Can Your Business Benefit From OEE?

Can Your Business Benefit from OEE?

OEE (overall equipment effectiveness) is a standard for measuring the productivity of manufacturing. OEE scores are measured in percentages, with 100% meaning that you are getting the maximum possible production from your manufacturing line(s). OEE is calculated by measuring the quality of your production (how many good parts versus waste), how quickly your production is running, and the availability of equipment (how much of the timelines are running).

So, can your manufacturing operation benefit from an OEE system? To answer this question, start by taking the following quiz:


    1. Do you sell everything you produce?
    2. Are orders always filled on time?
    3. Do you know your top reasons for loss of production?
    4. Is overtime required to meet commitments?
    5. Do you need to increase profit?
    6. Do you need to improve your capacity?
    7. Are you sitting on a lot of inventory?

If you answered “no” to items 1-3, or “yes” to items 4-7, then YES, an OEE system can benefit you by identifying areas for improvement and opportunities for efficiency.

OEE systems allow plant managers to be proactive rather than reactive.

Life on the plant floor is often reactive. Late work orders, faulty machines, and other time-sensitive issues leave time for little else. Putting out fires takes time and energy, and compromises efficiency and long-term continuous improvement.

You must take a step back and see the big picture to resolve recurring problems.


Ask yourself:

WHY is this machine chronically broken down? Is maintenance required more often? Are poor materials causing jams? Is downtime more common on certain shifts or with certain operators?

An OEE system provides the data required to answer the following questions and more:


  • What are your top downtime reasons?
  • Where are lines producing waste?
  • What percent of work orders are completed on time?
  • Which operators oversee the most effective shifts?

OEE systems are an ideal means for identifying the causes of production bottlenecks.

A good OEE solution identifies constraints (or bottlenecks) by shining a light on what slows your plant down. Possible sources of inefficiency include:


  • Machine centers frequently blocked by downstream problems, or starved/waiting for upstream materials
  • Unexpected shutdowns for inspections or safety reasons
  • Injuries
  • Machine faults
  • Overcomplicated procedures
  • Material flow is intermittent or otherwise not ideal
  • Machines working at varied rates, and line limited by efficiency of slowest cell
  • Frequent rework cycles
  • Excessive waste or rejects
  • Unclear goals or production requirements
  • Undertrained operators


Every process has constraints. Focusing improvement efforts on your bottlenecks is the fastest and most effective path to higher profitability.

Illustration of how the OEE system works

OEE systems enable plants to transition from error-prone manual data collection to automated data collection.

Most plants have systems in place to track efficiency information. However, some resort to manual data entry, hard copies, spreadsheets, and even speculation. These are often error-prone, hard to maintain, and out-of-date. Without accurate data to drive objective decision-making, we default to making gut decisions, or “winging it.”

The best way to gather in-depth, accurate data is with an OEE system. Here are the top reasons why automatic data collection is a recommended practice:


  1. Focus on Production Goals – Because the primary focus on the plant floor is to keep production running smoothly, operators have limited time to document the details of production loss. Capturing data automatically reduces manual input, freeing up operators to focus on their top-priority task of meeting production goals.
  2. Real-Time Results – Hard copies, spreadsheets, and other inefficient methods of tracking often result in inaccurate and outdated information. This is too little, too late. Real-time visual feedback enables the plant floor to respond to production issues as they happen and resolve problems quickly before they become bigger and more costly.
  3. Data-Driven Decision Making – By automating as much data as possible, management is empowered to make data-driven decisions based on a history of automatically recorded facts rather than judgment calls. With access to reliable, accurate OEE data, the most inefficient constraints can be objectively targeted and improved for the biggest impact.


Choosing the right OEE solution requires an understanding of your current and future needs.

We’ve laid out some valid concepts, but how does it apply in the real world? What should you look for when shopping around for an OEE system? What information should you focus on when speaking to sales representatives? 


  1. Consider Your Budget – Many OEE systems require up-front investment in a perpetual software license. If the initial licensing fee deters you from investing in an OEE system, consider an SaaS solution that charges lower subscription fees on a monthly or annual basis. Furthermore, an SaaS provider absorbs the burden of maintenance, updates, backups, security, and health monitoring, which can decrease your ongoing IT labor.
  2. Plan for Future Growth – An OEE system should scale with your organization for years to come, both functionally and financially. For example, when considering licensing models, consider both short- and long-term pricing implications. Pricing models that charge for each machine, user, or screen can get expensive very quickly. Think carefully about these potential barriers to growth from the very beginning to avoid surprises later.
  3. Keep it Simple – The most customizable OEE systems are typically the most complex. This does allow for custom development, but that comes with longer project rollouts. Simpler, out-of-the-box solutions can be implemented more quickly. Spend the time to determine your own project requirements, implementation time frame, and the technical skill level of your staff to determine where your business falls on this scale. Our advice? Aim for simplicity where you can. A simpler, quicker rollout allows you to start realizing benefits from your investment much sooner. You can always add more functionality over time.
  4. Connect to Plant Floor Data – Many cloud or on-premise OEE systems require the purchase of hardware, regardless of whether your organization has existing processes in place to acquire plant floor data. However, one size does not fit all. If you are automatically connecting for the first time, maybe an edge-of-network/IIoT device is right for you. On the other hand, you may access your data through existing PLCs, a database, or a CSV file. Aim for an OEE system that can accommodate the current processes used within your company to avoid unnecessary expenses and IT labor.

Learn More About Sepasoft Connect.

Did this information pique your interest or align with your manufacturing goals? Visit our Features & Benefits page to learn more about the capabilities of Sepasoft Connect’s OEE Cloud solution. If you think Sepasoft Connect would be a good fit for your business, feel free to contact us for a live demo.