OEE Glossary of Terms

TermDefinitionImplication
Actual Cycle Time The actual time to produce one piece. In OEE, calculated as Operating Time divided by Total Pieces. Used in calculating OEE Performance. A variation of the calculation uses Actual Run Rate instead.
Actual Run Rate The actual rate of production, when it is running. In OEE, calculated as Total Pieces divided by Operating Time. Used in calculating OEE Performance. A variation of the calculation uses Actual Cycle Time instead.
Adjustment Time Productive time lost while tweaking equipment. See Setup and Adjustments. Can be a significant loss factor, and in many factories is not directly measured.
Andon Indicator above production line to signal production conditions. Often uses green/yellow/red colors to indicate status.
Availability One of the three OEE Factors. Takes into account Down Time Loss (events that stop planned production for an appreciable amount of time). Must be measured in an OEE program, usually by recording the duration of Down Time Events.
Best Practice Methods that are considered “state of the art” by the most respected in an industry. Successful companies use different methods than unsuccessful companies.
Breakdowns Lost time due to equipment failure. One of the Six Big Losses. Contributes to OEE Down Time Loss (reduces OEE Availability).
Changeover Time Lost time due to swapping of equipment, connections or materials. See Setup and Adjustments. A prime candidate for improvement for most companies.
Cycle Time The time to produce one piece. Inverse of Run Rate.
Cycle Time Analysis Tool used to better understand issues that affect Performance. Important to automate logging of Cycle Times for later analysis.
Design Cycle Time See Ideal Cycle Time. See Ideal Cycle Time.
Down Time Loss Production time lost to unplanned shutdowns. One of the three OEE Losses (reduces OEE Availability). Major focus area for improvement.
Event In OEE, a production loss which must be categorized. OEE’s purpose is to clarify the nature and effect of Events.
Fully Productive Time Actual productive time after ALL losses are subtracted. What OEE measures - the true bottom line of your facility’s efficiency.
Good Pieces Produced pieces that meet quality standards (without rework). Used in calculating OEE Quality.
Ideal Cycle Time Theoretical minimum time to produce one piece. The inverse of Ideal Run Rate. Used in calculating OEE Performance. A variation of the calculation uses Ideal Run Rate instead.
Ideal Run Rate Theoretical maximum production rate. The inverse of Ideal Cycle Time. Used in calculating OEE Performance. A variation of the calculation uses Ideal Cycle Time instead.
Lean Manufacturing Quality philosophy that strives to minimize consumption of resources that add no value to the finished product. OEE can be a key tool and metric in Lean Manufacturing programs.
Nameplate Capacity The design capacity of a machine or process. Used to determine Ideal Cycle Time or Ideal Run Rate.
Net Operating Time True productive time before product quality losses are subtracted. Equipment time losses normally are much larger than defect losses.
OEE (Overall Equipment Effectiveness) Framework for measuring the efficiency and effectiveness of a process, by breaking it down into three constituent components (the OEE Factors). OEE helps you see and measure a problem so you can fix it, and provides a standardized method of benchmarking progress.
OEE Factors The three constituent elements of OEE (Availability, Performance, and Quality). Often it is more important to focus on the three OEE Factors than the consolidated OEE metric.
OEE Losses The three types of productivity loss associated with the three OEE Factors (Down Time Loss, Speed Loss, and Quality Loss). The goal is to relentlessly work towards eliminating OEE Losses.
Operating time Productive time available after Down Time Losses are subtracted. Operating Time increases as Down Time Losses are reduced.
Performance One of the three OEE Factors. Takes into account Speed Loss (factors that cause the process to operate at less than the maximum possible speed, when running). Must be measured in an OEE program, usually by comparing Actual Cycle Time (or Actual Run Rate) to Ideal Cycle Time (or Ideal Run Rate).
Planned Production Time Total time that equipment is expected to produce. Benchmark that OEE is measured against.
Planned Shut Down Deliberate unproductive time. Excluded from OEE calculations.
Plant OEE Consolidated OEE calculation as applied to entire plant. There are different methods of calculating Plant OEE. Pick the one that makes sense for your company.
Plant Operating Time The time the factory is open and capable of equipment operation. Planned Shut Down is subtracted from Plant Operating Time to reach the OEE start point - Planned Production Time.
Process A sequence of activities that starts with some type of input (e.g. raw materials) and ends with some type of output (e.g. a product). OEE can be used across a wide range of different processes, although it is most often associated with discrete manufacturing.
Production Rejects Rejects produced during steady-state production. One of the Six Big Losses. Contributes to OEE Quality Loss (reduces OEE Quality).
Quality One of the three OEE Factors. Takes into account Quality Loss (parts which do not meet quality requirements). Must be measured in an OEE program, usually by tracking Reject Pieces.
Quality Loss Percentage of pieces which do not meet quality requirements. One of the three OEE Losses (reduces OEE Quality). OEE views defects in terms of lost time.
Reason Code An identification number or classification applied to an Event subcategory. Used to tabulate statistics regarding Events. Makes it much easier to get a handle on losses, especially Down Time.
Reduced Speed Cycle where the process is truly running (as opposed to a Small Stop), but is slower than “expected”. One of the Six Big Losses. Contributes to OEE Speed Loss (reduces OEE Performance).
Reduced Speed Threshold A dividing point between a standard cycle, and one which is considered “slow” (a Reduced Speed cycle). Setting a Reduced Speed Threshold can be used in Cycle Time Analysis to automatically identify Reduced Speed cycles.
Reject Pieces Produced pieces that do not meet quality standards. Used in calculating OEE quality.
Rework Pieces A subset of Reject Pieces, that can be reworked into Good Pieces. OEE does not make a distinction between pieces that can be reworked and pieces that are scrapped.
Root Cause Analysis A method of resolving a non-conformance, by tracing back from the end failure to its original (root) cause. The basic tool for understanding and eliminating the sources of productivity losses.
Run Rate The production rate when actually producing (running). Inverse of Cycle Time.
SMED (Single Minute Exchange of Dies) Program for reducing setup time. Named after the goal of reducing setup times to under ten minutes (representing time with one digit). Often a part of programs to improve OEE Availability.
Setup and Adjustments Time lost configuring equipment. One of the Six Big Losses. See also Adjustment Time and Changeover Time. Contributes to OEE Down Time Loss (reduces OEE Availability). Tracking Setup Time is critical to reducing this loss.
Six Big Losses Six categories of productivity losses that are almost universally experienced in manufacturing: Breakdowns, Setup and Adjustments, Small Stops, Reduced Speed, Startup Rejects and Production Rejects. Drill down into the three OEE Factors, and you will reach the Six Big Losses. Measure your process with OEE, and improve your process by addressing the Six Big Losses.
Six Sigma Systematic quality program that strives to limit defects to six standard deviations from the mean. One of the major focuses of Six Sigma is to reduce process variation. In most companies, Quality Loss will be by far the smallest of the OEE Losses. A Six Sigma or equivalent program may be necessary to maintain focus on quality improvements.
Small Stop A brief pause in production, but not long enough to be tracked as Down Time. One of the Six Big Losses. Contributes to OEE Speed Loss (reduces OEE Performance).
Small Stop Threshold A dividing point between a Reduced Speed cycle, and one which is considered a Small Stop. Setting a Small Stop Threshold can be used in Cycle Time Analysis to automatically identify Small Stop cycles.
Speed Loss Production time lost to equipment running below maximum rated speed. One of the three OEE Losses (reduces OEE Performance). Usually the most difficult of the OEE Losses to analyze.
Startup Rejects Rejects produced while equipment is adjusted for production. One of the Six Big Losses. Contributes to OEE Quality Loss (reduces OEE Quality).
Takt Time Production rate needed to meet customer demand. Where sales and business planning meets the factory floor.
Theoretical Cycle Time See Ideal Cycle Time. See Ideal Cycle Time.
Total Pieces Total of all produced pieces. Used in calculating OEE Quality.
TPM (Total Productive Maintenance) Maintenance system covering the life of all equipment: planning, manufacturing, maintenance and improving performance. OEE is a metric for defining equipment effectiveness in a TPM program.
Visual OEE™ Plant floor real-time display of live OEE data for maximum team involvement. Visual OEE™ displays make improvement everyone’s job.
World Class OEE 90% Availability
95% Performance
99.9% Quality
85% OEE
A composite OEE number means very little without the total context.

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