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Why Cloud Computing Matters for OEE Improvement



This article will discuss:

  • How cloud computing enhances OEE reporting
  • Why cloud computing is important to OEE improvement
  • How industry stakeholders have applied cloud computing to boost efficiency levels

Determining operational efficiency within facilities relies heavily on overall equipment effectiveness (OEE) calculations. This is because it provides insight into the original equipment’s theoretical production or working capacity. The insight received can then be used to compare output from actual production cycles to improve the production process. Thus, data collection accuracy is important to OEE calculations and reporting of improvements and these are some of the many areas in which cloud computing can enhance. ,

Enhancing OEE reporting with cloud computing

According to IDC research, the manufacturing industry’s annual spending on cloud computing is expected to hit $210 billion by the tail end of 2019. This is due to the increased efficiency levels, scalability, and accuracy that the cloud has brought to the manufacturing process. Since OEE is an important indicator of a facility’s performance level, it is not far-fetched to deduce that the adoption of cloud computing also leads to OEE improvements.

But does available data support these deductions?

Accuride, a supplier of wheels for the automotive industry, manually collected equipment-related data in years gone by. The data collection process involved shop floor attendants monitoring machines to determine the number of components produced within an hour. The collected data was then transferred into an Excel spreadsheet that was used for OEE calculations and other managerial tasks.

To overhaul this inefficient data collection and monitoring process, Accuride adopted cloud-based resource planning solutions across seven of its machine systems. The cloud-based platform created a centralized ecosystem for streamlining data collection from the provisioned equipment. According to Accuride’s IT director, adopting cloud computing allowed for a far more accurate process for understanding manufacturing performance in real-time. This also led to OEE improvements and its butterfly effect led to enhancements in every area of production including supply chain activities and managing customer relationships.

Another example that supports the earlier deductions is that of MakeTime. The CNC machine-parts sourcing firm makes use of data to access the performance levels of CNC machines and other production-related tasks to enhance shop floor performance. The data MakeTime collects helps manufacturers assess machine performance to ensure they function at their optimal capacity.

SMEs take advantage of the data provided by MakeTime to drive OEE improvements. The CNC machine data collected by MakeTime cloud computing platforms has helped SMEs assess machine performance, predict downtime, and source machine replacement parts before a breakdown occurs. Thus, with the aid of cloud computing, SMEs can enhance OEE performances, receive business insights, and deliver business growth.

These case studies highlight cloud computing’s ability to manage and scale up data collection processes with increased workloads. It also highlights the ability to track equipment efficiencies and adopt a data-driven plant optimization process within shop floors.

Why cloud computing is important to OEE improvement

Adopting a digital transformation approach to improving equipment efficiency and workspace productivity levels has become important to 58% of manufacturers. These manufacturers are interested in viewing interactive data of processes occurring across shop floors through comprehensive dashboards as it helps with business insight, real-time visibility, and decision making. This is where the computing resources, scalability, and flexibility of the cloud come into their own.

With cloud computing, real-time visibility into equipment performance can be achieved. Although the groundwork of ensuring the equipment produces accurate data must be done through edge computing, important KPIs can be collected and recorded for facilitation processes. Cloud computing platforms are also compatible with the tools needed for calculating OEE and other metrics around the shop floor.

This gives manufacturers the ability to monitor OEE in real-time to diagnose faults, downtimes, and reduced performance. Collected data can then be used to drive any efforts required for OEE improvement.

Standardizing operational best practices

OEE improvements are also reliant on interrelated processes that occur within the shop floor. Interrelated processes include managing supply chains, material handling equipment systems, and communication. In smart factories, IoT and IIoT devices or systems are also key considerations that improve OEE levels and create standardized policies or regulations that ensure the improvements are maintained.

Once again, cloud computing can be used to standardize shop floor processes that affect OEE improvements. This includes standardizing the OEE calculation process, delivery timelines, and workstation KPIs. The scalable nature of the cloud also makes it possible to develop a single source of truth provisioned to assist hundreds of pieces of equipment located in multiple facilities. This single source of truth provided by the cloud ensures any OEE improvements made can be replicated across multiple facilities thereby ensuring that production standards remain the same.

The benefits of standardizing OEE improvement through cloud computing also includes the ability to quickly set up a greenfield facility that delivers the same efficiency levels of already-existing shop floors.

Increased accuracy levels

As earlier stated, OEE metrics are one of the KPIs that determine the productivity levels of any facility. This is why the integrity of the data collected and the calculations made must be at a high level. Cloud computing helps ensure OEE improvements and the steps taken to deliver them are recorded for posterity’s sake. If the OEE is accurate, then troubleshooting plant performance and holding specific production units to account for their shortcomings become possible as stakeholders can trust shop floor information.

The insight stored and produced by cloud computing tools also forms the basis for prioritizing other high-performing systems or equipment that delivers better returns. Thus, the accuracy levels cloud computing brings to OEE help enterprises stay competitive, go-to-market faster, and improve process quality. These improvements affect the earning potential of manufacturing enterprises and ensure business growth is properly managed.


The increased efficiency cloud computing brings to OEE and its interrelated processes are one of the reasons the market for cloud computing services is expected to increase by 17% in 2020. According to research conducted by the National Institute of Standards and Technology (NIST) alongside IndustryWeek, manufacturers are expected to increase spending on cloud computing to deliver a 3 to 5% increase in production efficiency in 2020. This highlights the manufacturing industry’s belief in cloud computing and its ability to optimize OEE and plant performance.



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