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Why is OEE such an important production metric?

Time and cost constraints are forcing an increasing number of businesses to produce high-quality products more efficiently and economically. To accomplish this, their manufacturing processes should generate as little waste as possible. Furthermore, they must minimize throughput times and machine downtimes while keeping warehouse inventories and quality issues to a minimum. Of course, the ultimate goal should be to maximize production profitability.

OEE (Overall Equipment Effectiveness) is a critical metric in the pursuit of more profitable production. It assesses the overall efficiency of a manufacturing operation by combining three critical parameters:

  • Accessibility
  • Performance
  • Quality

The most valuable key performance indicator (KPI) that your company’s production team can use to improve overall performance is OEE. In-depth monitoring and loss analyses used to be time-consuming activities that were typically only performed on a spot check basis. New technologies, on the other hand, make it quick, simple, and efficient to capture, compare, and manage OEE and other production metrics.

OEE metrics reveal hidden sources of resource waste.

The availability OEE factor expresses the ratio between how much of the time a machine could be running and how much of the time it actually is. Every machine typically comes to a halt at some point due to unplanned stops. You’ll be able to draw useful conclusions and take action to improve the situation if you identify the causes of these pauses in as much detail as possible and record their duration.

The OEE performance factor focuses on the number of units that must be produced. Even when a machine is up and running, it can operate at various speeds. This has an impact on the number of parts produced. The machine’s performance is defined as the ratio of how many parts could be produced in a given amount of time to how many actually are.

The importance of avoiding reworked and rejected products is reflected in the OEE factor of quality. It is not only important how many units are produced in absolute terms, but also how many of them can be used as is, that is, without any rework. The ratio of these two values – good products to total products – indicates the quality of production.

Improving shopfloor management to improve production

Integrating OEE into shopfloor management is advantageous. This way, it becomes a permanent part of the shopfloor’s activities. Management is also kept up to date on current events and can make appropriate decisions as needed.

Shopfloor management seeks to improve the performance of all tasks in a manufacturing operation. Managers and employees must collaborate closely where value is created. Managers must also inform and motivate employees, as well as ensure that they have the necessary skills.

The Importance of OEE Metrics

Professional shopfloor management results in long-term improvements and optimal outcomes. Addressing parameters such as transparency, monitoring, metrics, and OEE in real time has the greatest potential for optimizing production.

It’s important to remember that a manufacturing company has many different roles. OEE metrics must be applied differently depending on what they do and how important they are. Each area of responsibility has a unique point of view.

Continuous improvement and lean manufacturing

Data that is objective and trustworthy is the foundation for successfully implementing a process of continuous improvement. The emphasis in lean production is on automatically capturing metrics in real time, accurately identifying opportunities, launching the appropriate measures, and ensuring their effectiveness.

Plant administration

A plant must, by definition, be profitable. It is thus critical to keep production costs low, meet deadlines, remain flexible, and ensure quality. The ultimate goal is to stay competitive. Objective real-time metrics enable plant managers to stay on top of things by responding quickly to critical situations, for example.

Production supervisors

The managers of a manufacturing facility are largely responsible for how and how well it operates. Day after day, production quotas and quality goals must be met “somehow.” Any deviations from targets must be detected quickly so that appropriate corrective action can be taken. All of this necessitates the use of appropriate metrics.


It is critical to detect stops as soon as possible in order to avoid major production shortfalls. Notifications, MTBF, and MTTR are critical maintenance metrics. They enable analysis of the scope and frequency of stops, as well as whether or not the situation is improving.

Work planning, logistics, and purchasing

Transparency in real time is critical for determining whether production is on track. For organizing the supply of inputs and coordinating the dispatch of finished products, up-to-date data is required. They enable a company to reduce costs by adhering to an efficient manufacturing schedule.


High-performance, problem-free production is essential, but quality must also be met in the end. Quality managers monitor the entire value creation process, employing appropriate metrics to detect and address any quality issues.

Auditors oversee the financial aspects of manufacturing. They are in charge of tracking machine operating times, staff-minutes per component, throughput times, various comparisons (including between sites), and much more. With the right KPIs, they can get a bird’s-eye view of how to improve cost-effectiveness.

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