Why Should I Calculate OEE Manually?

OEE (Overall Equipment Effectiveness) is a valuable KPI for how well machines on the plant floor are being utilized. (More information on what OEE is can be found in the Intro to IoT blog post) It is often thought to be a complicated value to calculate, and sometimes it can be. However, it can be greatly simplified. Given the value and the potential simplicity it is recommended that operations staff including their supervisors and managers should know how the calculation works, what OEE is, and how to use it effectively.

Why is OEE Valuable?

OEE has a direct correlation to the revenue the machine provides the manufacturer. If the machine isn’t utilized well, i.e., if it’s down or if it’s producing poor quality parts that cannot be sent to a customer, then the machine isn’t generating as much revenue as it otherwise would.

It’s also valuable because breaking the value down into is parts can help hone in on the cause of issues with a machine. It is made up of three separate percentage values: Availability, Performance, and Quality. One can look at the component values and determine where to start their analysis to find issues with the machine.

Why Calculate Manually

Why should operators and related staff calculate OEE manually? Two reasons:

  1. To understand what OEE really means and what it’s made up of, and
  2. To get a solution calculating OEE in place when an automation solution isn’t available.

Understanding OEE: One can only understand another person’s perspective when they’ve walked a mile in their shoes. In the same way a person can only understand a concept once they’ve recreated it themselves and worked with it. The nice thing is that OEE, or at least some parts of it, can be calculated easily on paper.

Automation isn’t available: In many manufacturing companies OEE will likely be calculated automatically by various systems such as IoT software platforms (these are the solutions we often implement). These solutions are becoming more predominant as companies look for more ways to pull valuable data from their machines to complete…all under the moniker of Smart Manufacturing. However, some companies may want to start utilizing OEE before budgets can be made available for these solutions. So, why not start when pen and paper!?

How to Calculate Manually

A deeper discussion of the calculation of OEE can be found in this How OEE is Calculated blog post. So we won’t cover the details here.

To calculate OEE all you need is pen, paper, maybe a clipboard, and diligent effort to record and calculate the data regularly. It is also helpful to have Excel available. Don’t need anything more fancy than that.

You can start with Availability, one of the components of OEE. Put the paper, pen, and clipboard close to the machine to measure. Then every house have users mark what happened with that computer regarding it’s availability: If it was up and running at normal speed mark a “G” for Green (can include planned downtime if appropriate). If the machine experienced some setup or adjustment time during that hour, mark a “Y” for Yellow. If the machine was down, mark “R” for Red. You could also use colors pens/markers and/or whiteboard.

Then count the total number of G’s, Y’s, R’s. Subtract the total number of Y’s and R’s from the total number of G’s to get the number of hours the machine was available to run. Count the total number of hours over all on the paper no matter the condition for the scheduled operating time. Then divide available time by the scheduled operating time and you get the Availability Rate % value.

Do this for each day, record the results in Excel, maybe even create a simple chart, and you’ll start to see a trend for where the OA (Overall Availability) for the machine is. If you do this for multiple machines you can then get some solid, objective data on the status of the various machines, and which might need some attention.

You can also repeat this process recording similar data for Performance and Quality.