OEE stands for overall equipment effectiveness. As the name suggests, the goal of OEE is to ensure the maximum efficiency of manufacturing equipment while minimizing waste. Minimizing waste in terms of raw materials, time invested, and resources. However, manufacturing plants are often plagued by instances of downtime, machine failure, or producing goods at a reduced speed. These instances of inefficiency are collectively referred to as the six OEE losses.
Inability to counter the six losses in OEE can result in a significant loss of time, money, and effort. According to Deloitte research, unplanned stoppages result in a $50 billion loss for the manufacturing industry every year. Also known as the six losses in lean manufacturing, they are directly linked with the three OEE components of availability, performance, and quality.
The six big OEE losses are an effective and sustainable approach to identifying manufacturing inefficiencies on the shop floor. Manufacturing equipment is the bedrock of your production facility. When the machine underperforms in any of the three OEE components, it hampers efficiency and results in revenue leakage. The six losses in OEE originate from the world of TPM (Total Productive Maintenance) and were developed by Seiichi Nakajima to increase equipment efficiency.
A Senseye report highlights the true cost of machine downtime across sectors. Unavailability, both due to planned or unpredictable circumstances, leads to huge losses in revenue. A single energy company suffered an annual loss of $84 million, while an automotive manufacturer witnessed a revenue drag of around $468 million.
OEE calculation is based on three factors: availability, performance, and quality. These components can be further divided into the six big OEE losses. In lean manufacturing, reducing and eliminating these six losses is a core business goal.
Unplanned stoppages, including equipment breakdowns or failures, lead to downtime. Factories lose 5-20% of productivity due to equipment failure. Digitalizing manufacturing units helps identify failure patterns proactively.
Planned stoppages for cleaning, adjustments, and maintenance result in downtime. OEE alerts via integrated platforms can help track issues early, reducing downtime.
Short duration of reduced outputs due to temporary equipment blockages, power failures, or inefficient management. Data visualization via dashboards highlights the frequency of machine idling or minor stops.
When actual operating pace is slower than the machine's design speed due to wear and tear, poor planning, or mismanagement. OEE intelligence helps manufacturers make real-time adjustments.
Defective products result from incorrect settings, handling errors, or mismanagement. Data automation helps identify defects early, reducing material shortages and improving output quality.
Startup waste occurs until the machine reaches optimal production. Data visualization helps track reject patterns, reducing Total Cost of Operations.
Capturing downtime logs, speed variations, defect counts, and maintenance history allows manufacturers to pinpoint recurring issues and track improvements over time.
Most manufacturers operate at an average OEE of 60%-75%, indicating significant room for improvement.
Many manufacturers use AI-powered analytics, IoT sensors, and machine learning algorithms to detect inefficiencies and provide predictive insights.
AI and IoT provide predictive analytics, real-time performance tracking, and automated alerts to detect inefficiencies and prevent downtime, enabling proactive decision-making.
Conduct Pareto analysis to identify which losses have the greatest impact on production, allowing for targeted improvements.
IoT sensors collect real-time machine data, while AI algorithms analyze trends and predict failures before they happen, minimizing disruptions and enhancing efficiency.
Modern OEE tracking solutions integrate seamlessly with ERP and MES systems, ensuring data flows across departments for holistic decision-making.
Infoveave’s data automation and business intelligence offerings help manufacturers reduce OEE losses. Gain a 360-degree view for holistic equipment monitoring, unlock real-time OEE computation, and stay ahead of inefficiencies with end-to-end automation.
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