OEE

OEE stands for Overall Equipment Effectiveness. It tracks how well one piece of equipment ran over one span of time. It looks at three questions:

1. Availability: Did the machine run when you planned to run it?
2. Performance: When it was running, did it run as fast as it was designed to run?
3. Quality: How much of the output met standards on the first try?

Imagine your equipment is running for 90% of your planned time. While running, it operates at 90% of its ideal speed. And 90% of what it produces is good. On its own, each of those three numbers looks acceptable.

You can see this clearly if you follow the minutes. Out of 100 planned minutes, Availability leaves you with 90 minutes of run time. Performance keeps 90% of those 90 minutes, which is 81 minutes. Quality keeps 90% of those 81 minutes, which leaves 72.9 minutes.

No single factor lost more than ten points. Together they put the result seventeen points below 90%.

In real operations, the three factors are rarely identical. Here is how a real eight-hour shift on a filling line looked.

When you multiply 85.0% by 90.0% by 97.4%, you get 74.5%. Two of those three numbers would pass a review on their own. The combined score still sits ten and a half points below the 85% mark that people call world class.

This is why OEE is useful. It shows how small losses across different areas combine into a larger total loss.

The top number of the fraction stays the same. The bottom number changes depending on what scope of time you want to evaluate.

Because of how they are calculated, these three metrics will always rank in the same order for any given machine: OEE will be the highest, followed by OOE, followed by TEEP. If you increase the total time in the denominator while keeping productive minutes the same, the percentage naturally goes down. If your OEE goes up while your TEEP stays unchanged, it means the machine ran better during the hours it was scheduled, but total output across the full day did not increase.

Each metric helps you answer a different practical question:

• OEE tells you how effectively you used the time you actually intended to run. This is a maintenance and operations question that your team can address directly on the shift.
• TEEP (Total Effective Equipment Performance) shows how much total capacity you have across all 24 hours of the day (1,440 minutes). In this example, the machine was not scheduled to run for 960 minutes of the day. No amount of maintenance work recovers those minutes. Check TEEP before deciding whether to buy additional equipment, because it shows how much unscheduled time is still available on the machines you already have.

Looking at both metrics gives a complete picture. A low OEE with a high TEEP means your machine is running frequently, but running poorly. A high OEE with a low TEEP means your machine runs very well when scheduled, but sits idle for most of the day. Those two problems need different fixes, and only one of them is a maintenance job.

Note that definitions of OOE (Overall Operations Effectiveness) can vary between organizations. In the table above, OOE divides productive time by the full scheduled shift, including breaks. Whenever you share an OOE or OEE number, always make sure everyone understands which total time you are using as the denominator. If someone tells you a line runs at 85 percent, ask what they divided by before you compare that number to anything.

How is OEE calculated?

Multiply Availability by Performance by Quality. On the filling-line shift that is 340 ÷ 400, times 306 ÷ 340, times 298 ÷ 306. The middle terms cancel, leaving 298 ÷ 400 = 74.5%. The method comes from Total Productive Maintenance, where it was built to expose the six big losses on one machine.

What counts as planned production time?

The scheduled shift, minus the time you never meant to run: breaks, meetings, and hours with no demand. On the filling line that is 480 minus 30 minus 50 = 400 minutes. Unplanned stops stay in, because they are what OEE is there to measure.

What is a good OEE score?

The 60% typical and 85% world-class figures are rules of thumb, not measured benchmarks. An asset running twelve changeovers a day cannot post the same honest number as one running a single product all week. Compare your asset to its own trend instead.

Why do the three OEE factors multiply instead of averaging?

Because each factor divides by the one before it. Average three factors of 90% and you get 90. Multiply them and you get 72.9. Only 72.9% of planned time survived all three, so 72.9 is the true answer.

What is the difference between OEE and TEEP?

The clock, not the method. Both count fully productive minutes. OEE divides by planned production time: 298 ÷ 400 = 74.5%. TEEP divides by every minute in the calendar day: 298 ÷ 1,440 = 20.7%.

What should I do if Performance comes out above 100 percent?

Fix an input, never the output. A Performance over 100% means the ideal cycle time you divided by is slower than the asset really runs, or nobody logged a stop. Cap the figure at 100 and you hide the fault while the OEE stays wrong.

Target numbers are only general guidelines. The standard figures of 60% for a typical operation and 85% for world-class performance are rules of thumb. No published measurement stands behind them. They travel because they are easy to repeat.

A machine that requires twelve product changeovers per day will naturally have a lower OEE than a machine that runs the same product all week without stopping. If you compare those two machines directly, you are mostly measuring the difference in scheduling, not how well the equipment was maintained. The most meaningful comparison is tracking how a single machine performs against its own past record over time.

Manual logs often overestimate OEE. Paper logs usually show higher OEE scores than automated tracking systems. When operators record stops by hand, minor stops lasting only a few seconds or a minute often do not get written down. If your OEE score drops right after you install automated sensors, your equipment did not suddenly get worse; you simply started capturing the short stops that were previously missed.

Maximizing OEE on non-bottleneck machines can create waste. If you push a machine to 95% OEE when it is not the bottleneck in your process, it will simply produce work faster than the next step can handle. This leads to overproduction, which ties up space and working capital.

A very high OEE can also mean you have used up your spare capacity. When the bottleneck stops, you have nothing left to catch up with. Focus your OEE improvement on the bottleneck process. For non-bottleneck equipment, focus on reliability and uptime so it runs when needed; see MTBF.

Counting reworked items as good inflates the Quality score. The Quality factor is meant to measure items that are good on the very first pass. If an item comes off a process defective, gets repaired, and then passes inspection, it consumed extra time and capacity. If you count reworked units as good on the first pass, you hide both the defect rate and the time lost to rework. If your Quality factor never moves, check the counting rule before you congratulate anyone. For more on this, see first-pass yield and jidoka.

To take action on your findings, use the framework in Total Productive Maintenance to organize your improvement work, and review the six big losses to categorize and address specific causes of downtime.