Introduction to OEE (Overall Equipment Effectiveness)

Do any of the following ring true for you, perhaps OEE is the answer.
  • Does your plant have the capacity you are aware of but can’t tap into reliably?
  • Can performance be measured comparatively across all production areas?
  • Is there a bottleneck affecting the total plant performance?

When considering the efficiency of production resources one must consider at least machines, process and people. OEE (Overall Equipment Efficiency) is a powerful performance indicator that can be simply calculated based on Availability (Time), Performance (Speed) and Quality (Product Scrap).

OEE provides an easy to understand, a single measurement of efficiency and is typically supported by tools that can assist with continuous improvement where required.

What is OEE? 
OEE is an essential metric and basic methodology for manufacturers pursuing a 'lean' manufacturing strategy - that is ‘zero waste’ in their ‘value streams’.

OEE is simple and practical. It takes the most common and important sources of manufacturing productivity loss, places them into three primary categories and distils them into metrics that provide an excellent gauge for measuring where you are - and how you can improve! OEE isn’t enough for root cause analysis on its own but measures the effectiveness trend of improvement actions.

OEE is frequently used as a key metric in TPM (Total Productive Maintenance) and Lean Manufacturing programs giving you a consistent way to measure the effectiveness of TPM and other initiatives by providing an overall framework for measuring production efficiency.

OEE Categories
In order to better understand and group time lost, we can group events into different categories. Looking at the total time available the first category "Scheduled Time" refers to the maximum time we have to manufacture by design. 

Planned Production Time is what remains of the Scheduled Time once we consider the impact of events such as breaks, lunch, scheduled maintenance, and holidays where there was no plan to run production.


OEE measures how effectively we use the Planned Production Time and considers the impact of productivity loss events that occur. The goal is to better understand which of these events have the most impact and how can these losses be removed or reduced to improve the effective use of our planned production time.

By definition, OEE losses are split into three categories namely – Availability (Downtime) LossesPerformance (Speed) Losses and Quality (Yield) Losses.

OEE = Availability% x Performance% x Quality%


Availability is the ratio of Operating Time to Planned Production Time (Operating Time is Planned Production Timeless Downtime Loss).
Availability of 100% means the process has been running with no stops.
Availability = Operating Time / Planned Production Time



Performance is the ratio of Theoretical/Ideal Speed to Actual Speed. Performance of 100%means the process has been consistently running at its theoretical maximum speed.
Performance = Parts Produced / (Ideal Speed * Operating Time)


Quality is the ratio of Good Parts to Total Parts. Quality of 100% means there have been no reject or rework parts.
Quality = Good Parts / Parts Produced

OEE Summary
OEE is now a measure we can use to monitor the efficient use of a production facility for the production of good product.

This is important to enable a business to understand how well they are using their asset investment and are improvements (new equipment, automation, better procedures) actually resulting in a positive outcome expected in order to achieve a sound return on investment.



Common Loss Events
One of the major goals of TPM and OEE programs is to reduce and/or eliminate losses. The following table lists the Common Loss Events, and how they relate to the OEE Categories.

Common Events OEE Category Comment
Equipment Breakdowns Availability Loss

Depending on the specifics of the production environment, a certain variety of breakdowns not requiring maintenance could be categorised as Performance / Speed Losses.

Process Setup and Adjustments Availability Loss

Includes certain operator errors and product changeovers.

Setup time reduction programs such as SMED can be used to address these losses.

Short Stops and Idling Performance Loss

Shortstops are typically those which do not require maintenance. Generally, problems with consumables could be categorised as Performance / Speed losses.

Reduced Speed Performance Loss

Factors such as equipment age or production anomalies that keep the operation from running at maximum theoretical speed would be included in this category.

Start-up Rejects Quality Loss


Product lost (rejected) during the initial stages (transition) of startup prior to reaching steady state (regularly producing good products).


Production Rejects Quality Loss

Products lost (rejected due to defect) during the normal production stages.