Is a higher OEE rate better?

In order to manage short lead times of order fulfillment, meet cost targets, handle the pressure on budgets, and the demands to quality, the right priorities must be set. But where to start and what to do? This blog series is about the fundamentals of OEE. We will answer the 10 most important questions around the subject of OEE and give an insight into the possibilities it offers.

10 things everybody should know about OEE
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Question number 7:

7. Is a higher OEE percentage better?

To answer the question if a higher OEE rate is better or not, it must first be decided what the core goals are. For example:

Must the equipment be more reliable?
Must de quality be more consistent?
Is it necessary to produce smaller batches to supply the customer faster?
Must the equipment be faster continuously or on the contrary: run a bit slower yet more stable, resulting in a higher output?

Depending on the answers to these questions, the OEE percentage can help to determine which improvements are required.

It is okay to start with a low OEE rate. That means there is plenty of room for improvement and every percent the OEE score increases, generates considerably more output

OEE rate and output

The OEE number indicates the percentage of good products compared to the theoretical maximum. Faster machines are not always better. The OEE number is a combination of availability, performance, and quality rate.

A higher OEE rate is not always better

We go over some examples of situations when a higher OEE percentage is not better

When the speed goes up but at the same time more scrap is produced. The process is now unstable because there are clear quality problems and the costs of scrap products are high.
When stock increases. If more products are produced than are sold, money is lost because there is more stock that needs to be stored.
When it is decided to increase the OEE rate by using more resources (people, power, materials). This can have a negative effect on the cost-benefit ratio.
It sometimes happens that a production team does everything in its power to increase the OEE percentage. However, this often disrupts the process. It is crucial that the machine can operate in a stable manner. Only then speed can be increased.