OEE in Your Manufacturing Process
29 Feb

Improving OEE in Your Manufacturing Process: A Step-by-Step Guide

Mahipal Nehra

Utilized as a performance measure, it can play a crucial part in efforts to drive efficiency and uncover opportunities to elevate productivity and cut costs along the process. It can also boost a manufacturer’s competitive edge and propel efforts to streamline operations throughout the enterprise. To that end, this step-by-step guide will walk through how you can improve OEE in your manufacturing with a focus on essential strategies and best practices along the way.

What is OEE and Why is It Important?

In its simplest terms, Overall Equipment Efficiency (OEE) is a critical measure of the effectiveness of machines, equipment, and processes within a manufacturing operation as well as the goods they produce over a given period. It comprises three critical components: availability, performance, and quality.

Here’s a brief breakdown of why OEE is so crucial for the manufacturing process.

  • For starters, measuring OEE gives manufacturers the ability to drill into underlying performance problems, and identify areas of inactivity that can be targeted for improvement.

  • OEE provides a good view of how well your equipment is being utilized (more specifically the percentage of time the equipment is running), and how good you are at keeping your equipment running. If you eliminate the “idle” and “stop” time on a machine, you can vastly improve OEE.

  • As OEE finds specific opportunities to leverage performance improvements, manufacturers can save on costs that go towards overtime work, scrap, rework, fewer backorders, and fewer lost sales.

  • Perhaps most importantly, having a higher OEE will allow you to better meet deadlines and put out high-quality products for your customers, improving your company-to-customer relationship. Many manufacturers know how it feels to lose the respect of their customers, so raising OEE will virtually guarantee excellent on-time delivery, time. Great products for your customers mean they’re happy.

Quality measures the percentage of products produced that meet the desired specifications and standards. It takes into account defects, rework, and scrap. Improving quality involves implementing quality control measures, performing regular inspections, and training employees to adhere to quality standards.

Calculating OEE and Interpreting the Results OEE is calculated by multiplying the availability, performance, and quality percentages together. This equation provides a single value that represents the overall efficiency of the equipment. Interpreting the results of OEE calculations is crucial for identifying areas of improvement. A high OEE value (close to 100%) indicates that the equipment is operating at its maximum efficiency, while a low OEE value suggests room for improvement in one or more components (availability, performance, or quality). By analyzing the OEE results, manufacturers can prioritize efforts and focus on the areas that require the most attention.

Common Causes of Low OEE Some common causes of low OEE in manufacturing processes include:

  • Unplanned downtime due to equipment breakdowns or failures.

  • Inefficient changeovers and setups, lead to excessive idle time.

  • Inaccurate or slow quality control processes, resulting in rework or scrap.

  • Lack of preventive maintenance, leading to increased breakdowns and downtime.

What Manufacturers Should Do to Avoid the Most Common Reasons for Low OEE

  • Inefficient production flow, causing bottlenecks and delays.

  • Lack of employee training and engagement, leads to errors and inefficiencies.

Step 1: Identifying Areas for Improvement

Conducting a Thorough OEE Analysis

The first step in improving OEE is to conduct a thorough analysis of the current state. This involves collecting data on availability, performance, and quality metrics for the equipment under consideration. The data can be collected manually or by using automated systems such as data loggers or OEE monitoring and reporting software like LineView.

During the analysis, it is crucial to identify specific areas of low performance or inefficiency. This can be done by comparing the OEE results against industry benchmarks or best practices. By focusing on specific areas for improvement, manufacturers can allocate their resources more effectively and achieve meaningful improvements in OEE.

Identifying Bottlenecks and Areas of Low Performance

Identifying bottlenecks and areas of low performance is crucial for targeted improvement efforts. This can be achieved by analyzing the data collected during the OEE analysis and conducting observations on the shop floor. Bottlenecks and areas of low performance can be caused by various factors, such as equipment limitations, process inefficiencies, or lack of employee training.

For example, your availability goal may be to eliminate all bottlenecks and achieve 90% uptime over the next 12 months, while also keeping track of all unscheduled downtime (breaks, setups, etc.) and adding them to the improvement list.

This “focused factory” approach enables you to further prioritize your improvement efforts to only the most significant availability issues so that you can make the largest impact in the shortest period of time. As a result, the goal of setting realistic targets for each OEE component is to help establish the environment and conditions in which everyone can win.

Major OEE improvement occurs by having:

  • Everyone working together in a team

  • Everyone works in the same direction.

Also, remember to monitor performance metrics. This enables you to see if the changes are effective

These metrics can be used to direct the “teamwork,” thus allowing it to do something more than it has ever done before or get somewhere it has never been. Remember that the goal of OEE metrics is to physically make products while achieving ever-increasing production effectiveness without adding employees, equipment, or production time.

Establish and Track Targets

Monitoring and reviewing targets regularly is essential to tracking progress and making the necessary adjustments. By consistently setting targets and monitoring the extent to which they're met, manufacturers remain focused and motivated.

Step 2: Putting Preventive Maintenance in Place

A. The Role of Regular Maintenance in OEEImproving OEE would be unthinkable without regular maintenance. Regular, preventive maintenance refers to the routine inspection, servicing, and repair of equipment so that it stays in top condition. By setting in place a preventive maintenance program, manufacturers reduce unplanned downtime, extend equipment life, and increase availability.

Preventative maintenance encompasses a range of activities, such as lubrication, calibration, cleaning the equipment itself, replacing components, etc. Each and every one of these activities requires a separately delineated schedule and checklist if the company is to achieve the consistency and completeness that it's aiming at. Learn more... B. Make a Preventive Maintenance Schedule

Draw up a preventive maintenance schedule by identifying the maintenance tasks that the equipment requires and the frequency with which they'll be performed. Depending on the equipment in question, the schedule might be based on information from the manufacturer, data from past experiments, or general industry knowledge.

OEE depends on numerous factors including preventive maintenance. Manufacturers should create a preventive maintenance schedule in collaboration with maintenance personnel and production teams. From there, regular inspections and audits can be conducted. Regular inspections and audits ensure compliance with the maintenance schedule. Areas for improvement can also be identified.

Manufacturers can also leverage predictive maintenance techniques to drive OEE higher. Predictive maintenance relies on technology – such as sensors and predictive analytics – to monitor equipment conditions and anticipate failures. Manufacturers can use predictive maintenance to monitor key parameters like temperature, vibration, or power consumption.

At the first sign of equipment deterioration or a fault, manufacturers can perform proactive maintenance to reduce the risk of unplanned downtime. Predictive maintenance techniques can contribute to substantial gains in availability and performance; as a result, they can help a manufacturer improve OEE.

Analyzing Changeover Times and Identifying Opportunities for Improvement

Changeover times lead to downtime and create a drag on the overall equipment performance. As such, manufacturers need to analyze changeover times, identify opportunities for improvement, and find ways to reduce changeover times.

Ideally, manufacturers should measure the changeover time of machinery and equipment and document the sequence of steps necessary to complete changeovers. Now, a manufacturer can review the data collected and look for steps that can be eliminated, simplified, or automated. By doing so, a manufacturer can reduce changeover times.

Manufacturers can identify bottlenecks, non-value-added activities, or manual processes by analyzing changeover data. They can use this data to eliminate or streamline these activities using other lean manufacturing principles such as SMED (Single Minute Exchange of Dies) techniques, which are used to improve OEE by applying lean manufacturing strategies to optimize changeovers and setups. Techniques such as SMED enable the team to focus on minimizing the time it takes to perform internal (non-value added) activities including preparing tools, cleaning, or adjusting equipment. Manufacturers can analyze the changeover process to eliminate or combine any non-value-added activities, which can, in some cases, significantly reduce changeover times and increase equipment availability. Creating and implementing standardized work instructions and visual management tools can help ensure consistency and efficiency during changeovers.

Implementing Lean Manufacturing Techniques for Faster Changeovers

Streamlining production flow means identifying and eliminating non-value-added activities. Non-value-added activities involve tasks and processes that do not add to the quality or value of the end product. These are activities such as excessive movement or transportation, waiting time, or unnecessary inspections.

By mapping out the production flow and value stream, manufacturers can identify these non-value-added activities and eliminate them. Lean manufacturing principles such as 5S and Just-in-Time (JIT) manufacturing, in particular, can help with this. These principles focus on organizing the workspace, eliminating waste, improving workflow, and making sure production is in line with customer demand.

Implementing Lean Tools and Practices

To improve OEE and streamline production flow, manufacturers can implement an array of lean tools and practices. Some of the most widely used tools and practices include:

5S: By implementing the 5S methodology, manufacturers can organize the workspace, reduce clutter, improve cleanliness, and standardize processes. The five steps of 5S are Sort, Set in Order, Shine, Standardize, and Sustain.

Kanban: By implementing Kanban, manufacturers can better manage inventory. This ensures a smooth flow of materials and eliminates waste in the production process. The system involves using visual cards or signals to indicate when it is time to replenish materials or components.

Standard work is important for several reasons. First, it guides employees on how a job is done and ensures that work is done consistently. It also helps to reduce errors, helping to free up a company’s resources and giving them the ability to handle greater production volume. Finally, standard work documents are the best-known way to perform the work, providing a baseline for ongoing improvement and improvement events.

Pull systems like Just-in-Time (JIT) or Kanban can work in conjunction with Heijunka to produce goods based on customer demand. This reduces the level of inventory required, enabling a manufacturer to increase flexibility and reduce the risk of overproduction.

When these lean tools and practices are applied, manufacturers can reduce lead times, eliminate waste, and improve the overall flow of production. This can result in more equipment availability, better performance, and more quality products, leading to higher OEE.

Step 3: Implementing Quality Control Measures

Importance of Quality Control in Improving OEE

Quality control is another key to OEE. Since quality ultimately determines the percentage of products produced that meet specifications and standards, any quality defects that are found represent a reduction in OEE. By most accounts, the practice of quality control is as old as 3,000 years, and can arguably be traced back to the ancient civilizations of the Egyptians, Greeks, and Chinese.

Although quality is a multifaceted issue, it boils down to two concepts; customer satisfaction and profit. If your products are poor in quality, customers won’t be satisfied. This will lead to fewer sales, and a decreased profit margin shortly thereafter.

Of course, the goal is always to produce high-quality products. In today’s world, there are a wide variety of quality control practices that can help you to do just that, including SQC, SPC, FMEA, and the DMAIC process.

Establishing Quality Control Processes and Procedures

Throughout history, manufacturers frequently have operated under “sink or swim” conditions. If the parts they produced didn’t meet customer specifications and standards, the relationship was over; and the factory not far behind. Today that’s not the case, as customers are quick to point out mistakes and even quicker to take their business elsewhere.

As Dr. Deming once said, “If you don’t know what the customer wants, even the best accounting system in the world won’t help you.” To say it another way: find out how well you need to perform and how well you are performing compared to that standard.

Normally, once a factory starts producing parts that meet the customer’s specifications and standards, they’re left alone to continue. If defects do start showing up, however, you have to get on them immediately. And as luck would have it; three fairly simple tools that can get you going in the right direction are the 5S, the 5 Whys, and the 6 M’s.

Most suppliers don’t realize this ‘right from the beginning’ philosophy involves what truly are shifts in their company cultures. And that shift usually takes more time than even the most cautious companies allow for its adoption. Therefore, it should come as no surprise that the Toyota Production System’s purpose wasn’t so much to establish processes and standards, but to change the company culture from one that fears making mistakes to a company that fears not making any.

To successfully implement quality control measures, various techniques can be used including statistical process control, Six Sigma methodologies, and Total Quality Management (TQM) principles; the choice of technique will depend on the production process and industry requirements.

Training Employees and Cultivating a Quality-Minded Culture

Proper training of employees is essential to the successful implementation of quality control measures. This may include training on quality standards, effective inspection techniques, and methodologies for problem-solving. Cultivating a quality-minded culture whereby employees feel ownership and pride in the work they produce and are driven by a commitment to delivering products that meet the highest quality standards; entails attention to detail, ongoing training, open communication, teamwork, and a strive for continuous improvement.

Regular communication, feedback, and recognition for quality achievements are crucial to developing a quality-minded culture that encourages process improvements and rewards employees for their dedication to delivering a final product that meets the highest standard of quality.

Step 4: Continuous Monitoring, Analysis, and Improvement

Regular Monitoring and Analysis of OEE Metrics

Continuous monitoring and analysis of OEE metrics are necessary to sustain and improve efficiency in manufacturing processes. This involves the regular collection of data on availability, performance, and quality metrics, and its analysis to identify trends, patterns, and areas which require improvements.

Continuous Improvement Initiatives

To continue to improve OEE, manufacturers need to encourage and support continuous improvement initiatives. This can be accomplished through a range of techniques, such as Kaizen events, suggestion programs, or cross-functional improvement teams. Manufacturers should provide employees with the resources, tools, and training they need to further support their improvement efforts. Regular recognition and awards for improvement achievements will also motivate plant floor staff and help sustain a culture of continuous improvement.


Improving Overall Equipment Efficiency (OEE) is a systematic process that involves analyzing the current state, identifying areas for improvement, setting goals, implementing strategies, and continuously monitoring and analyzing the results. By addressing the availability, performance, and quality components of OEE, manufacturers can optimize their overall operations and achieve higher levels of efficiency, productivity, and profitability.

By following the step-by-step guide provided in this document and implementing the recommended strategies and best practices, manufacturers have a great potential to significantly improve their OEE ultimately expand their business and strengthen their competitive position in the market.

Posted by Mahipal Nehra | Posted at 29 Feb, 2024 Web