What does ‘OEE’ stand for?

OEE is a measure that reflects effectiveness of use of machinery. It can be calculated at several levels: each machine separately, each production shift level and entire manufacturing company.

Why do we measure OEE? Manufacturing enterprises processing large orders always want to maximize their utilization that can translate into better return on invested capital. In theory, most machines are able to work 24/7 with their optimal speed. However in reality there are several factors that can impact utilization of machines. For instance, micro-downtimes, changeover times, breakdowns and other external factors.

So how is OEE measured? Overall Equipment Effectiveness is often associated with the output that can be produced per minute, per hour or per entire work shift. However in reality OEE has 3 key components: Availability factor, Performance factor and Quality factor.

  • The availability factor –is a measure of losses due to unplanned equipment downtimes. Short-term shortages of labour, shortfalls in raw materials, lack of orders and technical defects are the main reasons for these types of losses. This factor can be improved through good production planning and particularly through sufficient maintenance of processes.
  • The performance factor – describes the theoretically possible productivity of the equipment. To ensure that the performance factor does not take into account availability twice, the performance factor is permitted only relate to the runtime, and not the operating period (= runtime + downtime). For calculation purposes, production speeds are compared to those from the past: The highest production speed is defined as the target performance in terms of 100% of the performance factor.
  • The quality factor – is a measure of the losses incurred due to products with poor quality. This may include defective products or materials which are outside the specifications. If products must be re-machined/processed, the performance factor is reduced.

The three factors are always smaller than 1 (100%). Therefore OEE is also always smaller than 1. An OEE value of 0.85 (85%) is usually considered to be very good. In very complex processes, OEE values of 0.6 are also considered very good performance. Continuous processes are sometimes at 0.95.

Loss visualization

OEE enables to present in graphical way data collected during the work of machines. Such visualizations show whether machinery is working in an effective way or not, e.g. how much time is lost for disorders reducing accessibility of the machinery. The figure below presents graphically representation of the manufacturing process.

In the methodology called Total Productive Maintenance (TPM), there are Six Big Losses associated with three major OEE elements.

Availibility factor:

  • Breakdowns,
  • Setup and adjustments (changeovers).

Performance factor:

  • Micro Down Times,
  • Operational Speed Losses

Quality factor:

  • Production rejects,
  • Startup rejects.


Availability can be defined as a time in which machine was available to manufacture goods. It can be influenced by two main factors: breakdowns and changeovers. Machinery used in the modern manufacturing companies consists of multiple moving parts and components that can break down. If this is the case, entire machine has to be turned off until total removal of a defect.

Changeover time is calculated as time used for setting up specific configurations of machinery that is associated with specific type of products. The most common changeovers are: change of a matrix or a form. Changeovers also include additional activities such as cleaning, regulation and conservation of machines necessary for reaching high quality of production.

Apart from breakdowns and changeovers, there several less frequent factors influencing availability: losses caused by breakdowns, losses caused by changeovers and planned down times.


Machinery can also operate with lower operational speed than usual one. Reduction of effectiveness is caused by unstable quality of products manufactured with lower speed. Additional factor which significantly disrupts production flows are micro down times.

Micro down times are down times shorter than 10 minutes, though in reality they last no longer then several seconds. Such short intervals are not reported as time losses, however are included in effectiveness losses as they reduce final output.


Quality factor takes into account all losses caused by manufacturing of products not matching quality norms (including deficiencies). Entire remaining time is a time of effective production.

In case of many machines there is a certain time required to reach optimal operational quality after being restarted. In those periods manufactured outputs can be faulty, until machinery operators do not optimise the process. Most often such losses are counted as deficiencies, but they can be also treated as a separate type of losses.

Methodology of measuring OEE

Regular calculation of Overall Equipment Effectiveness is a crucial way of monitoring losses that reduce machinery effectiveness. It allows for spotting types and recurring causes of problems occurring in the output devices. In the process of measuring, gathering and utilizing OEE, major role is played by the manufacturing staff. Machinery operators know the best how the equipment works and they have intrinsic motivation to have it fully operating.  

Down time losses

Such losses are measured in the units of time and they include: breakdown time, reparation time, changeover time, regulation time or other losses decreasing availability of machines. Breakdown and reparation time measures period up to the moment when manufacturing process is fully restored. Changeover and regulation time measures period between producing last item of product A and launch of production of first item of product B.

Operational Speed Losses

Losses caused by speed of operations are measured in the units of products. To calculate them OEE takes manufactured quantity of products and compares it with potential amount could manufactured by that machinery in case it was working with the optimal operational speed.

Product quality losses

In case of losses caused by product defects – loss of quality is measured in the units of products. Quality losses are calculated as a difference between total number of units produced and quantity that meets certain quality norms. Losses include those products requiring reworks and those deficiencies that have to be discarded. The goal is to reach highest number of products manufactured in the first cycle.

Methods of gathering and processing data

Gathering data used in calculating OEE does not require specialised documentation. In most companies most of the pieces of information are stored: either in some systems, or at the level of specific machines, and it is only needed to collect all of those pieces in one form, so that calculations can be simplified and accelerated.

Reporting of OEE

Proper reporting of OEE indicators is crucial to eliminate losses associated with machinery. Presentation of such data should be done in form of dashboards located in the manufacturing halls, so that operators can have direct access to it. In that way improvements can be processed. Following the information allows to identify OEE trends for each machine and address critical questions:

  • Is there a progress over time?
  • What are the biggest problems causing down times?
  • When did the last incident take place?
  • To which extent the machinery is utilised?
  • How much time does it pass between breakdowns, what is the quantity and frequency of the breakdowns and average reparation time?