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Explanation of OEE for production people

Learn the basics about OEE, the calculation of OEE and its parts together with the parameters that affect it. Read more about OEE and Proficy OEE here.


What is OEE?


OEE (Overall Equipment Efficiency) is a simple, practical and powerful KPI (Key Performance Indicator) to monitor and improve your performance of your production processes (Machines, cells, lines and plants). It takes into consideration the losses of production and divides them into one of three categories; Availability, Performance and Quality. Availability measures production losses related to downtime, Performance measures the losses related to reduced speed and Quality measures losses due to units that are not released. Together these three KPIs form one KPI that is called OEE, one KPI that gives you a complete picture of the efficiency.

Read more about OEE and Proficy OEE here

OEE – Where to start?


OEE analysis starts with Available time for production, the time that the plant is available for production. Then from that you subtract the time for Planned stops. That includes all events that shall not be part of the analysis since the plant should not run, that can be breaks, lunches, planned maintenance. The time that is left is called Planned production time. OEE starts with planned production time and then subtracts all losses of efficiency and those are then the target of the improvement work. There are three main categories of losses; Downtime losses, Performance losses and finally Quality losses.


Availability deals with all types of downtime losses, which includes all events that stops the planned production for some period of time. That can be malfunctioned equipment, lack of material or change overs of either product or shift.

Change over time is included in the OEE calculation since it is considered a loss of production and even if it is impossible if many cases to take it away completely is it in most cases possible to reduce significantly. The time left is called Production time.


Performance deals with losses related to reduced production speed. That can be different depending on the product produced and may vary over time and route in the plant.

Examples of causes to this can be bad raw material, operator inefficiency or old machines. The time that remains is called Net Production time.


Quality relates to the losses depending on the units produced passes and is released from production. Also products that are reworked or downgraded should be considered quality losses.

The time left is called Fully Productive Time, and our goal is to maximize this time.

Calculation of OEE and examples

OEE calculations are based on three factors: Availability, Performance and Quality. Below you can see how they are calculated.

Availability = Uptime / Planned production time

Performance = Ideal cycle time / Real cycle time or

Performance = Real manufacturing speed / Ideal manufacturing speed

Quality = Approved units / Total amount of units

OEE combines all the above factors into one KPI like below:

OEE = Availability x Performance x Quality

It is very important to see that an improved OEE is not the only target. Look at the following example with the two shifts and their respective data. On the surface it look like the second shifts better than the first, that since their OEE is better. But few companies should trade a 5% increase in availability for a 3,5% reduction in quality! OEE is not a magical formula for success, it gives you four different ways to look at the production. The total OEE value is though the best way to monitor the current statues compared with the planned.

OEE calculation example

The tables to the left contains an example with some data from a shift that have been used to calculate an OEE value. Do the same as above to calculate the three parameters and then last calculate the total OEE number. Note: Use the same time unit in all calculations.


Master class OEE

Like described above is OEE calculated as the product of three factors;
The calculations shows that OEE is a not always easy. For example, if all the contributing factors is 90% will the OEE be no more than 72,9%. By study many types of industries it has been shown that many have an OEE number below 60%. In practice is the different contributing factors quite different as shown in the table below. Or course is every plant unique, for example if your plant have a 6 Sigma QA program are you most likely not satisfied with the quality KPI on 99.9 % but wants to have at least 99,99966 %. Studies shows all over the world the usual OEE number is not more than 60%. As you can see below is Master Class OEE considered above 85%. 

Availability      90,0%
Performance   95,0%
Quality              99,9%
Total OEE          85,0%



Brochure - A Quick guide to OEE

A quick guide for people on the go. OEE helps reduce complex problems to simple and transparent information.

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