OEE
What OEE is
Definition, formula and interpretation of the standard production efficiency indicator.
OEE (Overall Equipment Effectiveness) is the standard indicator for measuring the production efficiency of a machine or a line. It answers a single question: of all the time the machine was expected to be in production, how much was actually spent producing conforming Units?
The formula
OEE = Availability x Performance x Quality
The three factors are percentages and multiply together. An OEE of 85% means the machine produced conforming Units for 85% of the time it could have devoted to production.
The product is severe by construction: three respectable factors at 90% give an OEE of 73%. That is exactly the point of the indicator, because losses add up even when each one, taken alone, seems tolerable.
The three factors
Availability. The time the machine actually spent producing, compared to the planned time. It is lost to failures, waiting for material or for an operator, unplanned stops.
Performance. The actual speed compared to the nominal cycle speed. It is lost to micro-stops, slowed cycles, speeds reduced for wear or out of caution.
Quality. The share of conforming Units out of the total produced. It is lost to rejects, rework, out-of-tolerance start-ups.
The formulas of the three factors and the signals needed to compute them are on the availability, performance and quality page.
How to read the number
| OEE value | Interpretation |
|---|---|
| above 85% | Benchmark of excellence, realistic for mature, highly automated plants. |
| 60-85% | The typical manufacturing range. Improvement margins can be identified. |
| below 60% | Significant losses. Better to look for the causes before acting on the machine. |
These are indicative values: the real benchmark depends on the sector, the type of process and the age of the plants. An OEE of 55% on a line with frequent changeovers can be a good result; 75% on a continuous plant can be a problem.
The absolute value matters less than its composition and its trend. An OEE falling because of Performance tells a different story from one falling because of Quality, and calls for different actions.
OEE and TEEP
OEE measures efficiency within planned time, that is, the scheduled shifts. TEEP (Total Effective Equipment Performance) uses total calendar time as the denominator, nights and weekends included.
| Indicator | Denominator | What it measures |
|---|---|---|
| OEE | Planned time | Efficiency within production hours |
| TEEP | Total calendar time | Overall asset utilisation |
They serve different decisions. OEE is the everyday tool of continuous improvement. TEEP is an investment argument: before buying a new machine, it says whether the existing one is really saturated.