January 13, 2022 

The Importance of Overall Equipment Effectiveness (OEE) in Coding & Marking

Learn about the importance of Overall Equipment Effectiveness (OEE), how it’s calculated, and how it can be used to improve coding and marking processes.

Production metrics, such as production volume, downtime, and operating costs, are essential to modern manufacturing and can be used to identify faults and maximize operational performance. Today, one of the most utilized production metrics is OEE, or Overall Equipment Effectiveness. 

First formulated by Japanese manufacturing consultant Seiichi Nakajima in the late 1960s, OEE measures manufacturing effectiveness and efficiency. Since its invention, OEE has been used by many different industries to gain insight into the efficiency of daily operations and how they can be improved.

In this article, we detail the importance of Overall Equipment Effectiveness, how it’s calculated, and how it can be used to improve coding and marking processes. 

What is Overall Equipment Effectiveness and How is it Measured?

The popularity of OEE stems from its ability to help manufacturers and packaging companies quantify their line/equipment performances. By recording OEE, companies can obtain data that shows operational efficiency and where certain weak spots can be improved. However, before looking at ways to utilize OEE, it’s important to understand how to calculate it. 

To calculate OEE, the following three metrics need to be recorded:

  1. Availability: This metric accounts for all times that production unexpectedly ceases for an extended period (i.e. periods of downtime that extend beyond a few minutes). Availability is calculated by dividing Actual Run Time by Planned Production Time (i.e. total shift length minus any time for breaks). In Mathematical Terms: Actual Run Time / Planned Production Time = Availability.
  2. Performance: This metric accounts for when production processes operate at speeds below the maximum possible speed (e.g. when production cycles are running slower than they should or there are periodic stoppages in production). Performance is calculated by multiplying Ideal Cycle Time by Total Count (i.e. the total number of parts produced), then dividing that number by Run Time. In Mathematical Terms: (Ideal Cycle Time × Total Count) / Run Time = Performance
  3. Quality: This metric accounts for all manufactured parts that do not comply with quality standards (aka non-conforming parts, or NCPs). Quality is calculated by dividing the number of Conforming Parts by the Total Count of Parts Produced (including NCPs). In Mathematical Terms: Conforming Parts / Total Count of Parts Produced = Quality

With these metrics, OEE can be calculated using this simple formula: 

  • Availability x Performance x Quality = OEE

Below, we take a look at how these metrics can be applied to help companies view their operational productivity.

The Importance of Overall Equipment Effectiveness and How It Can Be Applied to Coding and Marking Processes

OEE scores illustrate how effective a company’s manufacturing/packaging processes currently are. The initial score serves as the baseline. By periodically recording OEE (e.g. every week), companies can see how stable their performances are and whether or not any attempts to improve operations are effective. Further, by recording the individual metrics used to calculate OEE (i.e. Availability, Performance, and Quality), the company can view the underlying causes of its overall performance issues. 

The following chart shows how these metrics can be scaled weekly and illustrates the importance of Overall Equipment Effectiveness.

OEE MetricWeek 1Week 2Week 3Week 4

In this hypothetical scenario, we can see how the example company varies in productivity from week to week, with a particular low spot occurring in Week 4. While the Total OEE score provides a quick glimpse into this productivity decline, the individual metrics reveal the biggest factors that contributed to the decline: reduced run time (i.e. Availability) and lower product quality. 

In a coding/marking context, OEE can be used to see how well a company’s machines work and how efficiently workers use them. For example:

  • A loss in Availability can point towards chronic hardware failures, excessive machine setup times, or poor planning.
  • A loss in Performance shows that your line may be running, but not at top speed. This can point towards the presence of periodic small stops in line movement or reduced line speed overall from printers unable to print the desired message at the speed of the line.
  • A loss in Quality can point towards mechanical problems with your coding hardware, such as poor print quality or a flawed vision system. The codes may be partial or blurry as seen with a vision system.

While these are important notes, Overall Equipment Effectiveness can be influenced by a large number of factors. If you are interested in maintaining OEE metrics for yourself, we recommend consulting with an expert to find the software and best practices necessary to make the most of your efforts.

Want to learn more about the importance of Overall Equipment Effectiveness and other essential manufacturing metrics? Stay connected with C&M Digest by subscribing to our newsletter. With information on hardware, formulas, and other important marking topics, our newsletter will keep you updated on the latest industry developments. To get in touch with us about possible collaborations or ideas for coverage, contact us today.

C&M Digest Team

The C&M Digest Team is composed of experts from across the coding and marking world. Comprised of ink developers, hardware veterans, and engineers, our News Team delivers informed coverage that is always free from brand bias.

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