OEE (Overall Equipment Effectiveness)

OEE is calculated by multiplying three percentages: Availability x Performance x Quality. Availability measures the percentage of scheduled time that equipment is actually running, accounting for downtime from breakdowns, changeovers, and other stoppages. Performance measures whether the equipment is running at its maximum designed speed. Quality measures the percentage of output that meets specifications without rework. For example, consider a machine scheduled for an 8-hour shift (480 minutes). It experiences 40 minutes of downtime, giving 440 minutes of run time and 91.7% availability. During those 440 minutes, it should produce 1 unit per minute (440 units), but actually produces 400 units, giving 90.9% performance. Of those 400 units, 380 pass quality inspection, giving 95% quality. OEE = 91.7% x 90.9% x 95% = 79.2%. World-class OEE is generally considered to be 85% or higher, but the global manufacturing average hovers around 60%. The power of OEE is not in the aggregate number but in the decomposition. It tells you precisely where losses occur. If availability is low, focus on reducing downtime. If performance is low, investigate speed losses and minor stoppages. If quality is low, address process capability and defect root causes. Each component points to different improvement strategies. Tracking OEE over time reveals trends and the impact of improvement initiatives.