<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=974250883405448&amp;ev=PageView&amp;noscript=1">
Overall Equipment Effectiveness (OEE): The KPI for Improving Production Processes

Industry 4.0


Digital Advisory

Overall Equipment Effectiveness (OEE): The KPI for Improving Production Processes

Sara Cavinato | Oct 01, 2020

Industry competitiveness is driving companies to increasingly push for continuous improvement in reliability, performance, output quality and customer satisfaction. 

These goals can be achieved by defining KPIs such as Overall Equipment Effectiveness (OEE), which specifically helps identify and fill productivity gaps in continuous and batch processes. 

The fact is that any variation or deviation from standard operating procedures (SOP) will have an effect on both product quality and production performance. This can cause a lot of damage, especially in a regulated industry like pharmaceutical and chemical batch production.

How can I reduce consumption? And improve yields? Where can I take action to improve the quality of products? Do operators have the procedures fully under control? Can they compare current performance with past performance?

One way of responding to these questions is by using overall equipment effectiveness.


What is OEE and what is it for?

Overall equipment effectiveness is an index that summarizes equipment availability, process performance and product quality in a percentage value by identifying causes of downtime, negative performance deviations and product quality level (rejects, rework). 

The calculated OEE for each process unit can be broken down into three components:

  • Availability: percent of time the unit is available for processing, divided into planned downtime and breakdowns
  • Performance: production speed divided by expected speed. This is further divided into minor stops and speed losse
  • Quality: percent of products according to specification, compared to products sent for processing. This is further divided into Recycle and Scrap


Key components of OEE (Overall Equipment Effectiveness)


If the value of OEE alone can help in finding bad actors, i.e. batch processes with a lower OEE index, analyzing OEE components will give us important information on how these processes can be improved. For example, low availability can correspond to planning inefficiencies due to long transients or cycles that do not finish on time, which has an impact on further planning.


OEE for batch and continuous processes

There are some differences between the calculation of OEE components for batch and continuous processes: in batch processes, cycle and transition times are analyzed, whereas for continuous processes, the focus is on the rate of production.


  OEE for continuous processes OEE for batch processes
Availability Machinery actual production time Production times excluding downtime
Performance Yield predicted as the ratio between the actual production and the maximum capability production for the machine Yield predicted as the ratio between actual production and the hypothetical production capability within the production time net of downtime
Quality Quantity produced compared to the maximum quantity that the machine is able to produce, according to specifications Quantity produced according to specifications, compared to a target value

How is OEE implemented? What are the benefits?

Taking the assumption that everything that can be measured and automated can be improved, the best way to implement the OEE calculation is to adopt a software that can be integrated into your own manufacturing execution system (MES) and that can acquire the information needed to make calculations automatically.

The greater the number of data sources acquired automatically, the better the analyses that the software can produce automatically. It allows people to note causes of under-performance and assess opportunities for improvement.

Monitoring and calculating OEE can have some real advantages:

  • Improved economics and main production drivers: yields, production, energy, quality
  • Reduced downtime and cycle times leading to maximized productivity
  • Ability to identify correlations between particular products, processes, machinery and performance losses
  • Continuous improvement training for operators, with a focus on the concepts of availability, performance and quality.


In a nutshell, OEE is an easy analysis to implement and provides real benefits in terms of improving the production process. Techedge has gained particular experience in implementing OEE solutions across a range of MES and business intelligence platforms, and we are ready to offer you our experience to help integrate them into your world.


Other articles of this series on Digital Advisory:


New call-to-action