OEE
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OEE (Overall Equipment Effectiveness) measures manufacturing productivity by combining availability, performance, and quality into a single percentage.
Definition
OEE (Overall Equipment Effectiveness) is a metric that measures how effectively manufacturing equipment is utilized. It combines three factors: Availability (planned vs. actual operating time), Performance (actual vs. theoretical output speed), and Quality (good units vs. total units produced). OEE = Availability × Performance × Quality. World-class OEE is typically 85% or higher. The metric reveals the "six big losses" that reduce equipment productivity: breakdowns, setup time, idling/minor stops, reduced speed, defects, and startup losses.
Examples
A packaging line calculated: Availability = 90% (downtime for breakdowns and changeovers), Performance = 95% (minor stops and speed losses), Quality = 99% (rejects). OEE = 0.90 × 0.95 × 0.99 = 84.6%. This identified changeover time as the biggest improvement opportunity.
Key Points
- OEE = Availability × Performance × Quality
- World-class benchmark: 85% OEE
- Exposes six big losses: breakdowns, setup, idling, speed, defects, startup
- Each component reveals different improvement opportunities
Common Misconceptions
Higher OEE is always better. Very high OEE (95%+) may indicate the equipment is a bottleneck constraining the system, or that protective capacity has been eliminated. Optimal OEE depends on the equipment's role in the value stream.
OEE compares across different equipment. An 80% OEE on a critical bottleneck differs vastly from 80% on a non-constraint. OEE is best used to track improvement on specific equipment over time, not to compare unrelated machines.