Overall equipment effectiveness, almost always called OEE, is a widely used single measure of how effectively a piece of equipment or a work center is being used. This piece is about measuring OEE in Odoo.
What OEE captures
OEE is a measure of how effectively equipment is used, relative to its full potential. The idea behind it is that a piece of equipment is rarely producing good output at full rate all the time. It loses effectiveness in a few ways: it is sometimes not running when it could be, that is lost availability; when it runs, it sometimes runs slower than it could, that is lost performance; and some of what it produces is not good, that is lost quality. OEE brings these together into a single measure of how much of the equipment's full potential is actually being realised. A higher OEE means the equipment is being used more effectively; a lower OEE means more of its potential is being lost.
Why OEE is useful
OEE is useful because it condenses equipment effectiveness into one number that a manufacturer can track and improve, and because the components behind it point to where the loss is. If a work center's OEE is low, the question is why, and the answer lies in the three areas: is it losing availability, is it down too much; is it losing performance, running too slow; is it losing quality, producing too much that is not good? Each points to a different kind of improvement. So OEE is both a headline measure of how well equipment is used and, through its components, a diagnosis of where the effectiveness is being lost. For a manufacturer wanting to get more out of its equipment, OEE is a natural measure to use.
How Odoo measures OEE
Odoo computes overall equipment effectiveness for work centers. A work center carries an OEE figure, computed from the data the work center accumulates as production runs, and a work center can also carry an OEE target, so the actual OEE can be seen against the target. This means a manufacturer running production through Odoo's work centers gets OEE measured as a by-product of normal operation: as work orders run, as time is recorded, as production and downtime accumulate, the OEE of the work center is computed from that.
OEE depends on the data
Because Odoo computes OEE from the data work centers accumulate, the OEE figure is only as good as that data. It depends on production time being recorded, on downtime being recorded with its reasons, on production and any quality issues being recorded faithfully. A manufacturer that records its production properly, work orders run and timed, downtime recorded, gets a meaningful OEE. A manufacturer whose floor recording is patchy gets an OEE figure that does not reflect reality. So measuring OEE well rests on the same foundation as so much else: faithful recording of what happens on the floor.
Using OEE to improve
The point of measuring OEE is to improve it, and improving it means improving the equipment's effectiveness. A manufacturer uses OEE by watching it, comparing it to the target, and, where it is low, looking at which of the three areas, availability, performance, quality, is causing the loss, and acting there. Reducing downtime improves availability; addressing slow running improves performance; reducing defects improves quality; and each of those raises OEE and means more good output from the same equipment. Tracked over time, OEE shows whether the improvement is working.
OEE serves improvement, it is not the goal
An honest note. OEE is a useful measure, but it is a means, not an end. The goal is equipment that produces more good output more reliably; OEE is a way of measuring progress toward that and diagnosing where the losses are. A manufacturer should use OEE to guide real improvement, reducing downtime, addressing slow running, cutting defects, and not get lost in the number itself. The number is valuable because of what it tells the manufacturer to do.
The takeaway
Overall equipment effectiveness, OEE, is a single measure of how effectively equipment is used, bringing together losses of availability, performance, and quality. Odoo computes OEE for work centers from the data they accumulate as production runs, with a target to compare against. The figure depends on faithful floor recording. Use OEE by watching it against the target and, where it is low, acting on whichever of availability, performance, or quality is causing the loss. OEE serves improvement; the goal is more good output from the equipment. For how we approach Odoo for manufacturers, see our manufacturing work.