OEE: A Top Business Metric

PerformOEE Smart Factory Software from OEESystems International looks to extend the overall equipment effectiveness metric beyond its plant floor roots to link CapEx to realistic operational improvements.

Well-known as a formula to determine overall equipment effectiveness (OEE) based on equipment availability, equipment performance, and product quality data, the OEE metric has received a lot of attention on its own and as part of continuous improvement programs. For example, it has been used in Six Sigma programs to help target and prioritize areas for improvement. While its popularity over the years has risen and fallen, it continues to be a highly relied upon metric to identify production problems, particularly in the discrete and batch manufacturing industries.

Some industry professionals see a broader application for OEE based on the value of the insights it can provide. OEEsystems International is one company promoting the use of OEE for its traditional plant floor applications as well as for higher-level applications in finance.

Andrew Rice, vice president of sales in North America for OEEsystemsAndrew Rice, vice president of sales in North America for OEEsystems“Our focus is on continuous improvement and bringing change to organizations,” said Andrew Rice, vice president of sales in North America for OEEsystems, during a meeting at PACK EXPO East 2022. “We treat OEE as a top business metric by delivering data not just to operators, but to the finance department and other executives. OEE is a tool to change organizational behaviors and we help make that culture change by using OEE to deliver one source of the truth about line operations to stop the data debate about what data a company should be using.”

Rice noted that industry’s push toward digital transformation has been a major driver in interest around OEEsystems’ PerformOEE Smart Factory Software and how OEE can be used to transform manufacturing businesses.

For example, financial dashboards and analytics provided by the software allows for linking CapEx to realistic OEE improvement, according to Rice. With PerformOEE, users can “measure the factual base point against improvements and monitor gains on an ongoing basis,” he said. “Pareto charts generated by the software illustrate to the business which costs are associated with all losses. This helps executives understand the value of even a 1% OEE improvement across a machine, line, and process as well as how it can be attributed to the entire business. It also helps users develop more accurate ROI timelines.”

Jim Huysentruyt, project manager at OEEsystems, explained that data used by the PerformOEE software is collected from PLCs via OPC UA. The software “directs operators as to what needs to be fixed—either equipment or operating processes,” he said. “The Pareto charts [in the software] show users what’s happening with downtime, scheduling, breaks, equipment turnarounds, and setup.”

The software runs on a server that can be located on a machine at the edge or in the cloud, said Huysentruyt; and it can interface with SAP or other enterprise system to deliver analysis to executives.


   Access OEE guidelines from PMMI's OpX Operational Reliability Solutions Group.


Huysentruyt added that, once the Perform OEE software is installed, OEESystems trains users on what it calls the “Science of Manufacturing”—a set of principles combining technical innovation with a focus on people and culture to deliver successful continuous improvement programs.

Key functions of PerformOEE include:

  • Automating data logging—including downtime—to remove manual recording of shift information.
  • Allowing for opening and closing preventative and corrective actions as well as reassigning downtime root causes based on insights gained from operations.
  • Enabling collaboration among team members in shift logs to raise corrective and preventative actions. Issues can be escalated within and across shifts.
  • Making data reviewable at shift changeover and for daily production reviews.
  • Providing real time quality information and alerts (such as rejects and alarms).
  • Categorizing data collected by reason and function to feed analytical and trend reports.
  • Tracking and setting alerts based on user-defined quality rules for continuous process control.
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