Key takeaways
OEE (overall equipment effectiveness) is a manufacturing metric that shows how effectively a machine or line uses the time it was scheduled to produce.
It combines three kinds of loss into one percentage: stops, slow running and defects.
An OEE of 70% means that 70% of planned production time was fully productive. The other 30% was lost somewhere.
Imagine a machine is scheduled to produce for one hour. OEE asks three simple questions about that hour. To turn the metric into a program, see the 90-day OEE improvement program for plant managers.
Multiply the three answers and you get OEE.
Answering those three questions by hand means calculating OEE after the shift. OEE software such as Fabrico, a cloud-based MES and OEE platform, answers them from machine data while the shift is still running, recording each stop and its duration and showing OEE by line and shift.
| Word | Meaning in OEE |
|---|---|
| Overall | It combines all three loss types in one number |
| Equipment | It is measured on a machine, a line or a work cell |
| Effectiveness | It measures how much good output the equipment delivered against what it could have delivered |
You will sometimes see it written as overall equipment efficiency. The accepted term is effectiveness, because OEE counts stops and defects as well as speed.
OEE = Availability × Performance × Quality
For example, a machine with 90% availability, 95% performance and 98% quality has an OEE of 0.90 × 0.95 × 0.98 = 83.8%.
Each factor only applies to what the one before it left over.
Performance only counts the time the machine was running. Quality only counts the parts it actually made.
That is why OEE can never be higher than its weakest factor, and why one weak factor holds the whole score down.
For every formula and a full worked example, see our OEE calculation guide.
OEE comes from Total Productive Maintenance (TPM), the improvement system associated with Seiichi Nakajima and the Japan Institute of Plant Maintenance.
In TPM, OEE is the measure of how well equipment is used, and the six big losses explain where the rest of the time goes.
OEE is also one of the manufacturing operations KPIs described in the international standard ISO 22400.
| Term | Meaning |
|---|---|
| Planned production time | The time a machine is scheduled to produce, after breaks and other time with no production planned are removed |
| Run time | Planned production time minus breakdowns, changeovers and other longer stops |
| Ideal cycle time | The fastest time the machine can make one part under optimal conditions |
| Availability | Run time ÷ planned production time |
| Performance | Actual output compared with output at the ideal cycle time |
| Quality | Good parts ÷ total parts |
| Micro stop | A very short stop, usually counted as a performance loss |
| Six big losses | Failures, setups, minor stops, reduced speed, startup rejects, production rejects |
| TEEP | OEE measured against all calendar time instead of planned time |
OEE is often confused with other metrics. Here is how to tell them apart.
| Metric | How it differs from OEE |
|---|---|
| Efficiency | Usually compares output with a standard rate, without counting stops or defects |
| Utilization | Shows how much of the available time was used, not how well it was used |
| Productivity | Compares output with an input such as labor hours or cost |
| Uptime | Covers stops only, like availability, but ignores speed and quality |
OEE is also not a people metric. Using it to rate operators tends to produce better-looking numbers, not better machines.
For a deeper comparison, read production efficiency and OEE vs utilization.
For a maintenance team, OEE shows how much equipment problems cost the production schedule.
That is why OEE and reliability metrics such as MTBF and MTTR work best side by side.
OEE shows the size of the loss. MTBF and MTTR show whether the problem is how often machines fail or how long repairs take.
For benchmarks, 85% is the widely quoted world-class figure, and most manufacturers score closer to 60%. For typical figures by sector, read OEE benchmarks by industry.
See world-class OEE and the complete OEE guide for the full picture.
OEE monitoring means measuring OEE continuously, usually from machine data, instead of calculating it by hand after the shift.
Data can come from the machine's PLC, from retrofit sensors or from cameras. The team can then react during the shift, while the loss is still happening.
Our guide to OEE monitoring explains how it works.
Fabrico is an MES and OEE platform with maintenance (CMMS) built in.
It measures OEE in real time from PLCs, IoT sensors and AI cameras, detects micro stops, and shows downtime, MTTR and MTBF by machine.
When a loss needs fixing, the team can raise a work order or add a task to a preventive maintenance plan in the same platform.
See what your OEE really is: book a demo.
OEE stands for overall equipment effectiveness. It is sometimes written as overall equipment efficiency, but effectiveness is the standard term.
It is the share of scheduled machine time that produced good parts at full speed.
If a machine has 75% OEE, a quarter of its planned time was lost to stops, slow running or defects.
Yes. OEE is one of the most widely used manufacturing KPIs, and it is included among the KPIs described in ISO 22400.
Efficiency usually compares output with a standard rate. OEE also accounts for stops and defects.
A machine can look efficient while running and still have a low OEE because it stopped often.
It means the machine made only good parts, at its ideal speed, with no stops during planned production time.
In practice, 100% is a theoretical ceiling, not a target.
It shows how much extra good output your existing equipment could deliver.
It also splits one vague problem into three specific ones: stops, speed and quality.
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