OEE Glossary of Terms:
One of the three OEE metrics. This is the possible production time after all
downtime losses (machine breakdowns, machine adjustments/setup) are subtracted.
The input count for any part not produced to manufacturing specifications. (bad/reject)
When a manufacturing process produces exactly what the product demand is. Takt time
is the measurement used most often to determine if a manufacturing process is balanced.
A comparison tool used to determine the level of product, process, growth, or other
successes your manufacturing plant is experiencing when compared to similar companies
with similar processes and products. Used to identify a company’s strengths and
weaknesses compared to their competitors and make necessary adjustments.
Repeatable procedures that over time prove to be the most efficient and effective way of
accomplishing a task. Successful companies use to develop a standard of measuring.
The slowest operation or choke point in a manufacturing process or machine.
The maximum amount a machine, system, or process can produce.
Time lost on a machine due to swapping out material, tooling, connections, or equipment.
Switching from producing one product to a new product on a machine. This process may
involve replacing dies or removing unused materials. In Lean Manufacturing terms
changeovers are accomplished through S.M.E.D. (Single Minute Exchange of Die)
programs which strive to accomplish a complete changeover in under ten minutes.
The ongoing process of trying to do things better, faster, and less expensive.
The time to produce one part or one repetition of a particular task on a machine.
Cycle Time Analysis
Tool used to determine cycle times of a machine and a way to understand the events that
affect the Performance metric of OEE.
The period of time the machine is not available for production due to maintenance or
Down Time Loss
Any production time lost due to unplanned shutdowns. One of the three OEE
Loss Categories which reduces the OEE metric, Availability.
Down Time Reason Codes
Available codes to select that explain why a machine is down or not producing parts.
These codes help to attribute the specific source or reason to why the machine is down
and can be monitored and collected to analyze the production process. With down time
reason codes, Root Cause Analysis can be applied to start determining Down Time
Giving employees more authority, accountability, and responsibility to affect their work
place and improve their daily lifestyle. Many of the best manufacturing companies invest
in OEE programs that empower an individual to be more productive.
The steps and procedures you can perform while the machine is still running that
facilitate the S.M.E.D. (Single Minute Exchange of Die) process.
In OEE, an event is a production loss which occurs on a machine that is
Final Machine Run Time
The actual production time of the machine after subtracting all Losses (Downtime, Speed,
Quality). This is what OEE measures – your machine’s real efficiency.
A measurable objective a machine intends to achieve within a specific period of time.
S.M.A.R.T. Goals are Specific, Measurable, Attainable, Relevant, and Timely.
The input count for any part produced to manufacturing specifications. These parts meet
quality standards without any rework. Good count is used to calculate OEE
A Japanese term for “improvement”. A Japanese philosophy that implements the Lean
Manufacturing tools used to effect improvements in the manufacturing process. This
approach is to motivate employees plant wide to become involved in the evolution and
improvement of all functions of the business by eliminating waste.
Key Performance Indicators (KPI’s)
KPI’s refer to a list of measurable parameters that will indicate how well a manufacturing
plant is doing at attaining goals. Availability, Performance, Quality, and OEE are
all KPI’s that a manufacturing plant would like to measure. The Live OEEhas
these plus 25 more KPI’s built into the product for your easy implementation.
A manufacturing system that strives to relentlessly eliminate waste from its operations.
Lean Manufacturing strives to produce products that are on time and use as few resources
as possible. The OEE metric is a key tool in Lean Manufacturing programs.
Lean Manufacturing includes many manufacturing improvement tools such as S.M.E.D,
TPM, 5S, and Kanban. Lean Manufacturing empowers and motivates employees to
engage in activities to better their respective companies.
One of the Major Loss Events. Machine Adjustment/Setups is the time lost on the
machine due to configuring equipment. Setup and machine changeovers contribute to
OEE Downtime Losses and reduce the OEE metric, Availability.
Tracking machine setup time is critical in reducing this Downtime Loss.
One of the Major Loss Events. Machine Breakdowns is the time lost on a machine due to
equipment failure. Machine Breakdowns contribute to OEE Downtime Losses
and reduce the OEE metric, Availability.
Machine Production Bad Parts
One of the Major Loss Events. Manufactured parts which did not meet quality
specifications. These bad parts or rejects were produced during the steady state
production of the machine. Machine Production Bad Parts contribute to Quality Losses
and reduce the OEE metric, Quality.
Machine Reduced Speeds
One of the Major Loss Events. Machine cycle where the process is running but at a
slower than expected rate. Machine Reduced Speeds contribute to OEE Speed
Losses and reduce the OEE metric, Performance.
Machine Startup Bad Parts
One of the Major Loss Events. Bad parts produced while the machine is adjusted for
production. Machine Start Up Bad Parts contribute to Speed Losses and reduce the
OEE metric, Quality.
One of the Major Loss Events. A Machine Stop is a pause in production typically less
than five minutes. It is usually not long enough to be tracked as downtime. Machine
Stops contribute to Speed Losses and reduce the OEE metric, Performance.
The active state of the machine. The machine state can be run, jog, setup, or down.
Major Loss Events
The categories of production losses that are most prevalent in the manufacturing process.
Machine Breakdowns, Machine Adjustments/Setups, Machine Stops, Machine Reduced
Speeds, Machine Startup Bad Parts, and Machine Production Bad Parts make up the
Major Loss Events. The OEE metrics help isolate these six different Major Loss
Events to help you address them each individually and improve your process.
A condition causing a machine to be down from being out of parts or the materials
needed to make that part. The machine cannot continue to produce product until the
material flow has been corrected. A downtime reason code can be associated with this
condition and displayed on the Live OEEfor plant wide notification.
The design capacity of the machine or its manufacturing process.
Overall Equipment Effectiveness (OEE)
The key measurement in Total Productive Maintenance (TPM). OEE is the
essential measurement for determining the efficiency and effectiveness of your process.
By breaking down OEE into the three key metrics Availability, Performance, and
Quality, you can measure and analyze a problem with the machine and provide
improvements to fix the manufacturing process and benchmark your progress.
(Formula) OEE = Availability x Performance x Quality
Availability: Actual production time left after subtracting all planned downtime.
Performance: How well the machine was running when it was running.
Quality: How many good parts versus bad parts the machine has produced.
The three components of OEE: Availability, Performance, and Quality. Focusing
on these three metrics is sometimes more important than the final calculated OEE
The three types of Productivity Losses (Downtime Losses, Speed Losses, and Quality
Losses) associated with the three OEE metrics.
One of the three OEE metrics. Performance is the rate at which a machine
converts available time into product. Performance tells us how well the machine was
running, when it was running. Performance takes into account all the factors (Speed
Losses) that cause the machine to operate at less than the maximum speed.
Planned Machine Run Time
The total run time that the machine is expected to produce parts.
Unproductive time on a machine that is deliberately scheduled. Planned shutdown on a
machine is excluded from the OEE calculation.
Plant Operating Time
The time that a manufacturing plant is open and the machine is capable of operation.
One of the three OEE metrics. Measured in the OEE metric by tracking
rejected parts. Quality takes into account bad parts (Quality Losses) that do not meet
Quality loss is the percentage of pieces that do not meet quality standards. One of the
three OEE Loss Categories which reduces the OEE metric, Quality.
Product produced on the machine that do not meet quality specifications.
A category of rejected parts that can be remanufactured into good parts. The Simple
OEE calculation does not make the distinction between reworked parts and bad parts that
are scrapped and thrown away.
The total amount of production time that a machine has been producing parts.
The period of time that a machine is not performing its intended function due to planned
downtime events. Preventive maintenance and machine production tests are a few of the
more common types of scheduled downtime.
The period of time on a machine required for an operator to perform all the necessary
tasks to produce the first good part.
Live OEE Systems easy way of implementing OEE and calculating the Availability,
Performance, and Quality metrics of your manufacturing process.
Single Minute Exchange of Die (S.M.E.D.)
A Lean Manufacturing tool used to quickly change a machine over from producing a
specific part or product to producing a different part or product. This program is used to
help reduce setup time on the machine. This setup time can be exchanging dies or
mechanical structures, but also include changing material thickness, color, or type.
Any production time lost due to machine running below maximum speed. One of the
three OEE Loss Categories which reduces the OEE metric, Performance.
The production rate of the machine that matches the rate of sales or consumption. Takt
time is a German word meaning measure. In its purest sense, takt time is used to produce
exactly what the customer will consume. Knowing what your takt time is for a specific
product will help you understand the machine’s ideal cycle time (target counter) to meet
your customer’s demand.
The target counter is also referred to as Takt time or calculated target of the machine.
The target counter illustrates to the machine operator the number of parts or cycles that
should be completed at a particular point within the shift, day, or production run. The
target counter is a variable within the Live OEE System that increases its value based on a set time value.
The total number of parts, good and bad, that are produced on a machine. Total Count is
used in calculating the OEE metric, Quality.
Total Productive Maintenance (TPM)
An equipment maintenance system that addresses maintenance issues that cause
equipment downtime before they become major problems with the machine. TPM
includes scheduling maintenance on a regular basis to allow for more proactive and
preventive maintenance on the machine. A solid TPM program plans your machine
downtime and keeps breakdowns to a minimum.
The total accumulated machine time of Run Time + Down Time + Setup Time. Total
Time is used in calculating the OEE metric, Performance.
World Class OEE
A measured OEE percentage of 85% or greater is known as World Class OEE.
Class OEE is the metric to compare current equipment performance to world class
performance. World Class figures of OEE also include Availability of 90%, Performance
of 95%, and Quality of 99.9%.
Studies throughout the world indicate that the average OEE value in manufacturing plants is 60%.