Is OEE Outdated?
OEE has been around for almost 40 years. It’s middle-aged. Its nuances and subtleties have
been debated endlessly. Is it outdated and old news? Or is it still relevant?
In our opinion it’s both. Here’s why.
Outdated OEE – A Score
OEE is a standardized way to measure manufacturing productivity. It’s conceptually very simple
to calculate:
(Good Pieces x Ideal Cycle Time) / Planned Production Time
OEE gives you a score that measures how close your manufacturing process is to ‘perfect
production’ – making only good pieces, as fast as possible, with no down time.
The problem is – looking at a score is inherently backward looking. While the score will tell you
how you are doing, it won’t help you to improve.
Relevant OEE – Taking Action
If the OEE score doesn’t add value, what does? The true value of OEE lies in understanding and
acting on the underlying losses.
Effective actions are guided by accurate and insightful information. From the perspective of
OEE, a good starting point is measuring all three OEE losses (Availability, Performance, and
Quality), as well as the associated Six Big Losses and assigning reasons to each instance of
Down Time.
Let’s look at examples of three very specific information-based actions you can take to improve
OEE. They are all based on Availability, which is the largest OEE loss for most companies. Each
example uses an out-of-the-box visualization from the Vorne XL Productivity Appliance.
Action 1 – Visualize Down Time
Visualizing down time in the context of other production states frequently identifies interesting
patterns – and actionable improvement opportunities. For example:
Down after Setup: The topmost manufacturing process has a changeover (yellow)
followed by a significant down event (red). This could indicate poor changeover
procedures, material issues, or a lack of operator training.
Down after Break: All four manufacturing processes have a break (blue) followed by a
down event (red). In many cases this indicates a late return from breaks.
Emergent Problem: The bottom process was running well until the break, after which
there are lots of short down events. This indicates that after this break, something
changed that is now causing down time (e.g., a material, a setting, or an operator).
Action 2 – Compare Changeovers
In manufacturing, consistency is king. This is especially true of changeovers. Here is an example
where First Shift consistently achieves 12-minute changeovers with a small amount of variation,
while Second Shift averages much closer to 20 minutes with a lot of variation – for the same
part. This is a clear opportunity to transfer knowledge and best practices from First Shift to
Second Shift.
Action 3 – Manage Down Time
It’s easy to get lost in the details of down time. It's also important to look at the big picture. Pick
a longer time period and compare how different teams do with:
Mean Time Between Failure (MTBF): How long, on average, the process ran before it went
down. Longer is better. It’s a good measure of how well the teams are running the equipment.
Mean Time to Repair (MTTR): How long, on average, the process was down before it was
restarted. Shorter is better. It’s a good measure of how responsive teams are to down time on
their equipment.
In this example it is clear that Team 2 is most effective at managing down time. They have the
highest MTBF, and shortest MTTR. How can you leverage that to help the other teams? More
training? Better support?
