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Overall Equipment Effectiveness

Published on Apr 02, 2024


In today's economy, you're expected to continuously improve your Return on Total Capital. And as capital to build new, more efficient plants becomes more difficult to obtain, you often have to meet growing production demands with current equipment and facilities - while continuing to cut costs.

There are several ways you can optimize your processes to improve profitability. But it can be difficult to understand the overall effectiveness of a complex operation so you can decide where to make improvements. That's especially true when the process involves multiple pieces of equipment that affect each other's effectiveness.

One metric that can help you meet this challenge is Overall Equipment Effectiveness, or OEE. OEE measures the health and reliability of a process relative to the desired operating level. It can show you how well you're utilizing resources, including equipment and labor, to satisfy customers by matching product quality and supply requirements.

Overall Equipment Effectiveness (OEE) measures total performance by relating the availability of a process to its productivity and output quality.

OEE addresses all losses caused by the equipment, including

" Not being available when needed because of breakdowns or set-up and adjustment losses

" Not running at the optimum rate because of reduced speed or idling and minor stoppage losses

" Not producing first-pass A1 quality output because of defects and rework or start-up losses.

OEE was first used by Seiichi Nakajima, the founder of total productive maintenance (TPM), in describing a fundamental measure for tracking production performance. He challenged the complacent view of effectiveness by focusing not simply on keeping equipment running smoothly, but on creating a sense of joint responsibility between operators and maintenance workers to extend and optimize overall equipment performance.

First applied in discrete manufacturing, OEE is now used throughout process, batch, and discrete production plants.


The overall performance of a single piece of equipment or even an entire factory will always be governed by the cumulative impact of the three OEE factors:

Availability, Performance Rate and Quality Rate.

OEE is a percentage derived by multiplication of the three ratios for the factors mentioned above. The OEE percentage is used for analysis and benchmarking.

What is OEE?

OEE = Availability X Performance Rate X Quality Rate

OEE is calculated by multiplying three factors: availability, productivity, and quality.

% OEE = ( % Availability ) * ( % Productivity ) * ( % Quality )

The values used can reflect an entire processing plant, a process line, or an individual piece of equipment.

For individual equipment, the performance of the equipment is compared to earlier values for the same equipment or to similar pieces of equipment. Changes in OEE or its elements are tracked and trended over time. OEE for a process line treats the entire line as a single unit, regardless of how much equipment it includes. For multiple-recipe or batch operations, OEE is calculated for each product produced. Like a process line, a process plant performs as a whole, and OEE is therefore calculated for the entire plant as a unit.


Percent of scheduled production (to measure reliability) or calendar hour's 24/7/365 (to measure equipment utilization), that equipment is available for production

Equipment availability isn't just assumed to be the length of the shift in which it is operated. Instead, it's based on actual operating time, as a percentage of the possible production time.

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