OEE – Definition and calculation

In manufacturing, it's not enough for machines to just run, they need to produce the right quantity, at the right speed and with the right quality. OEE is a globally recognized metric for measuring and analyzing this, with a high value being a clear indicator that you are operating at full capacity. Here we explain the concepts, the formulas and how a maintenance system can help you achieve a high OEE value.

What is OEE?

OEE stands for Overall Equipment Effectiveness and is a formula for measuring production efficiency. 

In simple terms, OEE identifies the percentage of production time that is truly productive. A value of 100% means production without stops, at maximum speed and without rejects, a dream state that often exists only in theory.

Important in the manufacturing industry

Without measuring efficiency in manufacturing, it is difficult to know whether a loss of production is due to a machine standing still (technical failure), running too slowly (performance) or producing defective goods (quality). OEE helps businesses break down losses so that it becomes clear where maintenance and improvement efforts will do the most good.

Calculating OEE

To get an accurate analysis and OEE value, you need to multiply the three factors by each other.

Formula: OEE = Availability × Facility Utilization × Quality

Remember that even if the sub-values look good individually (e.g. 90% on all three), the total will be lower (0.9 × 0.9 × 0.9 = 72.9%).

Availability

This factor deals with stopping losses and answers the question: "When we had planned to run, how much of the time did the machine spin?". Availability is affected by anything that stops production during the scheduled time. This looks at two main categories of losses:

• Machine failures: unplanned stops such as breakdowns, technical faults or emergency maintenance.

• Set-up and adjustment time: Planned stops that take longer, such as tool changes, material shortages or start-up problems. A low value here is often a clear indication that preventive maintenance needs to be prioritized.

Plant utilization

Speed losses are measured here. Even if the machine is running, is it producing as fast as it should? This value compares the actual speed against the maximum theoretical speed. Plant utilization is often lowered by factors that are difficult to see with the naked eye:

• Small stops: Short interruptions (often less than 5 minutes) where the machine stops and starts again, for example in case of misfeed or blockage.

• Reduced speed: When the machine runs slower than the design speed, perhaps due to wear, operator choice or quality issues. This is often referred to as the 'hidden factory' because you think you are producing at full speed, even though you are losing volume every minute.

Quality

The last factor deals with quality losses and focuses on the products coming out of the process. It is not enough to produce quickly if the products are not saleable. Here, anything that is not right from the start is deducted:

• Scrap: products that need to be thrown away.

• Rework: products that need to be fixed in order to be approved. Note that rework also counts as a loss in the OEE calculation, as it required extra time and resources to reach the final result. A low quality value often indicates problems in process control.

Industry standards

What exactly is a good number? It's easy to get caught up in the number, but remember that context matters. The most important thing is not to compare yourself to other industries, but to measure your own progress over time.

• 100%: Perfect production (Theoretical maximum).

• 85%: Often considered "World Class Manufacturing" for discrete manufacturing.

• 60%: Is a fairly typical average for many industries that have not actively worked with LEAN or TPM (Total Productive Maintenance).

Benefits of measuring OEE value

Implementing OEE measurement provides several strategic benefits:

• Data-driven decisions: stop guessing why you are not meeting production targets. The numbers show in black and white whether the problem is technical maintenance or process-related.

• Increased ROI on machinery: By making better use of existing equipment, you can often increase volume without having to invest in new, expensive machines.

• Better maintenance planning: A low "Availability" value is often a direct signal to the maintenance department to review the preventive maintenance strategy.

Improve efficiency with the help of OEE

Calculating these values manually in Excel is possible, but rarely sustainable in the long run. To act quickly, you need real-time data. With an OEE system, you can automate data collection and give operators and management a shared view of the current situation. This is where the link to a modern CMMS like Mainter becomes critical. If your OEE analysis shows that machine downtime (low availability) is your biggest loss, Mainter helps you with a structured work order system and ensures that maintenance is done on time. In this way, insights from your ceiling values are transformed into concrete action on the shop floor.

Want to know how you can increase machine availability? Book a demo and we'll show you how Mainter supports effective improvement work.