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What is OEE in manufacturing and how is it calculated?
OEE, overall equipment effectiveness, is availability multiplied by performance multiplied by quality. Availability is run time divided by planned production time, performance is actual output divided by ideal output at rated speed, and quality is good units divided by total units.
Example: 90 percent availability, 95 percent performance and 98 percent quality gives 0.90 x 0.95 x 0.98, about 83.8 percent.
It matters because it shows how much of your scheduled time produces good product at full speed, and splits losses into stoppages, slow running and defects.
Commonly misread:
- Comparing OEE between machines or plants that define planned time or ideal speed differently.
- Chasing one number and ignoring which of the three losses is the largest.
- Using inflated ideal speeds, which makes performance look worse than reality.
Fix your definitions first, then compare each line only against its own history.
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