What is OEE?

Overall Equipment Effectiveness or OEE refers to the gold standard for measuring manufacturing efficiency. The calculation of OEE takes into account three factors known as Performance, Availability, and Quality.

OEE is a critical metric used in manufacturing industries to gauge the performance of production equipment. It measures the percentage of time that a machine or production line is being utilized effectively to produce quality products. The three components of OEE - Performance, Availability, and Quality - work together to give a comprehensive assessment of production efficiency. Performance refers to the speed at which the machine is producing goods, Availability measures the time the machine is operating, and Quality measures the number of products that meet the required specifications. By measuring OEE, manufacturers can identify areas of inefficiency and optimize their production process to increase output, reduce downtime, and improve product quality.

A 100% OEE means that a manufacturing unit is producing only good parts at the fastest possible speed without any downtime.

Though it is not possible to have an OEE of 100% in practical application, manufacturing units can constantly strive to improve their uptime, reduce rejects (waste) and boost their equipment operation speed. Being a manufacturing best practice, OEE can help organizations identify wastes, benchmark a shift's progress or improve the manufacturing processes.

OEE (%) = Performance X Availability X Quality

The Best-in-Class OEE:

Availability: 90%

Performance: 95%

Quality: 99%

OEE: 85%