A production target is missed. Orders are waiting. The immediate proposal is to purchase another machine.
Before committing to that investment, ask: How effectively are we using the equipment we already have?
A useful starting point is Overall Equipment Effectiveness, commonly called OEE. It combines three factors: availability, performance and quality. Together, they help distinguish losses caused by stopped equipment, reduced operating speed and defective output.
Three questions to ask
Availability: During the time allocated for production, how much time did the equipment actually run?
Performance: While running, how closely did production approach the equipment’s ideal operating rate?
Quality: How much output met requirements the first time, without needing rework?
The calculation is:
OEE = Availability × Performance × Quality
Use decimal values when multiplying, then express the result as a percentage.
A worked example
Consider this hypothetical shift for one machine producing one product:
| Measurement | Recorded value |
|---|---|
| Planned production time | 420 minutes |
| Stoppage time within that period | 60 minutes |
| Actual run time | 360 minutes |
| Ideal production rate | 10 units per minute |
| Total output | 3,000 units |
| Good output, without rework | 2,850 units |
The calculations are:
- Availability: 360 ÷ 420 = 85.7%
- Performance: 3,000 ÷ (360 × 10) = 83.3%
- Quality: 2,850 ÷ 3,000 = 95.0%
- OEE: (360/420) × (3,000/3,600) × (2,850/3,000) = 67.9%
These are illustrative figures, not results from a surveyed factory.
Although the machine ran for most of its planned production time, speed and quality losses also reduced effective output. The next step is to investigate the reasons behind those losses.
Turn measurement into action
For an initial assessment, I recommend recording the following for one selected machine over five working days:
- Every significant stoppage, its duration and its observed reason.
- The product being manufactured and the applicable ideal cycle time.
- Total units produced, first-pass good units, rejects and units requiring rework.
- Any material shortages, waiting periods or recurring operating difficulties.
Review the records with operators and maintenance staff. Select one recurring loss, investigate its cause, assign an action and compare subsequent performance under similar operating conditions.
Keep the measurement honest
Define planned production time consistently. Record changeovers that occur within that period as stops. Use an appropriate ideal cycle time for each product, and exclude units requiring rework from first-pass good output. Otherwise, the resulting OEE can be misleading.
Use the result to support the investment decision
An OEE assessment does not, by itself, establish whether another machine is needed. My recommendation is to combine it with customer demand, production flow, maintenance requirements and an economic assessment.
Ask what the proposed investment will solve. Will it address a demonstrated capacity shortage? Will it improve quality or reliability? Could a smaller intervention address the measured loss?
Additional machinery may be justified. Clear production records make that decision easier to explain, evaluate and verify.
Measure the loss. Investigate the cause. Check the result.
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