OEE or Overall Equipment Effectiveness to give it its full title is a tool within the TPM (Total Productive Maintenance) method.  Development of TPM is attributed to Seiichi Nakajima of the Japan Institute of Plant Maintenance (JIPM) in Japan in the 1960’s and 1970’s. The origins of TPM in turn came from America and were adopted by Japan after World War 2.

Nippondenso, part of the Toyota group, a manufacturer of automotive electrical components is cited as the first company to adopt a plant wide maintenance program. Seiichi Nakajima formalised the concepts of the TPM program and was instrumental in its widespread use across Japanese manufacturing plants.

The TPM program began to be used in the West in the 1980’s when it was translated and published in books and articles both by Nakajima and others.

The purpose of TPM is to increase equipment effectiveness so that the operational efficiency of machines or equipment can be maximised and held at the highest level possible. The formula combines the factors of machine availability, performance and product quality and is expressed as a percentage.

Overall Equipment Efficiency Formula

A = Machine Availability.  Availability of the machine is the amount of time it is actually available for production out of the time it should be available.

A = ( MTBF – MTTR ) / MTBF

MTBF – Mean Time Between Failures = ( Total Running Time ) / Number of Failures.
MTTR – Mean Time to Repair.

P = Performance Rate = RE X SE.

Rate efficiency (RE) : Actual average cycle time is slower than design cycle time because of jams, etc. Output is reduced because of jams.

Speed efficiency (SE) : Actual cycle time is slower than design cycle time machine output is reduced because it is running at reduced speed.

Q = Quality Rate. The percentage of good parts out of total produced.

Although originally designed to involve shopfloor staff in continuous improvement by manually collecting data and calculating OEE, most companies soon realise that this creates problems in itself.  Certainly most manufacturers targeting “World Class” levels of efficiency will use some form of automated system to provide accurate and timely data.  You can find links for free and commercial software and systems on this sites sidebar.

Useful Article Link – An Introduction to Total Productive Maintenance (TPM)