What is OEE? How to calculate OEE of your Plant?


Overall Equipment Effectiveness (OEE) is one of the important parameters that define the productivity and performance of your manufacturing plant. Every manufacturing plant has its OEE which is calculated on the basis of the three major factors Availability, Performance, and Quality. OEE calculates your plant’s Availability, i.e. its uptime, its Performance, and Quality of production.

Overall Equipment Effectiveness (OEE) is a useful metrics for machine process improvement. It analyzes the performance of your machines and equipment against its theoretical maximum capacity. It applies only to the periods when your machines are planned to operate and identifies the time when your plant is truly productive. It is measured in percentages and gives a clear view of your plant’s health.


OEE helps you know:

  • Machine Availability: If the machine is available for 24×7 and if it is facing the downtime
  • Machine Production Quality: If the machine is facing any sort of quality rejection, defects, etc.
  • Machine Speed: If the machines are running at the optimum speed as required
  • Machine Run time: If the machine starts on time daily


OEE standardizes the machine operations, enhances the effectiveness of machines, and improves the longevity of the plant.

When it comes to productivity improvement techniques, three important methodologies help in achieving the maximum throughput of a plant. They are Lean manufacturing, Six Sigma, and Theory of Constraints. And, OEE is a lean manufacturing tool that follows a holistic approach to bring an overall improvement in the plant performance.


How to calculate OEE of your plant?


OEE, machine monitoring factor of your plant can be calculated based on the following three factors.

  • Availability: It is measured as the ratio of Operating Time to Planned Production Time. It takes into account all the unplanned stops that hinder the plant run time. It also measures the planned stops which occur due to machine changeover. It identifies the machine Availability Loss.


Availability = Operating Time / Planned Production Time

Wherein, Operating Time= Planned Production Time- Downtime



It indicates breakdowns and downtime of your machines.

  • Performance: It is a ratio of Net Operating Time to Operating Time and takes into account the Speed Loss of the plant. It measures Performance Loss that includes various factors that limit the production to take place in full capacity when in running mode (time-consuming cycles and small stops).


Performance = Net Operating Time/ Operating Time


Wherein, Net Operating Time is the fastest possible time to produce one piece of the production batch, and it is calculated as:


Net Operating Time= Ideal Operating Time x Total Count

For example: If your Ideal Operating Time is 1 minute, the total count is 200, and Operating Time is 300 minutes, then the performance will be:


Performance= 1x 200/ 350= 66.6%

It is accountable to identify the speed loss of your machines.

  • Quality: It is the ratio of Fully Productive Time to Net Operating Time. It calculates Quality Loss and identifies materials that fail quality checks including the ones that require rework.


Quality= Fully Productive Time/ Net Operating Time

Its magnitude is measured by quality defects of your machines.


Calculating OEE machine monitoring metrics

OEE gathers all the losses which include machine downtime, speed loss, and quality loss, and, calculates the truly productive manufacturing time of your plant.

OEE= Availability x Performance x Quality


What does the OEE score mean? What is considered as the perfect OEE score?

A 100% OEE is the ideal score for a manufacturing plant. This means that the plant is running at full capacity with no downtime and zero wastage. A score of 80-85% OEE is a ‘world-class’ number for discrete manufacturing whereas, a score less than that is unfavorable for the plant manufacturers. The plant with a score of 40-45% OEE is considered as underperforming and needs machine process improvements. It is a low score and can be improved by addressing the speed loss, quality loss, and stop time loss of the plant.


OEE is a great lean manufacturing tool that gives a clear view of your plant’s health. The formula mentioned above will help you calculate the accurate OEE of your plant. Based on the score, you can conduct the below-mentioned analysis.


  • Use the Theory of Constraint and perform breakdown and downtime analysis
  • Do outside and inside machine analysis
  • Identify steps for improvements; establish conditional and quality monitoring parameters


In case you find it challenging to perform the analysis mentioned above, you can seek help from a Business Process Management Consulting firm. With their experience and expertise, the firm can improve your OEE score to the ‘world-class’ level and above. In case you need some assistance calculating your plant’s OEE, leave a comment below.