Q: What does OEE not show?

Daniel Högfeldt •    OEE is a good way for looking at a single machine’s performance. However it does not really say how the entire plant is performing. It says how the plant is performing based on how much each machine was scheduled to run but not based on how machines are utilized in the plant. It does not say anything about if the plant makes a profit or not. An example on how the situation could look like in a plant is shown in example 2.

Example 2: How a plant could look like.

Let us say that the plant has 15 machines on the shop floor. They used to have many orders and ran all the machines every day. Their overall plant OEE used to be 63%. These days the orders have dropped and they only run 5 out of the 15 machines. On those 5 machines they have a plant OEE of 90%. Is the plant doing better now than it used to?

OEE would not say anything about the situation in example 2. If that number is the only thing that is looked on then management could think that the plant is doing a lot better now than it used to, 90% OEE now and 63% OEE before.

Of course the plants are looking at what kind of profit they are making, but looking at the OEE number will not provide any other information than how effective the machines/plants are in relationship to the planned time it had to operate.

There are however easy ways to include some utilization calculations on the same sheet as the OEE calculation is made (Koch 2003).

OEE is not the perfect tool for comparing plants. The corporate does not really have control of what is put into the calculation. The number is very easy to manipulate. One example could be if a plant has a low OEE number on some machines but want to invest in new machines because of new orders coming in. Then the plant could change the ideal cycle times to get a higher OEE number and then claim that they need new machines, while the truth could be that all they need to do is to work on reducing waste on the machines to get more capacity.

Master’s Thesis: PLANT EFFICIENCY A value stream mapping and overall equipment effectiveness study

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