Overall Equipment Effectiveness (OEE)

Our OMS manufacturing software provides companies the business intelligence necessary to stay competitive in today’s global economy. By monitoring the production process, manufacturers can identify key areas that need improvement and make the necessary changes. Thus, OMS will help you increase productivity during ramp-ups and ramp-downs, reduce downtime and inefficiencies, optimize your production process, and improve your OEE.

What is OEE?

Overall Equipment Effectiveness (OEE) is a standard term used in manufacturing operations.  OEE measures how well the equipment in a manufacturing plant is being utilized, as compared to its full potential.  Companies that are considered “best in class,” are those which operate at 85% of their potential or better. However, most companies’ OEE is far below that mark, averaging about 60%.

OEE table that displays the production lost due to downtime, performance and quality.

The three main components to calculate OEE are: Availability, Performance and Quality.

The Availability Rate in OEE is calculated by dividing the amount of time a machine operates by the planned production time. For example, if a company operates 8 hours per day (480 minutes), but experiences 40 minutes of unplanned downtime, then its availability rate is 440/480 =  91.67%. In other words, the equipment is in only operating 91.67% of its scheduled time.

The Performance Rate in OEE can be calculated in two different ways, depending on whether performance is measured using Ideal Cycle Time or Ideal Run Rate.

For manufacturers who use ideal cycle time, the performance rate is calculated as follows:

Performance Rate =

For manufacturers who use ideal run rate, the performance rate is calculated as follows:

Performance Rate =

The main purpose of the Performance Rate is to measure how fast the equipment is operating, as compared to its potential.

Finally, the Quality Rate in OEE is calculated by dividing the number of pieces that meet the quality standard by the total number of units produced. For example, if a company produced 100 pieces, of which only 90 are usable, then the quality rate is 90%.

INTEG Process Group has developed a FREE excel based OEE calculator to help manufacturers better assess their operating performance.  The OEE calculator can also help you see how small changes in your OEE can dramatically affect your bottom line.

To download our FREE excel based OEE calculator please fill out the following information.