OEE without sensors: a practical guide for India's SME manufacturers

Overall equipment effectiveness, OEE, was developed by Seiichi Nakajima as part of total productive maintenance in the 1960s. Sixty years on, it is still the clearest single measure of manufacturing efficiency. Most Indian SME manufacturers either do not track it, or track it from shift-end registers that produce a number nobody believes.

What OEE measures

OEE is availability times performance times quality. Each measures a different loss.

• Availability: the share of planned time the machine or line was actually running. Breakdowns, changeovers, material shortages and unplanned stops reduce it.
• Performance: when it was running, how close to its rated speed. Slow running and short stops under five minutes reduce it without showing in downtime.
• Quality: of what was produced, the share that passed first time. Rework and scrap reduce it.

A line at 90 percent availability, 88 percent performance and 98 percent quality has an OEE of 77.6 percent. That sounds high, but it means nearly a quarter of the line's theoretical output is lost. The figure usually quoted is 85 percent. Many Indian SME plants run between 55 and 72, and most do not know their number.

Why 78 percent is good

The 85 percent benchmark is for highly automated, capital-intensive production. For labour-intensive assembly, which describes most of India's SME floor, 78 to 82 percent is good. The trap is treating the number as a target rather than a diagnostic.

The question OEE should answer is not "How high is my OEE?" but "Which component is the biggest loss, and what is causing it?" A line at 65 percent because of breakdowns needs a different fix from a line at 65 percent because of slow running.

Measuring each component without sensors

The objection SME manufacturers raise is that OEE needs sensors on every machine. It does not. All three components can be measured from what operators and supervisors log at the station.

• Availability: operators log downtime with a reason and a duration. Planned time minus logged downtime is availability.
• Performance: operators log counts against the operation. The logged rate against the routing's target rate is performance.
• Quality: scrap and inspection results at the operation give first-pass yield. No separate entry.

That is how FleekERP computes it, per work centre and shift, from the same entries that drive the dashboard. Machine data straight from the equipment is on the roadmap, not required.

The common OEE losses in Indian factories

• Material shortages stopping the line. These appear as availability loss but are planning failures. High availability loss at shift start points to material readiness.
• Changeover time. Thirty to ninety minutes per change, sometimes three or four times a shift. Single-minute exchange of die methods can halve it without capital.
• Short stops under five minutes. Invisible on paper, they can be 8 to 12 percent of performance on an assembly line. A short-stop reason on the phone captures them.
• First-hour lag. The first hour of a shift often runs at 60 to 70 percent of rated performance. If it is not measured, it is not managed.
• Night and weekend quality. The quality component often falls on night shifts. OEE by shift makes it visible without pointing at individuals.

By shift and by line, not for the plant

Plant-level OEE is too blunt to act on. The two useful views are the same line across shifts, which shows supervision and skill differences, and the same shift across lines, which shows equipment and layout differences.

With thirty days of OEE by shift, you will almost certainly find one shift consistently 8 to 12 points ahead. Find out what that shift does differently. It is one of the most reliable improvements available without spending on equipment.

Using OEE to schedule

The practical use of OEE is in planning. If Line A ran at 71 percent this month and Line B at 84, the urgent order goes to Line B. If availability on Line C drops below 70 percent for three days in a row, that is a maintenance review tonight, not a breakdown next week.

The factories that use OEE well do not chase the number. They read it as a symptom. Low availability today, maintenance review tonight. Low performance this shift, supervisor on the floor this afternoon. Low quality at one operation, inspection plan review now.