Lean Manufacturing and Six Sigma Definitions

Glossary terms, history, people and definitions about Lean and Six Sigma

Overall Equipment Effectiveness

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Abbreviated as OEE. A standard machine performance measurement that encompasses all loss of time on a machine or process that is not contributing to good parts or outputs.

It is equal to the combined effect of Availability x Performance x Quality. OEE can be described by six metrics, called the “Six Big Losses,” which is broken out into each of the three categories.

  • Availability (Uptime): percentage of scheduled time that the operation is available to operate. Often referred to as Uptime.
    • Big Loss #1: Planned downtime
    • Big Loss #2: Breakdowns
  • Performance (Speed): speed at which the Work Center runs as a percentage of its designed speed.
    • Big Loss #3: Minor stops
    • Big Loss #4: Speed loss
  • Quality (Yield): Good units as a percentage of the total units produced. It is also known as first pass yield (FPY).
    • Big Loss #5: Rejects
    • Big Loss #6: Rejects on Startup

As an example, to calculate OEE:

OEE= Availability= 86.6% * Performance=93% * Quality=91.3% = 73.6%

Continuous improvement in OEE is the goal of Total Productive Maintenance (TPM).

A related term is called Total Equipment Effectiveness Performance (TEEP), which is OEE multiplied by a 4th aspect, Loading.

  • Loading: percentage of total calendar time that is actually scheduled for operation.


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