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What is OEE?

OEE is an “excellent practices” metric for monitoring and improving the performance of your manufacturing techniques (i.e. machines, cells, assembly lines, and many others.).

OEE is easy, realistic and effective. It takes the maximum common sources of manufacturing productivity losses and places them into 3 classes: Availability, overall performance and quality. In doing so, it distils complicated production records into easy understandable metrics that provide a gauge for measuring proper manufacturing efficiency. It also forms the foundation for tools that assist to enhance productivity.

  • Availability it measures productivity losses from downtime (events that stop planned production for a considerable quantity of time).
  • Performance is to measures losses from slow cycles (factors that cause the technique to operate at less than the maximum feasible speed)
  • Quality it measures losses from manufactured components that do not meet quality requirements. Together these 3 factors combine into one OEE rating—a single number that provides a complete measure of producing efficiency and effectiveness.

OEE presents a consistent, verified way to measure the effectiveness of lean manufacturing projects, TPM (total productive maintenance) programs and other productivity projects.

How does it work?

 It is an amazingly easy and powerful solution for improving plant productivity. It is very important tool  that delivers real-time production visibility and performance management for your entire production team. And it’s an indispensable tool for lean manufacturing

World class OEE?

World-Class OEE(Overall for discrete manufacturing plants is generally considered to be 85% or better. Research indicates that the average OEE rating for discrete manufacturing plants is approximately 60%. Actually, there is significant room for improvement in maximum production plants. Imagine what a 40% improvement (increasing OEE from 60% to 85%) in productivity may want to do to your competitiveness and profitability!

OEE factors

We start with Plant operating Time that is the amount of time your facility is open and available for system operation

  1. Plant operating time

From Plant running Time, we subtract planned shut Down, which incorporates all activities that need to be excluded from performance evaluation because there’s no intention of running production (e.g. breaks, scheduled maintenance, intervals where there’s nothing to produce). The remaining time is planned production Time.

  1. planned production time Planned Shut Down
  • Availability:
    Availability takes into consideration Down Time Loss, which includes all events that stop planned manufacturing for an appreciable duration of time (normally several mins). Examples consist of equipment failures, material shortages, and change over time. Changeover time is covered in OEE evaluation because it’s far a form of downtime. While it’s also not possible to eliminate changeover time, in maximum cases it can be decreased (the idea of SMED applications). The remaining time is known as operating Time. Availability is the ratio of running Time to planned production Time.
  1. operating time Down time Loss
  • Performance:
    The performance takes under consideration speed Loss, which includes all elements that cause your process to perform at less than the most possible speed when running. Examples include substandard materials, machine wear mis-feeds, and operator inefficiency. The remaining time is known as net operating Time. Performance is the ratio of net operating Time to the operating Time
  1. Net operating time Speed Loss
  • Quality:
    The quality takes into consideration quality Loss, which elements out produced pieces that do not meet quality requirements, which includes pieces that require rework. The remaining time is known as fully productive Time. The Quality is the ratio of fully productive Time to net operating Time.
  1. Fully productive time Quality Loss
  • OEE (Overall equipment Efficiency):
    OEE (overall equipment Efficiency) takes into account all three factors and is simply the ratio of completely productive Time to planned production Time. In other words, it represents the percentage of manufacturing time spent making good pieces (no quality loss), as fast as possible (no speed loss), without any interruption (no downtime loss).

Calculating OEE


Availability means the ratio of operating Time (which is actually planned production Time less Down Time) to the planned production Time, and accounts for Down Time Loss. Calculation of Availability is = operating Time/planned production Time


Availability means the ratio of operating Time (which is actually planned production Time less Down Time) to the planned production Time, and accounts for Down Time Loss.

The calculation of Availability = operating Time/planned production Time

Ideal Cycle Time is the minimum cycle time that your technique can be expected to acquire under optimal conditions, for a given part. Therefore, when it is increased by means of overall pieces the result is net operating Time. Ideal Cycle Time is sometimes known as design Cycle Time, Theoretical Cycle Time or Nameplate capacity. Because rate is the reciprocal of Cycle Time, performance can also be calculated as

Performance = (Total Pieces/Operating Time)/Ideal Run Rate


Quality is the ratio of fully productive Time (time for good pieces) to net operating Time (time for overall pieces). In practice, The Calculation is

Quality = Good Pieces / Total Pieces


 OEE is the ratio of completely productive Time to planned production Time. In practice the calculation is:

 OEE = Availability x overall performance x quality

 If you substitute within the equations for Availability, performance, and quality, and then reduce them to their simplest terms, the end result is:

OEE = Good Pieces x Ideal Cycle Time/Planned Production Time

that is also a completely correct practice to calculate OEE(Overall equipment efficiency), and with a bit of reflection, you may realize that multiplying good portions by ideal Cycle Time results in completely productive Time (producing most effective good pieces, as fast as possible, without a downtime). it is very important to recognize that improving OEE (Overall equipment efficiency must now not be your sole objective. for example, very few organizations might want to trade a 10% increase in Availability for an 8% decrease in quality, even though this will represent a net improvement in OEE. working thru real-world examples is a great manner to improve your knowledge of OEE calculations.

The Eight  Big Loses

one of the major goals of OEE and TPM programs is to reduce and/or remove what are called the Six big Losses—the most common causes of efficiency loss in production. the following table lists the Six big Losses, and suggests how they relate to OEE Loss categories.

Sr No.



1 Shutdown loss Time lost when production or for planted annual shut down maintenance or periodic servicing
2 Production adjustment loss Time lost when changes in supply and demand require adjustment to production plans
3 Equipment failure loss Time lost when equipment suddenly loses its specified functions
4 Process failure loss Time lost in shut down due to external factors such as changes in chemical or physical properties of materials being processed, operating errors, defective raw materials, etc
5 Normal production loss Rate and time losses at plant startup, shutdown, or changeover
7 Quality defect loss Losses due to producing rejectable product, physical loss of rejected product, financial losses due to product downgrading

Addressing the six big losses

Now that we recognize what the Six big Losses are and some of the activities that make contributions to those losses, we are able to focus on methods to monitor and correct them. For example, it is not only important to know how much Down Time your method is experiencing (and while) but also to attribute lost time to the particular source or cause for the loss (tabulated through cause Codes). With Down Time and cause Code data tabulated, root cause analysis can be applied, starting with the most severe loss categories. Automating your data collection process is an important goal, as it will result in much more timely and accurate information—information that gives managers and operators the ability to react quickly to any problems that arise. It is also important to give your operators goals that provide real-time feedback on how they are doing compared to your established standards.

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