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    Graham Immerman
    Graham Immerman MachineMetrics / April 02, 2021 OEE / April 02, 2021 OEE Software / April 02, 2021

    OEE Software: Understand How to Track & Improve Productivity

    One of the greatest challenges for manufacturers is knowing what is happening on the shop floor. To solve this, manufacturers use OEE software to collect critical data to provide department heads, supervisors, and operators real-time information about shop-floor activities. This enables them to make faster, more confident production decisions.

    But if the objective of implementing production monitoring software is to understand current performance, measure that performance over time, and then improve on it, one must first define performance. To accomplish this, the most common metric for manufacturers to use is Overall Equipment Effectiveness (OEE).

    While OEE will help you identify potential losses and understand where your process is falling short, it's so much more than just a performance metric; it's the cornerstone of a continuous improvement strategy.

    What is OEE?

    Overall Equipment Effectiveness, or OEE, measures the efficiency of a machine, taking into consideration the availability, performance, and quality output variables during the run of the machine.

    OEE = Availability * Performance * Quality

    For the purposes of calculating OEE, the 3 underlying metrics used are as follows:

    1. Availability

    Availability can also be referred to as Uptime. This is the amount of time the machine is in cycle producing parts compared to the amount of time the machine is scheduled to be in cycle. Any unplanned downtime will result in a lower availability percentage. The main factors that hinder machine availability are:

    → Equipment Failures (Breakdowns)

    → Machine Set-Up and Adjustment Time

    2. Performance

    Performance refers to the speed that parts are produced while the machine is in cycle. It is calculated as the average in-cycle time to produce a part divided by the ideal in-cycle time to produce a part. The more parts produced within a period of time, the higher a machine's performance percentage. Key factors that negatively influence performance include:

    → Machine Idling and Minor Stoppages

    → Reduced Speed of Operation

    3. Quality

    The quality metric is the percentage of good parts out of total parts produced. Any parts rejected during a run will lower the quality percentage of a machine. Some of the primary reasons for quality reduction include:

    → Process Defects

    → Reduced Yield (from startup to stable production)

    With the right information and settings populated in an OEE software, the calculation will be done automatically and populated in pre-built reports that can be used for visibility on the shop floor to track production process or for deeper analysis to spot trends, bottlenecks, etc.


    Benefits of Tracking OEE

    Focus on Problem Areas

    Just as many companies within manufacturing industry environments overestimate their equipment performance, so too can unmeasured, legacy, and ad-hoc production processes create a situation where operators and managers assume that one problem is their most significant concern when the real reason may be hidden.

    Tracking OEE data can help drill down to the real reason behind each problem. This allows issues to be categorized and prioritized, so that process improvement is conducted on the most pressing problems first and progresses in rank order.

    Manage Six Losses

    The concept of Six Big Losses is a standard lean tool that categorizes the type of productivity loss. Generally, these six losses include:

    1. Unplanned stops – Unplanned stops include breakdowns, tool problems, or material interruption upstream in the production line.
    2. Planned stops – Planned stops are recognized stops such as maintenance or end-of-shift stops. Small stops – Small stops can add up quickly. These are short periods for activities such as cleaning or clearing a jam.
    3. Slow cycle time – Not all jobs run at the established ideal cycle time, reducing the efficiency of produced versus expected production.

    Production Rejects

    Quality rejects result from many factors, including incorrect material, training, or wear and tear.

    Startup Rejects

    In many production companies, it takes longer than it should for a machine to go “on-spec,” resulting in wasted material at startup.

    By tracking OEE, all these stops can be managed to improve processes and reduce them to the least amount of time possible. In many cases, some of the significant losses can be eliminated. By tracking OEE correctly and accurately, managers can optimize production to reduce losses.

    Reduced Equipment Costs

    When OEE is properly deployed as a metric, it can reduce equipment costs. Accurate tracking of data can help identify tool wear, out-of-spec parts due to a belt or gear wear, training issues, design problems, and other variables. Managers can use this information to develop an optimized strategy for maintenance, significantly lowering the cost of spare parts and lost tooling.

    Better ROI

    Capital equipment purchases constitute a significant investment for any production company. With OEE tracking, equipment performance is optimized. This reduces the time required to pay for the investment. This increased production also has the effect of unlocking hidden capacity, also referred to as the “hidden factory.”

    With effective OEE tracking, companies may increase equipment uptime to the point that it impacts their entire CAPEX strategy, reducing the amount of equipment that must be purchased to increase production. Not only does this affect the bottom line, but it also means that CAPEX can be spent strategically on other value-added investments or returned to the company in the form of improved cash flow.

    Improved Quality

    Of course, all these benefits cumulatively add to the improvement of production quality. OEE allows companies to optimize production processes by tackling downtime and performance at all runtime phases, including startup, maintenance, shortstops, wear-and-tear, and more. This lowers the occurrence of off-quality material, reducing the cost of lost quality and increasing production.

    Better Visualization

    When OEE metrics are used to capture, categorize, and act upon problems, a clearer picture of the whole factory floor is possible. This holistic approach can be applied at the shift, operator, or machine group level to “see” what is going on that is impacting OEE. Operators can use this visualization to adjust and further improve their performance or that of the machine. Near real-time targets can be set that match the reality on the floor, and changes can be made proactively.

    oee-software-dashboard-reportAn OEE Report from MachineMetrics.

    What is a Good OEE score?

    • An OEE score of 100% is perfect production; this requires only manufacturing good parts, as fast as possible, with no unplanned downtime
    • An OEE score of 85% is considered world class for manufacturers. For many companies, it is a legitimate and reasonable long-term goal.
    • An OEE score of 60% is fairly typical for manufacturers, but indicates there is room for improvement.
    • An OEE score of 40% is common for manufacturing companies that are just starting to monitor and improve their manufacturing performance. In most cases, OEE can be easily improved just by monitoring your machines and learning where the inefficiencies lie within the manufacturing process.

    Manufacturers typically work quickly to identify and solve problems but fail to take the time to understand their root causes. Knowing how to calculate and optimize your OEE can provide answers to both the big picture problem and the details surrounding the problem, and good OEE software helps accomplish this.

    The first and most important step to improving OEE is the integration of a machine monitoring system into your shop floor that can automatically collect operational data from both machines and operators. This will provide the production visibility necessary to boost OEE.

    MachineMetrics' OEE solution enables manufacturers to not only determine their current OEE but to use it to identify potential problems and understand where processes are falling short. Is it performance, quality, or availability? Does the problem lie with a certain machine, job, shift, or process?

    OEE is much more than just a performance metric; it is the cornerstone of a continuous improvement strategy. Visionary leaders can utilize OEE software to proactively identify issues and promote accountability on the shop floor. Understanding and utilizing OEE can help align the goals of management with real-time plant floor operations. This alignment will encourage all employees to be more proactive, and through this collaborative process, productivity and revenue will increase.

    What is OEE Software?

    OEE software allows companies to utilize automation and analytics to measure OEE. The software is real-time, web-based, and managed in the cloud. It provides a modular, flexible software solution for discrete manufacturing companies that are on a journey to create a smart factory that fully and accurately tracks their OEE for their production process.

    OEE Reporting Software from MachineMetrics.

    MachineMetrics uses real-time production data straight from the machine control to propogate OEE reports.

    What Does OEE Software Do?

    By connecting directly to the machine through OEM-embedded capability or by allowing connection over analog or Ethernet connection using devices and sensors located on the edge, real-time OEE software measures variables that involve performance, availability, and quality. It does this through data collection that is sent directly to the analytics engine.

    This data collection is then cleansed and standardized by the software. It is then put through complex machine learning algorithms and advanced analytics platforms to deliver relevant, actionable data for managers and operators to use.

    How OEE Software Can Help in Your Manufacturing Operations

    The benefits of OEE tracking are the same when using OEE software. However, the effect is exponentially improved. Manual recording of data can be highly inaccurate, throwing off the overall accuracy of the system. And insights and analytics outside of a software platform are fraught with missed signals and user bias.

    OEE software helps manufacturing operations by delivering visualization, insight, reporting, and prescribed actions in real-time. These actions are focused on problem areas and are more accurate and detailed than humans could perform independently. This unbiased, laser-focused analysis and problem detection frees up managers and empowers operators to help create optimized preventive maintenance programs, improve production quality, implement continuous improvement, and more, all with the use of real-time data.


    With tablets placed at each machine, operators can add key context to machine data. In the example above, an operator is prompted to log the reason for a downtime event.

    When Should You Invest in OEE Software?

    If you’re hearing a lot about real-time OEE software these days, there’s a reason for it.

    Manufacturers across many different industries - from small shops to fortune 500 companies - are quickly discovering better methods for tracking OEE (Overall Equipment Effectiveness) and identifying automated machine tool monitoring software for tracking the productivity on their shop floors for their entire production process.

    How about you? Are there any warning signs in your business that suggest it may be time to integrate real-time OEE software into your operations?

    5 Reasons to Implement an OEE Software Solution:

    1. Your Customers are asking for OEE Tracking

    If they haven’t already, it’s only a matter of time before your customers start inquiring about how you track your overall equipment effectiveness. More and more, it’s showing up on project bidding lists as a “must have.” No longer content to get “in the ballpark” reports, potential customers want reliable data that a respected OEE software solution provides. Savvy customers know that the more a modern manufacturer embraces new smart manufacturing and IIoT technologies, the more likely their jobs are to be finished on time. Which brings us to our next indicator...

    2. Your Jobs Aren't Being Delivered on Time

    When jobs are consistently going out the door late, it’s time to zero in and figure out why. No business wants to say goodbye to a customer - especially when it could have been prevented.  Real-time OEE software lets you easily track vast amounts of data from your shop floor that you can use to identify hard-to-spot bottlenecks so you can get things back on track.

    3. You Think Your Uptime is Fantastic

    You’ve probably heard the lean manufacturing mantra, “You can’t manage what you don’t measure.” The same philosophy applies when you make an educated guess about productivity on your shop floor. The whiteboard may suggest one thing, but real-time machine monitoring and manufacturing OEE software often reveals a truer picture of what your uptime actually is. When jobs and schedules are actually held up against expected cycle times, the results can be eye-opening.

    Real-Time OEE Report.

    Real-time machine data is highly accurate and does not lie. It is not subject to the bias and inaccuracies of manually tracking your production, leading to decisions that are based on fact.

    4. You Want to Improve Company Culture

    Improving company culture starts with communication strategies and tools that recognize and reinforce the most important outcomes your employees create for your business. A real-time OEE system gives you an opportunity to transform your shop floor into a laboratory that generates accurate data that you can use to create clear targets for tracking individual and team performance. Not only does it put accountability into their hands in a fair and practical way, it sends a message you are interested in a successful, long-term relationship.  

    5. You're Losing Money

    Ouch. When your business is leaking money, it’s important to figure out why - and fast. Often, the source of the problem can be traced to inefficient manufacturing processes. The challenge? Finding them. That’s where real-time OEE software can play a key role. The main culprit that machine monitoring can help you attack is unplanned downtime. OEE software gives you access to accurate information that allows you to view your entire manufacturing process and spot potential profit killers.

    Benefits and Potential Issues

    To understand how OEE software addresses many of the issues associated with manually tracking production data and key metrics, we can examine some brief examples:

    Problem Areas

    One example may be identifying the top causes of downtime. Tracking OEE without software can deliver improvement. But there is a chance that the lack of data quality may lead to a manufacturer addressing the third leading cause of downtime, rather than the most egregious downtime reason. With OEE software, you can ensure that the number one cause is easily identifiable. This shortens time to improvement and delivers greater value, as you can quickly move on to the next opportunity.

    MachineMetrics Downtime Pareto Report.

    The MachineMetrics Downtime Pareto chart identifies the top reasons for downtime, helping you to prioritize the areas for improvement.

    Six Big Losses

    Because OEE software relies on sensors and edge devices, categorizing the type of loss is both more accurate and highly actionable. For example, with MachineMetrics captures real-time data is captured at the edge and can be used to enable workflows based on certain thresholds, alarms, parameters, or manual triggers to enable communication and process optimization. This helps ensure that maintenance, quality, tooling, and other issues are resolved as fast as possible, or even prevented altogether, ensuring as little downtime as possible.

    Equipment Cost and ROI

    OEE software is real-time and cloud-based. Coupled with advanced analytics, this means that costs are lower with increased uptime, and capacity is optimized. For example, if a company is able to optimize its equipment utilization by closely monitoring OEE and acting on opportunity areas, it may prevent expensive capital expenditures associated with purchasing new equipment in order to hit a given production goal.

    Next Steps in Your OEE Software Search

    Can your company identify with any of these production red flags? Are you having difficulty getting visibility and control of the shop floor? Is your data inaccurate, delayed, or non-existent? If so, MachineMetrics can help.

    MachineMetrics can deliver a solution using real-time OEE software that will give your organization the most accurate production visibility in real-time, creating a smart factory environment to optimize OEE. To learn more about our OEE solution, book a demo today.

    Optimize Your OEE Today


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