For a more comprehensive productivity calculation OEE (Overall Equipment Effectiveness) should be used. OEE takes into account the speed at which the machine or factory runs, the quality of the finished products produced and the actual machine operating time versus the available operating time. OEE is best calculated per machine rather than across the whole factory as it is then easier to identify where improvements need to be made to help improve productivity. OEE is calculated as:
Performance x Availability x Quality
Performance is the speed at which the machine or work station runs expressed as a percentage of the speed it is designed to run.
Availability is the asset operating time expressed as a percentage of available operating time.
Quality is the total number of good units produced expressed as a percentage of the total number of units that were started.
Availability — The widget making machine is capable of producing 100 units every hour. The production day is 8 hours, so the machine is capable of producing 800 units per working day. But, today there is a downtime of 1 hour due to maintenance and a shortage of materials so this means that the machine will only be working for 7 hours.
Actual Operating Time (7 hours)/Available Operating Time (8h hours) = Availability of 87.5%
Performance — During the 7 hours of operating time that were available today, the machine produced 625 units. The amount of units the machine is able to produce within an hour is 100. So the theoretical time need to produced 625 units is 625/100 = 6.25 hrs. The performance of the machine is;
Theoretical time (6.25 hrs)/Available time(7 Hrs) = 89% Performance
Quality — Of the 625 units produced today, only 600 of the units were of good enough quality to be sold. The other 25 units need to be reworked before sale or scrapped. This means that the good units expressed as time is 600 units/100 units per hour = 6 hours. So the quality is;
Good Units expressed in time (6 hrs)/Performance time (6.25 Hrs) = 96% Quality
So our final OEE calculation is
Performance (89%) x Availability (87.5%) x Quality (96%) = 75% OEE
This calculation shows that the total losses during the day for this machine were 25% which equates to 2 hours of lost production time. Over time, this adds up to a large amount of lost production time, therefore decreasing the profits that could be made if the productivity of the machine was higher. It is therefore very important to identify the root causes of this loss and to then implement the necessary measures to reduce or eliminate the losses.
To make it easier for you to calculate OEE in your factory or process we've created a downloadable OEE calculator. Simply complete the form below to download your free OEE calculator tool.