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How to Make an OEE Calculation

Updated on July 11, 2015
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I am a trainer and consultant in lean manufacturing, Six Sigma, quality management, and business management.

How to calculate OEE

How do you make your OEE Calculation?

Overall Equipment Effectiveness is an important process performance measurement which has come out of TPM (total productive Maintenance.) This hub will show you step by step how to calculate your OEE and its component measures.

OEE is a composite of three measures of your machine or processes’ ability to produce product to specification reliably and repeatedly. These measures are Availability, Performance and Quality.

These measures are based on the six big loses of TPM and are;

  • Availability; Breakdowns and Changeovers
  • Performance; Minor Stoppages and Reduced Speed
  • Quality; Defects and Setup Scrap

To calculate OEE you must first accurately measure each of these individual measures of performance. These measurements should always be made by those closest to the process. They are the ones that can directly measure what is going on and will also be the ones able to identify why you have issues.

Only be measuring the performance of your machines and equipment can you know for sure if any improvements that you have made have had a positive impact.

Example of OEE Calculation

OEE Calculation
OEE Calculation | Source

OEE Availability Calculation

Availability is a percentage measure of time actually available for the process against the total time available during the shift if there were no breakdowns or lost time due to changeovers.All measurements should be made in minutes.

The operators should record downtime for all breakdowns (usually defined as any stoppage of greater than 10 minutes.) Breakdowns are any unplanned stoppage of the machine for any reason which could cover anything from power interruptions to a vital part breaking. We do not include minor stoppages of less than 10 minutes such as changing a tool in this category.

Changeover or setup time is the time taken from finishing the last part of one batch and producing the first good part of the next batch. Always use the same definition for all of your calculations so that everyone knows precisely what needs to be measured.

The calculation for Availability then becomes;

How to Calculate Availability for OEE
How to Calculate Availability for OEE | Source

This then gives you a percentage performance figure for your availability which could then be plotted graphically and displayed at the workplace. The individual measure of availability is as important as the overall equipment efficiency measure itself and the individual measure itself should also be displayed as well as graphs of both breakdown time and changeover times.

OEE Performance Calculation

Your performance calculation for OEE is based around an expected number of products for a given time against the actual produced. This measure shows the effect of minor stoppages such as tool changes and slow working on your production rate.

The calculation for performance is;

How to Calculate OEE Performance
How to Calculate OEE Performance | Source

The available time coming from the first calculation for availability and your production rate being your average expected production rate in parts per minute.

As with your availability your performance measure should be displayed at the workplace and should be a focus for your teams improvement in its own right; not just the OEE.

OEE Quality Calculation

The OEE Calculation for quality is a simple ratio of good parts produced against the total number of parts produced (Good and bad.) The defect parts will come from both setup scrap and also your defects whilst running.

The calculation for your OEE quality component is;

How to Calculate OEE Quality
How to Calculate OEE Quality | Source

This will give you a simple ratio of good parts to total parts produced.

This calculation again should be displayed and be a focus for the action of your improvement teams. Your team should work to improve this ratio continuously; not just to improve the OEE but to also reduce the waste due to reject components as well as reducing the risk of defects reaching the customer.

Your OEE Calculation

The overall OEE measure for your process is then the above three measures for Availability, Performance and Quality multiplied together to give your OEE. Note that multiplying OEE measures for multiple machines and processes is a meaningless figure and should not be used. OEE should be for a single machine or process.

How to Calculate your OEE
How to Calculate your OEE | Source

OEE Example

The following shows step by step examples of how to calculate your OEE;

Calculating OEE Availability; Example

So if your shift is 8 hours long (8 x 60 minutes) and you experience 40 minutes of changeover time and 20 minutes of breakdowns;

Calculating your OEE Availability
Calculating your OEE Availability | Source

Calculating your OEE Performance; Example

If during your available 420 minutes of production you produced 800 parts and your production rate is 2 per minute your calculation for performance would be;

OEE Performance Calculation Example
OEE Performance Calculation Example | Source

Calculating your OEE Quality; Example

If your 800 parts produced consisted of 750 good parts, 30 parts defective and 20 parts of setup scrap then you OEE quality calculation would be;

Calculating your OEE Quality
Calculating your OEE Quality | Source

Calculating your Overall OEE; Example

Using the figures calculated in the examples above your overall OEE will be;

Example of OEE Calculation
Example of OEE Calculation | Source

Total Productive Maintenance

OEE is a vital part of any Total Productive Maintenance (TPM) implementation. Follow this link to find out more about TPM.

OEE Calculation Video

What is World Class OEE

Many people ask what is a good OEE, well my answer is one that has improved on last week’s OEE!

World class OEE is usually accepted as being over 85%, being made up with the following three percentages;

  • Availability 90% +
  • Performance 95% +
  • Quality 99.9% +

Obviously this is a very rough guide and every industry is different.

OEE is a measure to help you to continually improve your machines ability to meet your requirements (and your customers.) Applied in areas of scarce resource and at bottlenecks you can focus your efforts to ensure that you meet customer demand.

There is little need to work on areas where you have excessive capacity at the expense of those more important areas, focus your OEE efforts where you really need them not across every machine and process in your organization.

If you can save 10 minutes at a bottle neck operation then you may effectively save 10 minutes at every stage in your process. That 10 minutes of extra production will be 10 minutes less waiting at the next operation. So always focus your efforts on the bottle neck operations or those that are critical to your operation. Don't forget that as you improve one bottle neck you may uncover another elsewhere in the operation.

The problem with using a bench mark figure to see how you are performing is that you may be lulled into stopping making improvements. Just remember that your competitors will never stand still; you must ensure that you continually improve your processes to increase that OEE. But be sensible; if it is going to cost a fortune to make a 1% improvement and you already have a performance that satisfies your customers do you really need to spend the money?

Continually Improve OEE

Problem solving tools
Problem solving tools | Source
Plan your improvement of OEE
Plan your improvement of OEE | Source

Using OEE for improvement

Overall equipment effectiveness should not be just "measured"! Too many companies spend all of their time collecting and displaying data and minimal effort on actually improving their KPIs (Key performance Indicators). Unless you actually take the time to make improvements to your process there is no point at all in making the measurements and yet this is precisely what many companies do.

The individual components are all areas of your OEE where your improvement team needs to focus. They should use problem solving tools, PDCA, Kaizen or any other technique to investigate methods to increase availability, performance and quality.

You should also not try to measure and improve the OEE on every machine at the same time, look for the bottle neck within your operations and make your improvements there as your bottleneck is the point that controls every operation in your factory. So focus your energy to improve OEE at this point.

Calculating OEE


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    • LeanMan profile image

      Tony 6 years ago from At the Gemba

      Thanks for reading and leaving comments billabongbob, I have lost count over the years of the number of people that could not calculate their OEE even though they were running TPM and so on.. Most of them were just throwing numbers into a spreadsheet or a piece of software and had no understanding of the OEE calculation itself.

      I have always found that people understand these ideas better if they have to do the calculations themselves and they are not difficult to do as you have said.

    • billabongbob profile image

      billabongbob 6 years ago from South Wales, UK

      Great technical information, easy to understand, even for a maths numpty like me. Good, clear instructions and explanations.