OEE (Overall Equipment Effectiveness)
OEE is the key metric for machine and equipment productivity. It combines availability, performance, and quality into a single percentage value.
Overall Equipment Effectiveness (OEE) measures how effectively a machine or piece of equipment is actually being used. It is the product of three factors: Availability (planned vs. actual runtime), Performance (target vs. actual speed), and Quality (good parts vs. total production).
An OEE of 100% means: The machine runs without any downtime, at full speed, and produces only defect-free parts. In practice, an OEE of 85% is considered world-class for discrete manufacturing.
The strength of OEE lies in its decomposability: When the value drops, the three individual factors immediately show where the problem lies -- unplanned downtime, speed losses, or scrap.
Typical OEE values in industry range between 60% and 75%. The gap to 85% represents enormous improvement potential -- often equivalent to an additional shift without purchasing a single machine.
Formula
OEE = Availability x Performance x Quality
Practical Example
An injection molding machine is scheduled for 8 hours but only runs 6.5 hours (Availability: 81.3%). It produces 780 instead of the possible 900 parts (Performance: 86.7%). Of these, 750 are good (Quality: 96.2%). OEE = 0.813 x 0.867 x 0.962 = 67.8%. By reducing setup times by 30 minutes alone, availability rises to 87.5% and OEE to 73%.
How Leanshift Helps
The target state calculator in Leanshift automatically computes OEE from recorded process times. This allows you to instantly see whether availability, performance, or quality is the lever for improvement.
Frequently Asked Questions
What is a good OEE value?
85% is considered world-class for discrete manufacturing. The average ranges from 60-75%. More important than the absolute value is the trend: If OEE rises over time, the equipment is improving.
How do you calculate OEE?
OEE = Availability x Performance x Quality. Availability = Runtime / Planned Time. Performance = (Parts Produced x Ideal Cycle Time) / Runtime. Quality = Good Parts / Total Parts.
What is the difference between OEE and TEEP?
OEE measures effectiveness during planned production time. TEEP (Total Effective Equipment Performance) includes total calendar time -- including planned downtime like weekends.
Related Terms
Takt Time
Takt time is the pace at which a product must be completed to meet customer demand. It is determined by the market, not by the machine.
Cycle Time
Cycle time measures how long a single process step actually takes -- from start to finished result. It is the foundation of every process analysis.
SMED (Single Minute Exchange of Die)
SMED is a method for drastically reducing setup times. Goal: Every changeover in under 10 minutes -- in the single-digit minute range.