An OEE score of 85% is considered World Class. But actually, that is not always the case. Here’s when.
1. When not all losses are included in the definition of the OEE
It is possible to run any machine at “85%” OEE, simply by adapting the OEE definition. You take out breaks, maintenance, setups, waiting, or calculate OEE with a maximum speed that is lower than theoretically possible.
2. When quality rate is low
As long as quality rate is not extreme high, the process is probably not fully stable. The quality problems are mostly only the tip of the iceberg. The costs of the scrap products are high, even for a ‘cheap’ product such as egg cartons. Your profit margin erodes quickly when you produce more scrap! This can occur at a great OEE of 85%.
3. When OEE fluctuates, process is not in control
If the OEE fluctuates between 30% and 100% OEE, the average might still be 85%. Because the process is not instable, it is not reliable which leads to unnecessary costs.
4. When stock increases
Running large batches usually has a positive effect on the OEE. But this usually is not what the customer demands. Increasing stock causes tons of negative side effects. In this situation 85% OEE can never be called World Class.
5. When high effectiveness is achieved at low efficiency
If the 85% OEE is achieved by investing heavily or by increasing the used resources, the costs go up. From a point of view of improving by loss reduction, this is the wrong way to go.
6. When High effectiveness is achieved without binding the workforce
In theory it is possible to get the equipment to run at 85% OEE without involving the workforce. If this happens, will the workforce have enough understanding of the process to correct abnormal situations? Will they be able to improve the process? The process will not be able to grow, based on workforces’ knowledge.
7. When 85% is achieved, but it is not sustainable
If 85% OEE is achieved by pushing and tricking, it will be highly questionable whether this will be sustainable and stable. Machine crashes, accidents, or sudden loss of capacity or quality will be waiting to occur because there is a situation that is under stress.
A well implemented OEE system should prevent and bring insight in these effects. It requires not just software that was designed based on deep understanding of these effects but also the right configurations of the loss-structures and the right shop floor and management involvement.
The OEE number itself, without its context, is a non-number.
You can read more about the ideal OEE score here.
Author OEE for the Production Team book