability time
Machine net availability time = Shift time – Planned downtime = 480 minutes - 45 minutes = 435 minutes
Uptime = Machine net availability time – Unplanned downtime (breakdown) = 435 min – 50 min = 385 min
Availability (%) = 385 minutes / 435 minutes = 0.88
Performance = (Ideal cycle time x Total production quantity) / Uptime
Performance = (2 seconds x 10,000 units) / (385 minutes x 60 seconds) = 0.86
Quality = Total production quantity – Total Scrap / Total production quantity
Quality = (10,000 units – 450 units) / 10,000 units = 0.95
OEE = Availability x Performance x Quality = 0.88 x 0, 86 x 0.95 = 0.72
OEE = 0.72 x 100 = 72%