If you have had some exposure to the common thinking on this topic, then you are likely familiar with the terms OEE (Overall Equipment Effectiveness) and MTBF (Mean Time Between Failure). Both metrics can be very informative and drive specific behaviors when applied correctly. When applied incorrectly they can lead to confusion and frustration. In this post, I hope to shed some light on which of these measures may be more meaningful for your organization.
Let’s start with Overall Equipment Effectiveness.
The layman’s version of OEE is simply defined as what percentage of the time that you could run good product at full capacity and with acceptable quality did you do so? In other words, the percentage of manufacturing time that is truly productive.
Perfection at OEE is 100%. Perfection means that you are running as fast as possible during planned production time with no defects. Anything more than that and you are breaking a few of the basic laws of physics, but we will save that discussion for another time.
OEE is a bit of a universal metric and measuring it is a manufacturing best practice. It includes many of the critical aspects of your performance into a single metric. If you include some safety and cost measures, you are approaching a well-formed maintenance scorecard.
Mean Time Between Failure tells us how often, on average (mean), we should expect to see an asset fail to fulfill its function. Higher MTBF performance is always considered to be better, as it indicates that your asset performs its intended function longer without any interruption attributed to failures. Downtime that may exist associated with planned maintenance activities is excluded from this calculation.
Note: MTBF is the reciprocal of the Failure Rate (1/MTBF = Failure Rate).
Assume we measure MTBF monthly (30 days or 720 hours), and we have experienced 10 failures in this time frame.
This means that under current conditions, we should expect to experience a failure (loss of function) every 72 hours.
MTBF is a relative measure. Measuring MTBF on a highly critical asset or group of assets can be very meaningful. Measuring MTBF across an entire department or facility provides less value.
It is also important to note that MTBF does not consider situations where assets are running at a reduced rate, nor does it consider the size and duration of the event (not all equipment failures are equal – some are longer and have a greater impact than others).
My short answer to this question is that if you can measure OEE in a meaningful way, then this is the metric for you. It covers many of the bases. Sadly, OEE does not fit in all situations.
Discrete manufacturing is the production of distinct items. Automobiles, furniture, toys, smartphones, and airplanes are examples of discrete manufacturing products. You can easily identify a single item produced by discrete manufacturing.
If this definition fits, then OEE is for you. You should be concerned about factors such as availability, performance efficiency, and quality rate. These factors are central to your success.
Curious what world-class OEE looks like? Leanproduction.com defines world-class OEE at 85% (see their image below).
Process industries are those that run a continuous batch where the distinction between one unit and another is not easily identified. Power generation, oil production, transport, and refining, as well as many petrochemical processes, fall into this category.
Unfortunately, in these types of environments, OEE might not serve our purposes for the following reasons:
In these situations, establishing MTBF as a meaningful measure on specific highly critical assets and trending your performance upward will likely provide much more value than OEE.
Metrics are a funny thing. When used correctly and with the right application, they can provide a lot of value and focus to an organization. Used incorrectly, they tend to cause more harm than good.
When selecting the best metrics for your team, consider the following advice:
Allied Reliability provides asset performance management across the lifecycle of your production assets to deliver required throughput at lowest operating cost while managing asset risk and achieving environment, social, and governance objectives. We do this by partnering with our clients and applying our proven asset management methodology and leveraging decades of practitioner experience across more verticals than any other provider. Our asset performance management solutions include Consulting & Training, Condition-based Maintenance, Industrial Staffing, Electrical Services, and Machine Reliability.
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