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Today we’re talking about your overall equipment effectiveness (OEE). If you’re a manufacturing executive or plant manager, OEE is a critical metric that you need to be on top of. Why? Because it’s an essential measure of plant reliability, which in turn is the measure of how well your plant/factory/facility is performing its intended function. 

Increasing plant reliability involves improving both equipment and process reliability. Knowing your OEE is how you begin to tackle the equipment side of things.

What is OEE?

Overall equipment effectiveness is an objective measure of the performance of a plant (or even a single piece of production equipment) that looks at three aspects of production: 

  • Quality: the percentage of units being produced that meet quality standards 
  • Performance/speed: the speed at which these units are being produced during planned production time (relative to the ideal)
  • Availability: the percentage of time that the production line is up and running (relative to the ideal) 

OEE is a key “best practices” manufacturing metric. According to some experts, measuring reliability using OEE is one of the top 5 signs of a reliable plant. Monitoring your plant’s OEE regularly will give you objective data to show if you’re improving plant reliability in this area. You can also use this metric to make the case for upgrading a piece of production equipment.

How to calculate your plant’s OEE

Here’s the basic formula for calculating OEE: 

Overall equipment effectiveness = Quality (%) x Performance (%) x Time Availability (%)

This simple formula uses the three loss-related factors (quality, performance/speed, and time availability) to get an overall picture of your plant’s performance. Let’s look at each of these three factors in turn.


In order to find your quality number, you need to determine your good count. Good count is just quality loss expressed as a positive value—the number of units that meet quality standards. You can determine quality using this simple formula: 

Quality = Good Count / Total Count

In a perfect world, all the units produced would meet quality standards, and your Quality would be 100%.

Performance (speed)

To discover your Performance, you need to know what is the shortest time that it should take to produce one unit when everything is working perfectly. That is your Ideal Cycle Time. Run Time is also a simple measure—it’s your planned production time minus any unplanned downtime.

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


Availability refers to the amount of time your plant (or piece of equipment) is up and running (run time). Downtime periods are subtracted from planned uptime to see how often equipment failure is preventing production. The simple formula is:

Availability = Run Time / Planned Production Time

Once you have determined your Quality, Performance/speed, and Availability, you simply plug them into the main formula and get your OEE score.

What does it all mean?

To put things in perspective, an OEE score of 100% would indicate that your plant is producing only quality goods (with no rejects) at maximum speed, with no downtime at all. (Ahhh! What a thought…)

Obviously, that’s not happening, but a score of 85% is considered “world class” and is a good long-term goal to work towards. 

A score of 60% is not bad—it’s fairly typical, indicating room for improvement.

A score of 40%, however, would indicate that there is lots of room for improvement. The good news is that, at this level, it’s pretty simple to make large improvements, for example by simply addressing the causes of your downtime one by one.

Regularly monitoring your plant’s OEE allows you to document improvements.

What’s often more important than the overall OEE score, however, is the three sub-scores. Each of these three factors—quality, performance, and availability—points to different potential problems, and serves as a diagnostic tool to direct your efforts to improve plant reliability.  

For example, you may find that your rate of quality units is very high, and your performance speed is generally very good, but that your availability is low due to too much downtime. Then you can work on strategies to reduce downtime, such as maintenance training

Here’s a great video that will walk you through an example OEE calculation, showing the math.

That’s it for this week, Troubleshooters! Be sure to tune into TST again next week as we begin a new series on lean manufacturing.

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