How to Calculate OEE and why you need to

In this video, Walker Reynolds shares why you need to be calculating Overall Equipment Effectiveness OEE for your entire enterprise. It's not optional if you want to stay in business.
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[@EipsteinMaxwell]

White Lisa Davis Sharon Thompson Kimberly

[@justinfeng1393]

NO better than the previous white board. in addition you have to wear dark clothes to highlight what you write, which make me only saw your heads and two arms waving, unnatural and stranges sometimes. As a loyal subscriber who never missed any pieces of your videos Maybe I'm not get used to it now, we all need time to adopt new things.

[@4.0Solutions]

Thank you for your feedback and thanks for being a loyal subscriber Justin! 🙏

[@RF-yh3qh]

Nice video! this way is better. Can you give more examples with raspberry pi? have you used it?

[@4.0Solutions]

Yes we have! We have a demo on this! kzbin.info/www/bejne/qaGoZ3ymhLpgaNk

[@1Bonafide3]

Really like this new visualisation. We don't have to pause and see what`s behind your back when your talking. Very nice!

[@4.0Solutions]

Thank you!

[@muhammadatif1696]

I personally like this newer setup with electronic board and love your contents. Thank you!

[@4.0Solutions]

Glad you enjoy it!

[@iramhernandez6742]

I am learning so much with your videos!! I am currently doing my Master degree in engineering in Mexico, and my proyect is about the Industry 4.0 The videos have helped me a lot to understand simple and complex conceptos Thanks so much i would love to see more complex content, since i am not familiar with some "software engineer concepts", to be able to understand better some topics like: reference arquitectures, SOA, etc. just to name a few Here in Mexico, the north side, has a lot of potencial to deploy industry 4.0, the problem, is that we dont know how to, or the enterprises dont know I am getting interested to become a system integrator, maybe will take me some time, but i will try

[@4.0Solutions]

Thanks so much for sharing Iram. Glad to have you as part of the community.

[@rs8188]

Hello! I have a couple of comments) x. to see you behind a layer of text is not very cool, it would not be bad to allocate a place for yourself. x what happens if you take the camera back and write in larger print? otherwise everything looks very interesting. but still your ability to keep in mind wins)

[@4.0Solutions]

Thanks for the tips!

[@eduardoweingaertner4689]

Hi there! Great video! I have a comment/question related to “Performance Calculation” (go to 07:26). You mentioned that performance is calculated by dividing the actual production by the target (you said that target would be the scheduled time multiplied by the standard rate). Actually, the target should be calculated by multiplying “running time” by standard rate, i.e. you have to take into consideration not only planned but also unplanned downtime. Example: In a shift of 8h, there is 1h planned DT and 2h unplanned DT. Let's say the standard rate is 1 part per minute and the actual production was 280 parts (good and bad parts). If you take running time to calculate performance you would have: 280 / (5h*60) = 93,3%. If instead you consider scheduled time you would get: 280 / (7h*60) = 66,7% (this would be wrong!) Now consider we had 30 bad parts. OEE would be: 250 / 7*60 = 59,5% Quality would be: (250/280) = 89.3% Availability would be: 5h/7h = 71.4% Thus, performance has to be 93,3%. In other words, if you do not consider unplanned DT in the calculation of performance, you would not be analyzing the speed of the equipment (or the cycle-time) but rather a mix of speed and unplanned downtime (in this case, the longer the unplanned DT the lower the Performance, what is not right, since unplanned DT is already considered in the calculation of Availability). In summary: Performance only takes into account production when the equipment/machine is running and not when it is available. Long text, but what do you think? Really nice video! Thanks for sharing this great content.

[@pranithkumar4413]

This electronic concept board is very good sir and your videos are very useful.Thank you

[@4.0Solutions]

Thanks and welcome!

[@muhammadatif1696]

Watched this video thrice. Loved it.

[@4.0Solutions]

We love you

[@RogdagoR]

I'm having some issues about implementing OEE in my company, mostly because we do custom products and our machines are mostly related to testing the products and do visual inspections. The quality, i guess, is always 100% because is not relative to the machine output but to the goods Non Conformity. So those goods who doesn't pass the tests should go into P metric? (for ex: 100pcs expected, 95 passed). My biggest questionmark is about the Availability, because the usage of some machines is dependant by what is planned and we never use them all day long, also we have a different setup time based on how many different goods are planned... so maybe we have only 1 product for today, and tomorrow we have 5... I was thinking to use the planned usage (that can vary day by day, 2 hours today, 5 hours tomorrow, no hours the day after, etc) vs the actual usage. The moltiplication of A-P-Q is still applicable even if I use, as a metric, time for A and pcs for P and Q?

[@ДонПедро-г6ы]

Wating for TEEP session🤓

[@harishs.krishnan7291]

Walker 4.0 - electronic board. Walker 3.0 - traiditional white board. hope it clarifies ;-)

[@4.0Solutions]

Thank you Harish!

[@clarksarge4750]

This brought my understanding of OEE and its importance to manufacturing to a whole new level. Thanks.

[@4.0Solutions]

We're glad to help!

[@ShaneWelcher]

Great explanation

[@4.0Solutions]

Glad it was helpful!

[@pocsgeza1711]

Love the new setup.

[@4.0Solutions]

Thank you Pocs!

[@Srishtigupta34]

can you tell me supplier detail and cost of this transparent board...its really new to me and first time i saw such things...Good one..

[@4.0Solutions]

We made it ourselves. we are switching to vibe.us though

[@YinanSun-ux8op]

Thank you so very much sir! It's really helpful.

[@4.0Solutions]

Thanks for watching! We’re glad we could help.

[@Savannah-v7q]

This is a small thing but when you say that ML would need to see the OEE to give recommendations about improvement, ML algorithms would need to see the AQP numbers to do this, right?

[@4.0Solutions]

Correct - AQP = OEE, but AQP are the actual variables used in pattern matching.

[@Savannah-v7q]

Nice, thank you@@4.0Solutions

[@castillejorivero]

This enviroment is owesome. It is like you are talking to me!!! Keep using it.

[@4.0Solutions]

Thanks Victor!

[@dbk9555]

Thanks very nice & concise explanation

[@4.0Solutions]

Glad it was helpful!

[@fitsumtaye6205]

I like this video, nice background

[@4.0Solutions]

Thank you, Fitsum!

[@deonbarnard6823]

the questions most people suffer with is what piece of equipment to apply the OEE measure too

[@4.0Solutions]

It's simple. Every single machine. Remember step 1 of digital transformation: plug all intelligence into the network.

[@folksnem1855]

I really enjoyed the electronic white board.

[@sherylmccrary9045]

Useful video, thanks! Your new board puts the emphasis on the content over the presenter, which is best for "what you need to know" vids, less so if your goal is "get to know Walker /Intellic".

[@4.0Solutions]

Glad it was helpful!

[@nachumasupatchana]

Thx for make clear concept

[@4.0Solutions]

Glad it helped

[@harishs.krishnan7291]

You're a genius.

[@4.0Solutions]

Thank you!

[@BRAINYBC]

Great content. What should I focus on regarding MES consultant interview?

[@EmileAckbarali]

Now I have learned something else. How to calculate OEE and where it fits into the grand scheme. Really like the new set up. Two thumbs up from me.

[@4.0Solutions]

Thank you Emile!

[@drghory]

The new setup is really better. Awesome. Thanks Walker!

[@4.0Solutions]

No problem!

[@theroamingidiotpresents4683]

I recently heard that you recommend three classes for all your new hires. I'm new to Automation and would love to hear what those are.

[@4.0Solutions]

From what I know. Inductive University and Codecademy Python are two that Walker Recommends.

[@BarbaraMarshall-v6e]

Taylor Edward Moore David Brown Ronald

[@WinstonNkonde]

what teap stand for？

[@4.0Solutions]

TEEP - Total Effective Equipment Performance TEEP measures the overall effectiveness by considering planned and actual operating time, including both scheduled and unscheduled downtime, while OEE focuses solely on planned production time. TEEP comprises three components: Availability, Performance, and Quality, which are also present in OEE. However, Availability in OEE excludes unscheduled downtime. Both metrics are valuable for analyzing equipment performance and identifying areas for improvement.

[@ornelfranck]

Simply AMAZING

[@4.0Solutions]

Glad you liked it!

[@kevinison3740]

Excellent video!

[@4.0Solutions]

💯🙏

[@obireddypenumada8400]

Good usage of Technology for demonstration of OEE

[@ozkanozmehmeh3123]

I have learned, and the screen is very innovative I like it

[@eritch333]

Great setup - love the new visualizations. Feels like more of a conversation not having to see behind your back on what’s written. In a future video, I’d like to see more of your perspective on the MES layer, how Intellic partners/delivers MES solutions under this IIoT approach, possibly using examples from previous client projects.

[@4.0Solutions]

Awesome, thank you!

[@manishprasad6166]

That's a fantastic setup. I vote for the lightboard.

[@ykruzz1]

I disagree with this aggregate calculation method for the Area OEE. This method will only work of the Net Ideal Cycle Time (NICT) used to calculate the (P) Performance factor of all of the lines within the area are exactly the same. If you have one line making 1000 parts per hour and the next one making 50 parts per hour within the same Area, you will get incorrect and skewed results by following the aggregate method. On the other hand, I do agree that Averaging always ignores or diminishes the significance of the lower and higher peak values, but, it gives you a more reliable number; if you are concerned about losing sight of the low performers just show them separate from the average OEE as a list of top offender lines to work on them.

[@4.0Solutions]

I'm pinning this comment in our Discord Server for Walker to respond to! www.iiot.university/discord

[@MrJsysco]

New studio is easier to watch than the previous videos. I liked those as well, I prefer this format better. Do you think you could a podcast? Looking for something to listen to while I am out for a run or ride. Thanks! Would you think about doing a full build of IIOT with AWS and comparing that to a full build out with Azure? I know you had referenced Dell as well. Are they really going to be a force? Thanks!

[@4.0Solutions]

Check out the 4.0 Solutions Podcast!

[@ClauditaRecetas]

I’m taking a supply chain management exam and your videos have really helped me get a more in depth vision of why MES and OEE are useful and can be integrated into companies. Thank you! Really nice way of explaining and structuring the content

[@4.0Solutions]

Great to hear!

[@mubarakhassan5551]

what is possible question can i ask to so as to collect data to calculate oee

[@sunitayadav-oe5qp]

loved it. Please go ahead. You matter

[@richieh007]

Walker - your communication style is reminiscent of Richard Feynman. Watching the video I understand every aspect of your description. You illuminate the screen with energy and knowledge and I am stepping through all your vids, really great contribution. Relating to this video - how else have you seen OEE being calculated?

[@4.0Solutions]

Thank you so much!!!

[@Yash.Patell]

Love your content! But I'm thinking, why can't we build an MES to the SCADA level? For example, Ignition provides the power of reporting, scheduling, and all other features. They have MES modules, but let's say, for XYZ company, it's too expensive. Wouldn't building an MES solution to the SCADA level be sufficient?

[@4.0Solutions]

Not sure we understand your question. Are you asking why MES apps can't be built to also perform machine controls?

[@gihansenanayake2416]

I like the new digital board to old white board

[@thiagogmoraes]

It`s already mentioned here but I would like to add up that this looks very nice because it`s more focused on the information rather than the presenter. On the bad side is that due to the high contrast, it`s a bit harder to follow what you are showing or highlighting with your hands. Once the board gets filled up, it would be nice to have something to put some "light" onto what you are showing. Nonetheless, great video!

[@4.0Solutions]

Thanks for sharing!

[@ryanpatton1795]

Great explanation. Also, super impressed how you wrote backwards. Question - lets say you send out parts to the customer and some get returned for being bad 1 month, or 2 months later. Do you just go back and recalculate that months OEE again?

[@4.0Solutions]

It depends on how meaningful that information is. Does that 1 return make a big impact in your Quality numbers? if so develop a method of retroactively adjusting these counts. Perhaps look at Quality inspection and figure out why they are getting by in the first place.

[@sheldondlima5881]

Hey man... Love your content the format is not important... It's a deep well of data and I'm grateful to you for sharing it with the world...

[@4.0Solutions]

No problem, Sheldon! Thank you for the support!

[@michaelunmann]

Great visual. The new board is definitely easier to follow as a viewer. Q. Using the unit of parts makes sense for a single machine or a single process on many machines. When measuring many machines with varied process times shouldn't P & Q be calculated using time?

[@4.0Solutions]

Time would cancel out for quality. If I understand you correctly Michael you're saying that if one machine takes a minute to produce a part and another takes an hour one bad part equals a minute of loss production on one machine whereas it means an hour on another machine. At the end of the day quality is simply good parts / total parts. So if a machine makes less parts in a day one bad part affects the quality number more, than a machine pumping out thousands. If that makes sense. The numbers are designed so deficiencies only ever affect one of the three categories A P or Q.

[@michaelunmann]

@@4.0Solutions The quality loss of a part that took 1 hour is greater then the quality loss of the part that took 1 minute. Whereas using parts, each part has an equal detriment to Quality.

[@4.0Solutions]

This will be accounted for at the end of the day when the quality score for the 1 part/hour Machine is 23/24 or 95.8% And the 1 part/minute machine would be 1439/1440 or 99.9%

[@michaelunmann]

@@4.0Solutions How would total Quality be measured for both machines combined? Parts (1439+23) / (1440+24) = 99.8% or Time (1380+1439) / 2880 = 97.8% Using time weights the calculation for the part that took 1 hour

[@ZackScriven]

@@michaelunmann I see what you are saying now. Excellent point. I'll bring this up to Walker to see how its currently being handled. I *believe* don't quote me, that when rolling up OEE numbers they are simply averaged and equally weighted. (99+95) / 2 = 97%. At the end of the day, you would need to drill down to find root cause anyways. Comparing quality across these two different machines doesn't make a whole lot of sense. the 99.9% quality machine doesn't have an issue. but the machine that takes 1 part per hour... obviously messing up a part is detrimental.

[@ifi808]

This is my first video of yours but I really liked the whole presentation. I am new to this kind of work and found it insightful. I really would like to get more in depth on this structure

[@4.0Solutions]

Thank you! We’re glad to help. We have a whole playlist on OEE.

[@yuting3936]

From the perspective of cost accounting learning, it has benefited me a lot. Thank you so much.

[@4.0Solutions]

You're welcome Samantha!

[@newbernbears]

OEE is a bogus number that puts managers to sleep. It does not tell your capability if you have trouble coming, how to improve processes, or how to know you have. Nice presentation of bad material. When I was young, a manager once told me an operator had higher OEE than me. I said "Dennis. did you forget all the Saturdays we had to work overtime reworking the junk he made?" That's how stupid OEE is. The company folded in 7 years and 7 months, could not compete.

[@4.0Solutions]

If he made junk than that should’ve affected his quality score because he didn’t produce good parts. It's not OEE's fault your mgr didn't know how to calculate it.

[@bagusgp8933]

you know, you're very smart and realistic, thank you for sharing this video.

[@4.0Solutions]

Thank you Cuos!

[@probuildcreations330]

I love the setup. It is easier to follow. Some more light on you may be better. Super well done!

[@4.0Solutions]

Awesome, thank you!

[@wissaljebali6425]

I'm working on a MES project, your videos saved my project.thank uuuu

[@4.0Solutions]

Glad we could help!

[@4.0Solutions]

What project are you working on next? How can we help!

[@morenoaf]

man, your training skills are really amazing Thanks for this fantastic explanation about OEE

[@4.0Solutions]

Thank you, Alexander!

[@70chvlSS]

Really like the new approach! Keep the awesome content coming as this is a must for all US manufacturing companies to understand if they do not adopt I 4.0 they will not be in existence 5 years from now.

[@4.0Solutions]

Thank you Reggie! We keep saying that all the time! People still don't believe us.

[@rezajawas2858]

Im a student at an instrumentation and electronics field, your videos does help me to gain insight to my study, thank you, i like the new setup but please do not write out of bounds

[@4.0Solutions]

Thanks for sharing Reza!

[@tangramsolution]

the most effective video i watched for OEE explanation.

[@4.0Solutions]

Thanks!!

[@shubhamquantum]

Learnt a lot from this video This blacktransparent approach is more enticing compared to typical whiteboard-marker setup. Keep it up guys!!!

[@kartigya]

I cleared my interview for Tata motors just by watching your videos..Thanks

[@ShobitJain]

Great explanation. Thank you!

[@4.0Solutions]

Glad you enjoyed it!

[@sharyudeshmukh7020]

Explained very well! Helped me a lot

[@4.0Solutions]

Glad to hear that!

[@dasdunetechnologies1695]

How do you calculate the cost per point in an automation project ?

[@walkerreynolds973]

We calculate it over time -- how many IO did project x have and how many hours did it take for the whole project -- for us, its 13 mins per IO point

[@4.0Solutions]

Great question!

[@Reitoft]

So you don't really need the OEE but the AQP - isn't that more accurate to say?

[@4.0Solutions]

You definitely need to calculate OEE. It's the organization-wide kpi to watch.

[@Reitoft]

@@4.0Solutions Well - I kind of anticipated that answer, but that doesn't make sense, as the OEE is a calculation consisting of AQP, and if you need to improve your production, the OEE consists of three parameters, but they are - as you describe - widely different, so how can OEE be a measure, if it's really AQP that needs to be addressed?

[@sherylmccrary9045]

Interesting to hear about clients eager to integrate but unclear on the value of OEE. Is this when you're approached first by IT, exec-level, and not OT mgmt? Having sold remote sensing data & analysis where use cases drove the project, this is new to me. Customers knew what info they wanted and why. They just couldn't get it from silo'd historians, let alone reliably in real time. I mean if you don't know the business value of integration to what you are already doing (cost of NOT integrating), why the interest?

[@4.0Solutions]

It's hard to see how one would not value OEE

[@philippm8445]

Quality content.

[@4.0Solutions]

Thanks Philipp!

[@harishs.krishnan7291]

Is there a "Love" button for all your information oozing out to the world. you are the industry 4.0 Che Guevara and I love you man!

[@4.0Solutions]

Thank you Harish! We love you too! 💜

[@gshirkov]

Thanks a lot for the very interesting and informative videos, Walker! On your question: I prefer the old design (whiteboard).

[@4.0Solutions]

Thanks for sharing!

[@yczhang2701]

good lecture with the best possible supportive tool makes this a very impressive presentation. I will certainly ve following the upcomng videos. thanks!

[@4.0Solutions]

Glad it was helpful!

[@ROTRUTHMIN]

Your videos are BOSS! Really feel that I am gaining significant insight into IIoT.

[@4.0Solutions]

Great to hear, Lance!

[@muhammadalhussein1674]

impressive

[@4.0Solutions]

Thank you!

[@BretWrightSTUFF]

Like this format, OEE is not optional, I like it. Helps me to understand it.

[@4.0Solutions]

Thank you!

[@gjmjeagles]

The new digital whiteboard is amazing! Great content!!

[@4.0Solutions]

I think so too!

[@fredflintstone8048]

This style of presentation is much nicer than the whiteboard method

[@4.0Solutions]

Thank you!

[@rajkumar-fy2ie]

Really good to see this kind of board in teaching. 👍

[@4.0Solutions]

Glad you liked it!

[@drtonyburns7321]

OEE is a nonsense number. "OEE is like using our weight times our height times our systolic blood pressure, as a measure of how good looking we are." - Dr Wheeler

[@4.0Solutions]

It's a relative number. If you aren't tracking it. you can't improve it.

[@drtonyburns7321]

@@4.0Solutions It is a bullshit, meaningless number.