Mastering MTBF, MTTR, and OEE: The Triple Crown of Asset Capacity Planning

5 minutes

In the landscape of asset performance and planning, a trio of terms continually crops up. The driving metrics of capacity planning are overall equipment effectiveness, mean time between failures, and mean time to repair. These terms represent critical KPIs (key performance indicators) that several types of manufacturers rely on to assess their operation’s capacity, their equipment's reliability, and turnaround times. Let’s take a dive deeper into these fundamental metrics and unveil their impact.

Overall Equipment Effectiveness (OEE)

What is OEE?

Overall equipment effectiveness is the gold standard for measuring manufacturing efficiency. It assesses how efficiently a manufacturing unit performs relative to its designed capacity during its operational periods. It is also used as an effective capacity planning metric. Yes, in a perfect world, we can achieve 85% or higher OEE (world-class) but it is not realistic for most. OEE allows you to understand historical performance when manufacturing a type of product, therefore rather than hoping we get this order to client in time, we can understand realistic production output and delivery window.

Why is it important?

OEE is calculated by multiplying A-P-Q (explained in-depth below). OEE, by asset or by line, allows you to focus attention on the least effective asset. Then from there understand the lagging output metric leading to poor performance. In short, it shows you where your inefficiencies are.

In-depth look

OEE comprises three pivotal factors: Availability (actual operating time versus planned production time), Performance (actual run rate versus designed run rate), and Quality (good units produced versus total units started). The comprehensive OEE formula is:

OEE = Availability × Performance × Quality

Though a 100% OEE is idyllic, scores around 85% are heralded as world-class in both process and discrete manufacturing.

Mean Time Between Failures (MTBF)

What is MTBF?

Mean time between failures represents the average time interval between equipment failures. Think of it as the equipment's reliability barometer, signaling how frequently it's expected to fail during its lifespan. MTBF is one part of the Reliability equation. The inverse of MTBF is the failure rate.

Why is it important?

Imagine if you predictably got sick every two months (MTBF = 60 days) what would you do with that information?  Get a checkup, implement some preventive medicine practices, routinely or at least prior to that 60-day mark. Ahh, same goes with how you schedule, maintain, and operate your assets with the use of MTBF.

In-depth look

It's worth noting that MTBF is relevant mainly for assets that can be repaired after a malfunction, rather than those run-to-failure, then replaced. The formula for MTBF is:

MTBF = Number of operational hours ÷ Number of failures 

For a more in-depth read, check out the comprehensive overview of MTBF in the Learning Center. 

Mean Time to Repair (MTTR)

What is MTTR?

Mean time to repair measures the average time required to diagnose and repair an asset, returning it to operational status and base-operating condition.

Why is it important?

Imagine a critical machine in a manufacturing plant breaking down. The swifter the repair, the quicker the resumption of production, minimizing losses.

In-depth look

MTTR underscores the maintenance efficiency and/or the equipment's inherent ease of Maintainability.. How invasive is it to remedy the issue? The underlying objective is to keep MTTR minimal. Monitoring this metric can help in future design planning of replacement assets. Like Reliability, buyers can require design features that increase their assets' maintainability. The formula for MTTR is:  

MTTR = Total downtime x Number of failures

MTTR = Number of failures x Total downtime​

The Interconnection and the Balancing Act

Striving for a high OEE might overburden assets, reducing MTBF. Likewise, extensive MTBF, if paired with a high MTTR, might not promise satisfactory reliability. Hence, understanding and balancing these metrics is vital.

From a capacity planning perspective, think of it from OEE to MTBF to MTTR, or vice versa. When the asset is running, what is my expected output? Factor into that plan, how often it needs proactive attention (MTBF), and lastly, when it goes down, what is the average turnaround time (MTTR)? This will help production and maintenance balance realistic expectations of asset performance versus operational needs.

How does a CMMS fit into OEE/MTBF/MTTR? CMMS’ play a pivotal role influencing these metrics. Here is how:

  1. Availability: CMMS is a tool used to track both repair and maintenance activities for an asset. The more proactive we become, the more downtime we are mitigating. What is the right ratio of preventive versus reactive maintenance for you? World-class, like OEE, is more than 85% proactive work. That is not economically feasible for every industry. Find the right balance for you and optimize it. The key here is mitigating downtime factors through proactive and condition monitoring techniques, and you will increase the availability of your assets.
  2. Sensors: Modern CMMSs, like Asset Essentials™, can consume existing process data (PLC, SCADA, MES) using our Smart Assets application, or retrofitting with new sensors, allowing maintenance teams to ease the burden of now being able to be everywhere and see everything, all the time. Monitor critical assets, set thresholds, and act on those alerts to minimize functional failure damage to equipment — which will extend your MTBF significantly.
  3. Optimized Asset Lifecycle: With insights from these KPIs, CMMSs play a huge role in determining remaining useful life (RUI) and report on asset performance through maintenance work order history data. That includes top 10 problems, causes, as well as material cost and labor hours invested. If all these indicators are trending in the wrong direction, we need to have a repair versus replace conversation sooner rather than later. Your CMMS should help you tell this story.

In essence, OEE, MTBF, and MTTR form the cornerstone of informed capacity planning. As industries strive for efficiency, reliability, and quality, understanding and optimizing these metrics becomes a competitive advantage. Partnering with the right CMMS provider can be the game-changer, transforming these metrics from mere numbers to actionable insights driving business success.