Thursday, July 09, 2020
Useful Resources for Brilliant Manufacturing, Operational & Industrial Intelligence Technology Enthusiasts!

Automation, Control & Plant Intelligence - Articles, Analysis, Reviews, Interviews & Views

Overall Equipment Effectiveness: Key to Manufacturing Quality

by Thomas R. Cutler   |   September, 2006 (II)

Manufacturing Insights

Manufacturers with aggressive automation process are facing competitive price pressure, shrinking brand loyalty, and increasing costs. Compliance constraints are impacting business efficiencies while quality expenditures continue to increase. According to Frank Azzolino, President of aPriori Technologies (, “The only option to battle these trends is to reduced fixed costs and lower Cost-of-Goods Sold (COGS.)” One option for implement this type of quality initiative is a cost management platform.

Another option is to track the true overall effectiveness of equipment on the plant floor. The speed of complex machine changeovers is substantial in the profitability of a production run; manufacturing line workers are not encouraged to measure effectiveness and profitability suffers accordingly.

Built-in intelligence goes beyond raw data collection to provide a fully integrated production and quality performance management application. The quality component for manufacturers is the ability to differentiate and compare real-time data against planned estimates. These discrepancies allow automation processes to be quantified.

Overall Equipment Effectiveness

Overall Equipment Effectiveness (OEE) is critical in quality control for manufacturers.

Production machines are designed on the basis of a certain production capacity. In practice, due to various causes actual output lags far behind the capacity of the equipment. If the output of approved product lags far behind the capacity of the installed machinery there is hidden production capacity. Machine performance is always in comparison to an ideal machine – specifically, a machine, which always operates at maximum speed and with a quality rate of 100%. OEE is determined by losses in availability, performance, and quality. The OEE indicates how effectively a machine is being used compared to the ideal machine (OEE = 100%).

In seeking OEE technology solutions there are specific measurable results that should be realized while remain a simple and easily understandable tool for an improvement process:

  • OEE Solutions must quickly identify the problem (the losses become visible).

  • Prioritization of improvement processes becomes clear very quickly.

  • The ability to make well-founded choices for specific improvements is factually based.

  • EE increases are a direct result of the improvements and can be observed immediately.

  • According to Hellen Budaya-Pileski, Communications Manager with Shoplogix, (, "Most manufacturers believe they are operating at ninety percent of efficiency levels according to traditional methods of measurement using operator collected data. When changing to a world class metric of productivity like OEE, manufacturers discover that they are operating at only fifty percent of operating efficiency. Exposing the plant team to the three components of OEE, quality, performance, and availability, they become able to focus on the most critical issues that produce real benefits for the company."

    Plant Floor Operators Gain Benefits from OEE

    OEE for plant floor operators makes OEE concepts accessible to the machine workers - the employees who have the most to gain from tracking and improving the effectiveness of the operating equipment. OEE impact must include a comprehensive education for all employees that ensure participation and success when reducing equipment-related losses.
    Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based TR Cutler, Inc., the largest manufacturing marketing firm worldwide – Cutler is the founder of the Manufacturing Media Consortium of twenty seven hundred journalists and editors writing about trends in manufacturing. Cutler is also the author of the Manufacturers’ Public Relations and Media Guide. Cutler is a frequently published author within the manufacturing sector with more than 300 feature articles authored annually; he can be contacted at

    Popular Articles

    Manufacturing Insights