OEE Calculator

Calculate OEE

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Calculate OEE components

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How Does the OEE Calculator Work?

The first part, “Calculate OEE”, in the OEE calculator delivers the value using minimum information:

  1. Your scheduled working time (per month)
  2. The number of good products (per month)
  3. And your theoretical maximum production speed

To calculate your OEE in a simple way, this is all you need.

The second part, “Calculate OEE components”, gives you the values of Availability, Performance, and Quality components of OEE. This part needs additional information:

  1. Sum of all machine stops, per day (or downtime). We then multiply this value with the number of working days per month.
  2. The number of scrapped products or products needing rework (per month)

You may notice that if you change the second part in the calculator, the OEE value does not change, only OEE components change.

To understand everything in more detail, please continue reading the article.

How Is OEE Calculated?

The essence of the OEE formula can be expressed as follows:

Overall Equipment Effectiveness (OEE) shows how many products you actually produce, as a percentage of how many you COULD produce if the equipment was running at theoretical maximum speed with zero scrap and rework.

If we replace the words in this sentence with numbers:

OEE

Number of good products you produce

Number of products you could produce theoretically

* The values in this formula and the in following calculations are based on default settings of the OEE calculator.

* The values in this formula and the in following calculations are based on your OEE calculator settings.

The “number of products you could produce theoretically” refers to your theoretical maximum for the given time period:

OEE

Number of good products you produce

Number of products you could produce theoretically

You get the theoretical maximum () if you multiply the scheduled working time () of your machines with your maximum production speed ()

OEE

Number of good products you produce

Number of products you could produce theoretically

Number of products you produce

Scheduled working time x Maximum production speed

OEE

Number of good products you produce

Number of products you could produce theoretically

Number of products you produce

x

How to find out your maximum production speed?

Sometimes the manufacturer of the machine specifies it (alternative terms – “nameplate”, or “ideal cycle time”). If not, you can identify the fastest recorded time by looking at historical performance and then calculate how many products you would make if your machines were constantly running at that speed.

Why is calculating just OEE (without knowing it’s components) useful?

Being able to calculate OEE with minimum information means that you can find it out as early as possible, without knowing your downtime and quantities of scrapped products. This helps you set a baseline that you can use in the future to evaluate your trends and the impact of process improvements. It also allows you to benchmark within the company and against industry averages.

From our experience, most of Evocon’s clients initially overestimate their OEE values compared to the actual numbers measured with an automated system. This will often come as a surprise but also highlight great opportunities for improvement.

How to Calculate OEE Components and Why?

Now that you know how to calculate OEE in a simple way and set your baseline using our OEE calculator, you can set your target OEE and focus on improving your OEE. This is where the OEE components come into play:

  • Availability
  • Performance
  • Quality

The reason to calculate the components and not just OEE alone is that they show you how to improve OEE and eliminate the Six Big Losses in Manufacturing. For each of these components, there are different strategies and methods of improvement.

How to calculate Availability?

Let’s first define what availability is:

Availability is essentially the time that your machines are actually working, as a percentage of scheduled working time.

DOWNTIME
Scheduled working time
ACTUAL WORKING TIME

Have a look at the Availability formula explained.

This OEE component is especially useful in the beginning when you just start improving your OEE. Availability improvements are the “low hanging fruits”. Downtime is fairly straightforward to estimate and solutions often become obvious as soon as you start recording reasons for machine stoppages.

How to calculate Performance?

Performance (or production speed) shows how fast your machines or production lines are running.

100% Performance means that they are running at their maximum speed. 50% means that they are running at half the speed and producing only half the number of products.

So, to calculate Performance, you need to find out:

How many products you produce, and how it compares to the number of products that you could produce at maximum speed during your actual (not all scheduled, but actual) working time.

Performance loss due to slow running machines
Number of products you could produce at maximum speed during your actual working time
Number of products you produce

Have a look at the Performance formula explained.

Turning your attention to Performance opens up new possibilities for improvement because Performance issues are often overlooked and underestimated by management. They are also difficult to detect if you collect production data manually. Therefore, implementing an OEE system gives you significant advantages.

How to calculate Quality?

Simply put:

Quality shows the portion of good products among all products.

Scrap and rework
All products
Good products

Have a look at the Quality formula explained.

Defects are expensive since you waste the materials and lose all the production time spent making products that are scrapped in the end. In the case of rework, the extra time spent is wasted and in most cases, rework creates extra losses due to interruption of the standard workflow.

How Do All OEE Components Work Together?

OEE components are often visualized as each of them being a percentage of the other one. Below is a visualization of this concept:

As you can see above, if you multiply all OEE components with each other, you will get the OEE value. Accordingly, if you know your OEE value and only two OEE components, you can find out the missing OEE component.

Why Automate Your OEE Calculation?

Even though you can use our OEE calculator to estimate your current level, we still recommend an automated solution. Below is a brief explanation as to why.

Manual production monitoring

Manual production monitoring means that you use a stopwatch to track how long your machines work or sit idle. You could write down the times and notes with a pen on paper, or you could enter it in an Excel spreadsheet. Either way, it means that human measures the work of a machine.

Manual production monitoring has a long history in manufacturing and provides significant benefits. It is quick and easy to implement and allows you to capture the most significant machine stops.

If the person who monitors production notes down the reasons for those machine stops, a simple analysis of data, later on, reveals the most popular downtime reasons. By eliminating these downtime reasons, you can improve your Availability.

Automated production monitoring

However, manual production monitoring has a few problems. By installing an automated production monitoring system, you can achieve much more:

  • Track smaller but frequent stops which add up to significant losses and often go undetected.
  • Measure the production speed of your machines.
  • See real-time OEE, visualized on the screen.
  • Be sure that the data is complete and accurate, even when your staff do not have time to monitor production due to having more urgent tasks.

As you can see, automating production monitoring allows you to:

  1. have better production data,
  2. do more with it,
  3. and sooner.

In other words, this is how you can achieve your full potential, which we talked about at the beginning of this article. Read more about how Evocon helps your company.

Top 3 OEE Calculation Mistakes and What to Consider When Measuring OEE

We hope that our OEE calculator and explanations show how simple it is to calculate OEE. But we would like to point out that there is also room for mistakes.

As we mentioned above, manufacturers tend to overestimate their efficiency levels. The most common mistakes highlight some of the reasons for that:

  1. Excluding stops from the Availability calculation. We often see that clients do not interpret stops such as product changeover, lunch, or rest breaks as Availability loss. Even though we can’t eliminate such stops from the processes completely, in the Six Big Losses framework they should still be treated as Availability losses. It is always possible to improve the process and reduce, for example, the changeover time and reorganize the work to avoid machines being stopped for coffee breaks (machines don’t drink coffee:).
  2. Not using the real maximum speed (Nameplate Capacity, Ideal Cycle Time) when calculating the Performance. Quite often, we see that manufacturers use their internal target speed instead of the maximum. This results in incorrect Performance values above 100% when an automated OEE system is set up based on these values.
  3. Leaving out the Quality component from the OEE calculation. This means that scrap and rework are not considered which can lead to unwanted results. There is always a link between quantity and quality. By focusing only on maximizing the output, we can say with confidence that the quality will start suffering and vice versa. That is why the OEE components also have a balancing effect in this context.
evocon monitoring quality
Evocon monitors quality automatically

Besides these OEE calculation mistakes, you will find it useful to look into the typical mistakes of monitoring OEE which you can find in this article.

How to Improve OEE?

Now that we have talked about measuring and calculating OEE, let’s take a look at how to improve it.

We have made a list of 7 practices that brought the most success to our clients:

  1. Designating a champion for OEE implementation
  2. Automating data collection and reporting
  3. Visualizing and displaying real-time OEE on the shop floor
  4. Commenting all production stops
  5. Implementing cross-functional daily review and discussion sessions
  6. Eliminating the Six Big Losses
  7. Utilizing Root Cause Analysis

Conclusion

There are two ways to calculate OEE using our OEE calculator and each of them has its benefits:

  • you can use the simple way to calculate OEE quickly and with the minimum of data so that you know the potential of your machine or production line,
  • or you can calculate OEE components so that you know how to improve your OEE.

We have shown you in detail how the OEE formula works in both cases.

While it is possible to benefit from calculating OEE manually, you will get much more out of your OEE if you have automated OEE software. You will be able to see the performance of your machines or production lines visualized in real-time and to act based on accurate and reliable production data (like our clients did).

Now that you understand the OEE formula, please check out our other articles on how to increase your OEE in practice:

Troubleshooting the OEE Calculator

You got a message saying “Should not exceed …”, and Performance is over 100%

The reason is that the sum of values in your “Quantity produced” and “Sum of scrap and rework” fields is too high.

If you are sure that your “Quantity produced” and “Sum of scrap and rework” are correct, try adjusting other settings:

  • You could be underestimating your theoretical maximum speed. Try increasing it.
  • Your working time may be set too low. Try increasing either “Working hours per day” or “Working days per month”.
  • Or, you may have set your “Sum of all machine stops per day” too high. Try decreasing it.

You got a message “Speed set too low”, and Performance is over 100%

It is common among manufacturers to underestimate their theoretical maximum production speed which means that calculated Performance is more than 100%. But in the OEE framework, your Performance should never be above 100%.

How to find out your maximum production speed? 

Sometimes the manufacturer of the machine specifies it (alternative terms – “nameplate”, or “ideal cycle time”. If not, you can identify the fastest recorded time by looking at historical performance and then calculate how many products you would make if your machines were constantly running at that speed.

If you are sure that your maximum speed is correct, try adjusting other settings:

  • Decreasing “Quantity produced per month” or “Sum of scrap or rework”
  • Increasing “Working hours per day” or “Working days per month”
  • Decreasing “Sum of all machine stops per day”

Back to the calculator

Learn more about the different mistakes that manufacturers tend to when calculating and monitoring OEE: Top 8 OEE Calculation & Monitoring Mistakes.

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