Many articles written on OEE (ours being the exception), indicate or suggest that the quality factor for OEE is calculated as a simple percentage of good parts from the total of all parts produced. While this calculation may work for a single line part number, it certainly doesn’t hold true when attempting to calculate OEE for multiple parts or machines.

OEE is a measure of how effectively the scheduled equipment time is used to produce a quality product. Over the next few days we will introduce a method that will correctly calculate the quality factor that satisfies the true definition of OEE. The examples we have prepared are developed in detail so you will be able to perform the calculations correctly and with confidence.

Every time a part is produced, machine time is consumed. This time is the same for both good and defective parts. To correctly calculate the quality factor requires us to start thinking of parts in terms of time – not quantity.

If the cycle time to produce a part is 60 seconds, then one defective part results in a loss of 60 seconds. If 10 out of 100 parts produced are defective then 600 seconds are lost of the total 6000 seconds required to produce all parts. Stated in terms of the quality factor, 5400 seconds were “earned” to make quality parts of the total 6000 seconds required to produce all parts (5400/6000 = 90%). Earned time is also referred to as Value Added Time.

As we stated earlier, for a single line item or product, the simple yield formula would give us the same result from a percentage perspective (90 good / 100 total = 90%). But what is the affect when the cycle times of a group or family of parts are varied? The yield formula simply doesn’t work.

The quality factor for OEE is only concerned with the time earned through the production of quality parts. Watch for our post over the next few days and we’ll clear up the seemingly overlooked “how to” of calculating the quality factor.

Until Next Time – STAY lean!

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