Overall equipment effectiveness (OEE)

What is it?

Overall equipment effectiveness (OEE) is a key performance indicator that measures an asset’s productivity. It is made up of three factors: availability (how often an asset operates when necessary), performance (how much it produces), and quality (how many high-quality products it manufactures). In simple terms, maxim OEE will indicate that machinery does not undergo any unplanned downtimes, i.e., the time when it is not working, functions at the most rapid pace, and produces every unit without quality defects.

How does it work?

OEE percentage is figured by multiplying availability, performance, and quality. The first step is to calculate availability by dividing an asset’s run time by the planned production time. For instance, if equipment malfunctions and operates 7 hours instead of 8, availability will be 0.875 or 87.5%.  

Next, performance is calculated by multiplying the ideal cycle time (the fastest possible time to produce one unit) by the total number of units and dividing the result called net run time by run time. If the ideal cycle time is 1 hour, but the asset manufactures 6 units after 7 hours, performance will be 0.857 or 85.7%.  

Quality is worked out by dividing the number of usable items by that of all the produced ones. If only 3 units out of 6 are up to standard, quality will be 0.5 or 50%. In this case, OEE is 0.875 × 0.857 × 0.5 = 0.375 or 37.5%.