Overall Equipment Effectiveness (OEE)

How Can Lean Principles Help Improve Overall Equipment Effectiveness?


Overall equipment effectiveness (OEE) is a commonly applied productivity metric in lean manufacturing. It measures:

  • Production quality
  • Manufacturing speed
  • Equipment availability

A company that achieves 100% OEE in lean manufacturing only created products that met specifications and did it as efficiently as possible with no equipment stoppages during planned production time frames.

Raising a company’s OEE percentage may seem like a daunting goal. Fortunately, numerous lean principles can make it easier. Here are some practical ways to apply the lean methodology to improve overall equipment effectiveness.

Improving Assembly Line Visibility With Andon Systems

Andon lights or boards give factory floor managers real-time feedback on assembly line statuses, helping them resolve issues faster. An andon system can improve overall equipment effectiveness (OEE) by accelerating awareness and enhancing visibility.

Sammy Obara is a senior partner at Honsha Associates and former manager of a Toyota assembly plant in Brazil. He advised, “Products must always flow from raw materials to finished goods without interruption and without going backward. It must always be moving forward, always gaining value.” He continued. “The rate of production must match the rate of customer demand. People or machines should not be overwhelmed.”

Andon lights can help people act more quickly to fix things that interfere with OEE by causing the assembly line to stop or slow down. Obara also suggested using andon lights to encourage factory leaders to check key metrics more often.

He clarified, “Scrap rate and first-pass yield are great metrics, but many manufacturers only look at them at the end of the week, the end of the month or even the end of a quarter. Ideally, you should have andon boards that display these metrics in real-time.”

Focusing on Continual Improvement With Metrics

Prioritizing OEE in lean manufacturing is not something company leaders should do haphazardly. Adrian Pask is the vice president of business development at Vorne, a company that helps businesses measure and improve OEE. He explained that people who prioritize OEE for lean manufacturing will get the best results if they think strategically about implementing it. Pask explained, “Like any tool, OEE needs to be applied correctly to the right task to create the outcome that you want.”

He particularly likes to use OEE to identify lost production causes. After all, knowing about those shortcomings is the first step to fixing them. He continued, “I always recommend that manufacturers think of OEE as ‘another’ tool in their productivity toolbox, a tool with the specific intent of identifying lost production time.” Pask warned, however, that some company leaders can fall into the trap of trying to compare the OEE scores for multiple processes against each other.

He noted, “I absolutely understand the desire to compare the scores for ‘how our processes are performing,’ and on an enterprise dashboard, OEE does provide a sense for how multiple processes are running. However, we need to understand that comparing or aggregating OEE like this can lead you to misleading conclusions. We advise that people only compare OEE scores for one process over time to see how the productivity of that process has changed over time.”

After getting the Overall equipment effectiveness (OEE) details, production leaders can start narrowing down the aspects of equipment performance and how to enhance it. Some of the areas for improvement might seem relatively minor, but they could pay off in measurable ways.

Perhaps your company works with bulk materials that frequently stick to the walls of industrial bins or hoppers. If so, an industrial vibrator could improve product flow and boost efficiency. However, whether the material is wet or dry determines if a pneumatic or electric model is the best option for keeping it moving while preventing blockages and buildup. That’s one example of how thinking carefully about how and when to add something to a process can result in multiple benefits.

Data-Driven Overall Equipment Effectiveness Mindset

Improving OEE in lean manufacturing can also mean changing processes so decision-makers are more likely to rely on hard data when handling situations. Matthew Giordano is the partner manager of IS solutions at Rockwell Automation. He advocates relying on digital data and moving away from processes that traditionally required using clipboards and paperwork.

“It is really about driving an information mindset across the board,” Giordano noted. He explained that shifting to digitally collected data reduces the errors that often happen when capturing information manually. Smart sensors can also pick up on valuable information humans may miss. They might detect symptoms of an impending equipment failure days before people notice anything amiss. That’s vital since eliminating waste, including wasted time from broken machinery, is part of lean manufacturing.

Giordano also clarified that, in addition to helping factory leaders identify problems and areas for improvement, data could enable them to verify how well process changes are working. People often discuss those aspects when determining what they believe to be true or how they feel about a process adjustment. With an information-gathering plan, they can refer to hard facts to see if they back up their assumptions.

How Will You Target OEE in Lean Manufacturing?

These examples should show how you could focus on lean manufacturing principles in your efforts to raise OEE in your factory. Besides considering these options, remember that improving overall equipment effectiveness is a team effort that happens at all levels of a facility. People who take ownership of their actions and know how they relate to OEE will realize the parts they play in positive changes.

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