World-class OEE is a myth, 85% was a number pulled out of the sky. The overall OEE number will be different for every manufacturer and different machines will have different OEEs on the floor.
We talked about OEE being a flawed metric, but let’s take an even deeper dive into the world of OEE, specifically the notion of world-class OEE.
What is Considered World-Class OEE?
World-class OEE of 85% is considered a benchmark, “best practice”. Yet, this “world-class” number was seemingly pulled out of nowhere hence why world-class OEE is a myth. Achieving this number is considered the peak of success, but what happens when that world-class metric is nothing more than an arbitrary number hiding inconsistencies, flaws, and areas for improvement? How world-class OEE is evaluated is misunderstood and can mean very different things.
The “World-Class OEE” term is credited to Seiichi Nakajima, author of “Introduction to TPM: Total Productive Maintenance”. In that book, he explains how to implement TPM and OEE, and since 1984 when the term was coined, manufacturers across the globe have clung to the world-class OEE benchmark as a guiding principle. While, it is good to have guiding metrics, basing your company’s success off one, flawed metric can be detrimental.
World-Class OEE, Unsurprisingly, Falls Short in Determining “World-Class”
There is one fundamental problem with using OEE across your company – whether that be products, machines, lines, or departments – unless all of the conditions are the exact same, the numbers cannot be used for comparison. The odds of every single line producing the same product under the same conditions are extremely small. Different factors contribute to different numbers. So, then why use world-class OEE as a universal benchmark?
Considering that OEE is different for the reason mentioned above, it is also different for each company, industry, and country. For a metric that was established in Japan in the automotive industry, it could have different weights in a plastics manufacturer in Canada.
You’re probably now wondering, yeah, I get what you’re saying, but do you have examples to back it up? Yes, yes we do.
If your performance is 100%, availability is 100%, but the quality of the product produced is 85%, are you considered world-class? What if you are not capacity constrained and don’t have to produce every minute of every day so technically, your plant is down, are you not world-class?
What if you’re running at 85% availability yet never doing never preventive maintenance on the machines to get to that “world-class” metric of 85%, are you considered world-class then?
As you can see, world-class OEE is really problematic. Manufacturers are led to believe 85% is the ultimate goal, regardless of the reason why. It compels companies to further manipulate OEE to reach that holy grail of a metric (think of world-class OEE as the leprechaun of manufacturing – it doesn’t really exist) without really trying to solve problems and improve the process.
We could go on and on with examples but for the sake of time, we’ll end there and assume you get the point that world-class OEE is a myth. The whole idea is that manufacturers need to go beyond OEE and measure the right metrics for their particular goals. Then, set the right targets based on those goals.
How Can a Manufacturer Use OEE Effectively?
Don’t look at OEE as the end number. Look at it as a way to improve individual metrics that contribute to the final result. When you’re focusing on OEE as the end number, you’re only focusing on what is working, and not what can be improved, a potentially costly mistake. While something is working in the present, it doesn’t mean that it can’t be improved to become even better.
And, try not to put too much emphasis on wanting to measure OEE across the plant. Remember, too much data can be just as, or even more overwhelming than collecting no data at all. When in doubt, think about YAGNI – You Aren’t Going to Need It.
OEE is a broad concept. Experts agree that it’s truly a flawed metric at its core. We’ve said this time and time again, without context and understanding, OEE is pointless, but the same argument can be applied to virtually any metric, too.
Context and understanding is the key to success.