What Is OEE and What Does It Mean?

There are many different industry terms when it comes to the manufacturing industry. You’ve likely heard a few of them yourself, and at times it may be hard to know what these terms mean. This is especially true if they’re referred to in an abbreviated form, such as the term OEE. But what does OEE stand for? What is its significance? Here’s everything you need to know.

What Does OEE Stand For?

OEE (Overall Equipment Effectiveness) is a vital tool for evaluating manufacturing operations' efficiency. Essentially, it shows the percentage of time that machines are effectively producing goods.

How OEE Works in Practice

As a productivity metric, OEE works by identifying the amount of manufacturing time that is spent being productive versus the amount of time spent not being productive. An OEE measurement contains three components, which are the following:

• Quality: The Quality metric is measured by determining how much of your manufacturing output meets your quality control standards. A manufacturing facility that does not produce any defective product is considered to have a 100% Quality rating.
  
  
• Performance: Performance, as a metric, indicates the speed at which your products are manufactured. A 100% Performance score means that you have no downtime during production runs due to slow cycles or small stops.
  
  
• Availability: The Availability metric measures the impact of longer-term stops, both planned and unplanned, during production runs. A 100% Availability rating indicates that your manufacturing equipment is not halted for significant periods of time during production cycles.

Putting All Three OEE Metrics Together

Under OEE, the goal of manufacturing production is to only produce parts that meet your quality control standards as quickly as possible with no long stops. OEE is used to identify where there may be components of your manufacturing process that are limiting your ability to meet these goals. Then, once these failure points have been identified, it becomes easier to address those points. This requires all three metrics to be measured and compared both individually and together.

The Last Word on OEE

The manufacturing industry is often apart from other types of businesses, as the primary goal of a manufacturer is to produce products to offer to their customers. It is, therefore, a primary concern that those products are fabricated quickly and at a sufficient level of quality. Using OEE as a standard metric for evaluating overall productivity helps manufacturing companies achieve their goals.