What is OEE and OEM ?
OEE stands for Overall Equipment Effectiveness, while OEM stands for Original Equipment Manufacturer. Here’s a brief explanation of each term:
1. Overall Equipment Effectiveness (OEE)
OEE is a metric used in manufacturing to assess the efficiency and productivity of equipment or a production process. It provides insights into how effectively the equipment is being utilized and how efficiently it is producing goods. OEE takes into account three key factors: availability, performance, and quality. It is calculated by multiplying these three factors together:
OEE = Availability × Performance × Quality.
The result is expressed as a percentage, with higher percentages indicating higher efficiency and effectiveness.
2. Original Equipment Manufacturer (OEM)
OEM refers to a company that designs, manufactures, and sells products or components that are used as part of another company’s product. OEMs typically specialize in producing parts, sub-assemblies, or complete products that are then integrated into the final product of another company. The OEM provides the product or component under the other company’s brand or label, rather than selling it directly to end-users. OEM relationships are common in industries such as automotive, electronics, and computer hardware, where specialized components or parts are needed to assemble the final product.
Comparison of OEE and OEM
| OEE (Overall Equipment Effectiveness) | OEM (Original Equipment Manufacturer) | |
| Definition | A metric to measure equipment or process efficiency and productivity in manufacturing. | A company that designs, manufactures, and sells products or components used in another company’s product. |
| Purpose | Assess the effectiveness and utilization of equipment in production processes. | Produce parts, sub-assemblies, or complete products for integration into another company’s final product. |
| Calculation | OEE = Availability × Performance × Quality (expressed as a percentage). | N/A |
| Focus | Efficiency and productivity of equipment or production process. | Manufacturing and supplying components or products for integration by another company. |
| Examples | Measuring how effectively a machine is running and producing products. | A company producing car engines that are integrated into automobiles by an automotive manufacturer. |
| Application | Used by manufacturing companies to identify inefficiencies and improve equipment utilization. | Relevant in industries where specialized components or parts are needed for assembly in other products. |
