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.
Try It
Calculate your own OEE right here. Enter planned time, downtime, cycle time, and unit counts to get Availability, Performance, and Quality breakdowns with improvement guidance. (Also available as a standalone tool.)