Overall Equipment Effectiveness (OEE) is a metric used to measure the efficiency and effectiveness of a manufacturing process. It measures how well a piece of equipment or production line performs relative to its maximum potential. OEE is an essential key performance indicator (KPI) for manufacturers as it provides insights into inefficiencies and production losses that affect the bottom line.

OEE is a calculation considering availability, performance, and quality. Availability measures the time the equipment is available during planned production time. Performance measures the speed of the equipment during run time compared to the ideal cycle time, and quality counts the number of good parts produced by the equipment.

To calculate OEE, use the following formula:

OEE = availability x performance x quality

Let's take a closer look at each factor that makes up the OEE calculation.


Availability is the amount of time the equipment is available for use during planned production time. It takes into account both planned stops and unplanned downtime. Planned stops include time for equipment changeover, preventive maintenance, and other scheduled maintenance activities. Unplanned downtime is when the equipment is unavailable for use due to breakdowns or other equipment failures.

Availability Score = (Planned Production Time - Unplanned Downtime) / Planned Production Time


Performance measures the speed of the equipment during run time compared to the ideal cycle time. It takes into account both slow cycles and minor stops. Slow cycles are periods when the equipment runs slower than its maximum speed, while minor stops are short stops that occur frequently.

Performance Score = (Ideal Cycle Time x Total Units Produced) / Operating Time


Quality measures the number of good parts produced by the equipment. It takes into account rework and quality loss. Rework is the process of fixing defects in the product, while quality loss is the number of parts rejected due to quality issues.

Quality Score = Good Parts / Total Parts Produced

Benchmarking OEE

World-class OEE is typically considered to be 85%. This means an OEE score of 85% or higher is regarded as a benchmark for high-performing equipment. However, it is essential to note that OEE scores can vary depending on the industry, equipment type, and production process.

Improving OEE

Improving OEE requires a continuous improvement mindset and a willingness to identify and address inefficiencies in the manufacturing process. To improve OEE, manufacturers must first identify the six big losses: breakdowns, setup and adjustment, small stops, slow cycles, rework, and startup and shutdown losses. Once these losses are identified, manufacturers can develop strategies to reduce or eliminate them.

Preventive maintenance is an essential strategy for reducing breakdowns and improving equipment performance. Regularly scheduled maintenance can help identify potential issues before they become significant problems, reducing the amount of unplanned downtime.

Lean manufacturing and Six Sigma methodologies are also helpful for improving OEE. By analyzing real-time data collected during the production process, manufacturers can identify bottlenecks and inefficiencies in the production line and develop strategies to eliminate them.

Automation is another strategy for improving OEE. By automating repetitive tasks, manufacturers can reduce the time needed for equipment set up and improve overall equipment performance.

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