Overall Equipment Effectiveness (OEE) is a common manufacturing KPI for equipment productivity. If OEE is 100%, a work center is considered at full capability during planned production time.
OEE = Availability x Performance x Quality. Availability means “is my equipment available to do work?” Performance is actual throughput/ideal throughput. Quality is the ratio of good quality units to total units produced. OEE sounds simple, but it causes problems for production and process improvement managers for several reasons: (1) it is hard to get input values correct and (2) it is often used in a vacuum. OEE is particularly bad for identifying and altering bottlenecks.
MOSIMTEC simulation & modeling can test OEE. Based on project experience, we find that looking at a single OEE value can’t be used to determine productivity of a system. It hides important information about performance causes. Cause and effect of changes in OEE components also need to be considered. OEE calculations are not independent – upstream work centers impact downstream work centers, and vice versa. If you’re moving your system to smart factory, digital transformation, or Industry 4.0, you need to understand how data you collect impacts your KPI’s, such as OEE.
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