Overall operations effectiveness (OOE)
What is OOE and how to use itDownload your guide to using maintenance metrics
What is OOE?
Overall operations effectiveness (OOE) is a maintenance metric used to measure the availability of general production lines, from beginning to end. This includes planned maintenance for machines, even though machines are not productive during maintenance times. Other factors that are taken into account include changeover times.
OOE is a type of manufacturing maintenance metric that falls into the same category as total effective equipment performance (TEEP) and overall equipment efficiency (OEE). These three metrics measure overall equipment performance by taking into account machine performance, quality, and availability.
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How to calculate OOE
Given that OOE takes into account the maximum total operation time, the formula used to calculate OOE is the following:
Performance x Quality x Availability (where availability = actual production time / uptime)
A company that manages its production well will have an OOE of at least 85%.
What’s the difference between effectiveness vs. efficiency?
The terms effectiveness and efficiency are often confused or used interchangeably.
Effectiveness refers to how suitable something is, or has been, to achieve a specific goal. It measures if the intended result is actually produced.
Efficiency is about performing at the best capability with the least waste of time and effort. In other words, being effective is if you achieved your goals while being efficient is if you achieved your goals by doing it the right way.
Operational efficiency is defined as the ratio of input to output of daily activities achieved by a business. Improving operational efficiency means to improve the output / input ratio.
An output is usually in the form of a financial figure, such as turnover, margins, and cash. An output can also be non-physical, such as new customers, customer loyalty, speed, agility, production, quality, or innovation.
An input is anything that enters the production process, such as money, people, and other resources.
What factors influence the Overall Operations Effectiveness (OOE)?
OOE is a measure of the performance of production lines or other assets. There are a variety of factors that affect the effectiveness of asset performance. The actual performance of an asset is measured as a percentage of theoretically complete performance.
Actual performance is rarely 100% because of the following factors:
Performance is measured as a percentage of the full possible performance. Machines or production lines may not be able to run at the same speed at all times of the day. It also depends on the type of product being produced. For example, a production line might take a longer time to produce a larger vs. smaller version of a product.
Quality refers to the number of good quality products as a percentage of the total number of products produced. Although businesses aim to have zero defects at all times, machines and production lines will always produce a small percentage of defective products.
Availability is measured as a percentage of full planned availability. A machine may not be 100% available if there are defects in the machine itself, or if the machine is down for maintenance.
Availability in this context means planned availability, so sudden defects are not included in the calculation. Other periods in which the machine does not produce are also not included, such as planned maintenance or product change.
4 tips for improving overall operations effectiveness (OOE)
The OOE maintenance metric is used to improve the decision-making process during situations such as when organizations increase their manufacturing capacity, aim to improve productivity, or want to enhance flexibility and scalability in their operations.
If demand is unable to be met and equipment is underperforming, it’s reasonable to believe there may be a problem with equipment effectiveness. However, if the equipment is working properly but is still unable to meet customer demand, it could be related to a capacity problem.
Improving the OOE applies not only to improving the effectiveness for equipment and production lines, but also for employees and business processes. The following five tips are recommendations on how to go about improving your OOE.
Create an environment that promotes open and effective communication
Improving the OOE of a company starts with good communication. Communication is essential in ensuring employees are all on the same page in understanding the company’s value proposition to customers, objectives, and standards.
By creating a collaborative and communicative environment in which there is collective reward, the entire company will work more smoothly and effectively. Every department and function within the company must be dedicated to customer satisfaction and high quality.
Communication is also important from a customer-facing standpoint. Systems such as customer relationship management (CRM) software are key channels of communication with customers. If the company receives complaints about a product or service, processes should be in place so that these complaints are received by the relevant department. A complaint about a defective product could help identify production issues before the situation becomes even worse and more costly to resolve.
Optimize product and supply management processes
Proper management of operational processes related to product and supply needs to be in place if you want to improve OOE and guarantee the highest quality of products and services. Some companies will designate a person such as a delivery manager to specifically oversee these processes and ensure that all steps, people, and processes in the entire process are properly sequenced and executed.
Place more emphasis on innovation and development
Employee training and development play an important role in improving operational effectiveness. Operational learning requires the collaboration of every employee and manager within the team. Documentation and defining best practices for each department is a must. Additionally, information and resources need to be easily accessible so employees can do their jobs efficiently and effectively.
It’s also important that infrastructure is regularly and properly managed and maintained. This ensures that company resources are organized in the most efficient way for employees to get work done. The best way to stay informed of how infrastructure could be improved is by getting feedback from the employees who are on the floor involved in operations that relate to efficiency.
Take advantage of new technology
To achieve a high degree of effectiveness, have the right technology in place and upgrade when necessary. Some vendors offer automatic upgrades while others require you to pay for upgrades. Either way, it’s important to stay informed of the latest technologies and understand how they can add value to your operations.