You may have heard the term “machine efficiency” thrown around but struggled to understand what exactly it referred to. You’re not alone.

Machine efficiency is actually one of the most misused and misunderstood metrics in secondary packaging. So, we’re here to clear things up. We want you to truly understand machine efficiency and to properly leverage it for your line.

In this article, we’ll cover:

• What machine efficiency is
• How to measure machine efficiency
• The difference between nameplate and theoretical speed
• How efficiency and OEE aren’t the same
• How efficiency can be used for your next purchase

Machine efficiency, at its basic understanding, is simple. It measures how much of your machine’s output capacity you achieved during a defined period. It’s typically expressed as a percentage.

An efficiency percentage shows how much you accomplished compared to how much you could have accomplished, at “full capacity.”

Take this example:

Our theoretical output is 30 cases per minute (CPM), but we actually produced only 24 cases in the last minute. We only did 80% of what we were actually capable of. Our efficiency is then rated at 80%. And our goal in the next minute is to increase production and achieve better efficiency.

Here’s how machine efficiency is mathematically calculated:

Like we said, the basic understanding is relatively simple math. But efficiency is easily complicated, and that’s when miscalculations come in.

The first complication: how do you define output capacity – or “theoretical output”? We could base it on nameplate speed, which is the rated maximum speed your machine can run.

But nameplate is usually a skewed reflection of real capacity. It’s not a target; it’s a ceiling. Most machines run below their nameplate speed when they’re actually in the facility. This is due to real production conditions like:

• Changeover time
• Maintenance (scheduled or unscheduled)
• Upstream and downstream conditions
• Material variability (jams and stoppages)

Nameplate speed is technically what the machine could run, but no operation is running a sustained throughput at their maximum speed all of the time. So, what is a realistic maximum? What is a proper theoretical output?

These are questions we can’t answer perfectly, which is why efficiency becomes so complicated. The truth is that machine efficiency might never be perfectly calculated – at the end of the day, it’s still only an estimation.

Machine efficiency and overall equipment effectiveness (OEE) are not the same metric. They’re related – both reflect productivity – but they’re not expressing the same equation. OEE is a broader metric, which is made up of three factors:

1. Availability
   The ratio of actual run time vs. planned run time; in other words, how long you were actually running compared to how long you were planned to be running.
2. Performance
   The ratio of how fast you were actually running vs. the maximum speed you could have been running. Hint: this metric is where efficiency lives.
3. Quality
   Accounts for output that doesn’t meet quality standards; actual usable output vs. planned usable output.

Here’s how efficiency and OEE differ in results: a line can be really efficient – producing at a high rate – but still have a low OEE. Besides speed alone, many factors could drive OEE down. Perhaps the output wasn’t to quality standards, or maybe the machine was unexpectedly down for an hour with an undiagnosed fault. OEE measures those things, efficiency does not.

When making equipment decisions, efficiency should come into play. It’s a way to understand your team and your line, and it’s a way to understand your vendor and the machine you’re looking at.

Here are a few ways efficiency can aid your equipment decisions:

• Match Speed to Your Line
  Efficiency provides an understanding of your realistic speed; if you output at 55 CPM on average, you won’t want to buy a machine that’s rated for 50 CPM or 150 CPM.

• Inform Nameplate Speed
  Knowing how your team has previously compared to rated speeds, you can ask your vendor what conditions their nameplate speed was captured under. And you can understand how your line conditions may differ.

• Estimate Return on Investment (ROI)
  The closer your efficiency comes to rated speeds, the faster you’ll reach ROI. You’ll be outputting more cases per minute, ultimately increasing the operational value of the machine.

• Ensure Line Balance
  When an upstream machine produces at one rate, while a downstream machine produces at another entirely – bottlenecks are sure to develop. Efficiency allows you to realistically understand throughput and buy a machine to fit.

Knowing your machine efficiency provides a realistic estimation of how your team uses machinery – how close you come to rated speeds. Through a concrete, numerical metric, it helps you better know your line and understand how a new machine will fit.

In simple understanding, machine efficiency is just one way the industry further measures productivity – but it’s never a perfect metric. When efficiency is properly understood, the best it can do is communicate a realistic estimation of used line capacity. And it’s only helpful if it’s a true representation of your line.

Leveraging efficiency well comes down to understanding the reality of your operation and setting realistic goals. You want to be compatible with your machine – in terms of skill, product, and efficiency. That all begins with understanding where your line is at, so you can understand where it has room to grow.