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Author's profile photo John Harrison

Overall Equipment Effectiveness – Does it matter? Can you calculate it?

One of the major drivers in the chemical industry is operational excellence.   While there are many tools that support Operational Excellence (e.g. Six Sigma, Lean Manufacturing, etc.) one that is commonly used is Overall Equipment Effectiveness (OEE). OEE is used to evaluate how effectively a manufacturing operation is utilized.  OEE breaks the performance of manufacturing operations into three separate components:  Availability, Performance, and Quality. Each component points to an aspect of the process that can be targeted for improvement. OEE can be applied to any Work Center, or rolled up to Department or Plant levels.

By analyzing OEE, improvements can be identified and made by:

  • Reducing planned downtime due to meetings, breaks, material shortages, maintenance (Utilization)
  • Eliminating breakdowns and unplanned downtime through root cause analysis (Availability)
  • Tracking and reducing changeover, set up time and adjustments (Availability)
  • Reducing minor stops for mis-feeds, blocks, jams that do not require maintenance (Performance)
  • Reducing speed loss and anything that prevents running at maximum speed (Performance)
  • Reducing scrap and rework due to start up (Quality)
  • Reducing scrap and rework during steady state production (Quality)


SAP OEE Management (by allowing for both an enterprise and plant level architecture) provides the performance analysis needed for these corrective actions.

  • By capture qualitative reasons and context with the calculated performance metrics to drive insight into additional improvements.
  • Using OEE performance metrics to build competency, drive accountability and empower employees to correct issues and make improvements.
  • And by facilitating corrective action collaboration and the full circle of continuous improvement activities.


These improvements all lead to a lower cost of manufacturing: improved product quality, higher resource utilization, decreased asset downtime, and minimized performance loss.

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