Metrics Guide12 min read

Understanding OEE (Overall Equipment Effectiveness)

What is OEE?

Overall Equipment Effectiveness (OEE) is the gold standard for measuring manufacturing productivity. It identifies the percentage of manufacturing time that is truly productive. An OEE score of 100% means you are manufacturing only good parts, as fast as possible, with no stop time. In the language of OEE, that means 100% Quality (only good parts), 100% Performance (as fast as possible), and 100% Availability (no stop time).

The Three OEE Factors

OEE is calculated by multiplying three factors: Availability, Performance, and Quality.

1. Availability

Availability takes into account all events that stop planned production long enough where it makes sense to track a reason for being down (typically several minutes).

Availability = Run Time / Planned Production Time

2. Performance

Performance takes into account anything that causes the manufacturing process to run at less than the maximum possible speed when it is running (including both Slow Cycles and Small Stops).

Performance = (Ideal Cycle Time × Total Count) / Run Time

3. Quality

Quality takes into account manufactured parts that do not meet quality standards, including parts that need rework.

Quality = Good Count / Total Count

Calculating OEE

Ideally, OEE is calculated by multiplying these three factors:

OEE = Availability × Performance × Quality

World Class OEE

Availability: 90%
Performance: 95%
Quality: 99.9%
OEE: 85%

An OEE of 85% is considered World Class for discrete manufacturers. For many companies, it is a suitable long-term goal.

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