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Innovative Thinking

How to Adopt OEE More Effectively

Posted on May 25, 2016 by Peter Dorsey

OEE Calculation for Manufacturing Efficiency

OEE (Overall Equipment Effectiveness) is used on a global scale to help manufacturing companies improve production and reduce losses. OEE is a measure of how effectively your equipment is being used in your production line. It is not a measure of your plant as a whole, but rather a measure of each machine that is a part of the process.

The goal of OEE is to isolate parts of your production process that can be improved. OEE is best adopted as a measurement tool to help you identify and track the progress of changes in your line. If OEE calculation is about using your equipment effectively, how can you use OEE itself to the best effect?

To begin with, OEE uses logical equations to assign percentages to machines along your production line. These numbers themselves are not what are important in the process of improvement. 10% or 100% are not true indicators of how well a machine is doing because these are defined by you. Instead, we need to look into the equation for OEE calculations and look at what can be improved, if anything. Obviously, if a machine gets a significantly lower percentage than the rest of your line, this is where to begin.

The OEE equation is: Availability rate * Performance rate * Quality rate 


This leads to three more equations for each rate:

  • Availability Rate = Available Time (total working time - start up and shutdown time) / Scheduled Working Time
  • Performance Rate = Actual Output (running speed) / Standard Expected Output (maximum effective speed)
  • Quality Rate = Customer Usable Produce / Total Output Product


OEE can be broken down by its 3 parts: Availability, Performance, Quality.

Availability is the machines maximum running time in a work day.

  • A work day is defined as the Scheduled Working Time in the above equation
  • Available Time is the scheduled working time less the startup and shutdown times of the machine.
    • Shutdown time includes turning off the machine at the end of the day as well as any maintenance (scheduled or unscheduled) that takes away from the Scheduled Working Time

Performance is the machines speed, based on what is the maximum effective speed at which work can be done well. This means that a machine may be able to go at a faster speed than it currently is, but if it outputs less usable final products it may not be the best speed.

Quality is how much of your end product can go to customers.

  • This subtracts off losses due to scraps and repairs aka. unusable final product
    • If a product can be repaired or reproduced through the machine this only needs to be counted once, and does not need to be subtracted from availability or performance when it is run through the machine again

Stay tuned for How to Adopt OEE More Effectively: Part II to learn about the six major contributing losses that will reduce your OEE metrics greatly if not addressed.

Getting Started with OEE

In the meantime, an experienced System Integrator can help you appraise your plant's productivity and find automation solutions for your unique applications. Premier Automation was ranked #19 nationally as a System Integrator Giant on a list of the most innovative system integrators in the United States.

Our engineering team works to create a fully integrated automation environment for our customers to ensure better reliability, higher quality, and total production visibility. If you're seeking a partner for your next automation or controls project, contact one of our experienced engineers to schedule a free on-site visit:

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