Overall equipment effectiveness
Overall equipment effectiveness (OEE) is a hierarchy of metrics which focus on how effectively a manufacturing operation is utilized. The results are stated in a generic form which allows comparison between manufacturing units in differing industries.
OEE can be best illustrated by a brief discussion of the six metrics that comprise the system. The hierarchy consists of two top-level measures and four underlying measures.
The two top-level metrics
Overall equipment effectiveness (OEE) and total effective equipment performance (TEEP) are two closely related measurements that report the overall utilization of facilities, time and material for manufacturing operations. These top view metrics directly indicate the gap between actual and ideal performance.
- Overall equipment effectiveness quantifies how well a manufacturing unit performs relative to its designed capacity, during the periods when it is scheduled to run.
- Total effective equipment performance (TEEP) measures OEE effectiveness against calendar hours, i.e.: 24 hours per day, 365 days per year.
 The four underlying metrics
In addition to the above measures, there are four underlying metrics that provide understanding as to why and where the OEE and TEEP performance gaps exist.
The measurements are described below:
- Loading: The portion of the TEEP Metric that represents the percentage of total calendar time that is actually scheduled for operation.
- Availability: The portion of the OEE Metric represents the percentage of scheduled time that the operation is available to operate. Often referred to as Uptime.
- Performance: The portion of the OEE Metric represents the speed at which the Work Center runs as a percentage of its designed speed.
- Quality: The portion of the OEE Metric represents the Good Units produced as a percentage of the Total Units Started. Commonly referred to as First Pass Yield.
 Calculations for OEE and TEEP
What follows is a detailed presentation of each of the six OEE / TEEP Metrics and examples of how to perform calculations. The calculations are not particularly complicated, but care must be taken as to standards that are used as the basis. Additionally, these calculations are valid at the work center or part number level but become more complicated if rolling up to aggregate levels.
 Overall equipment effectiveness
OEE breaks the performance of a manufacturing unit into three separate but measurable components: Availability, Performance, and Quality. Each component points to an aspect of the process that can be targeted for improvement. OEE may be applied to any individual Work Center, or rolled up to Department or Plant levels. This tool also allows for drilling down for very specific analysis, such as a particular Part Number, Shift, or any of several other parameters. It is unlikely that any manufacturing process can run at 100% OEE. Many manufacturers benchmark their industry to set a challenging target, 85% is not uncommon.
Calculation: OEE = Availability x Performance x Quality
A given Work Center experiences…
Availability of 86.7%
The Work Center Performance is 93.0%.
Work Center Quality is 95.0%.
OEE = 86.7% Availability x 93.0% Performance x 95.0% Quality = 76.6%
 Total effective equipment performance
Where OEE measures effectiveness based on scheduled hours, TEEP measures effectiveness against calendar hours, i.e.: 24 hours per day, 365 days per year.
TEEP, therefore, reports the ‘bottom line’ utilization of assets.
Calculation: TEEP = Loading x OEE
A given Work Center experiences…
OEE of 34.0%
Work Center Loading is 71.4%
TEEP = 71.4% Loading x 34.0% OEE = 24.3%
Stated another way, TEEP adds a fourth metric ‘Loading’, Therefore TEEP = Loading x Availability x Performance x Quality
The Loading portion of the TEEP Metric represents the percentage of time that an operation is scheduled to operate compared to the total Calendar Time that is available. The Loading Metric is a pure measurement of Schedule Effectiveness and is designed to exclude the effects how well that operation may perform.
Calculation: Loading = Scheduled Time / Calendar Time
A given Work Center is scheduled to run 5 Days per Week, 24 Hours per Day.
For a given week, the Total Calendar Time is 7 Days at 24 Hours.
Loading = (5 days x 24 hours) / (7 days x 24 hours) = 71.4%
The Availability portion of the OEE Metric represents the percentage of scheduled time that the operation is available to operate. The Availability Metric is a pure measurement of Uptime that is designed to exclude the effects of Quality, Performance, and Scheduled Downtime Events.
Calculation: Availability = Available Time / Scheduled Time
A given Work Center is scheduled to run for an 8 hour (480 minute) shift.
The normal shift includes a scheduled 30 minute break when the Work Center is expected to be down.
The Work Center experiences 60 minutes of unscheduled downtime.
Scheduled Time = 480 min – 30 min break = 450 Min
Available Time = 450 min Scheduled – 60 min Unscheduled Downtime = 390 Min
Availability = 390 Avail Min / 450 Scheduled Min = 86.7%
The Performance portion of the OEE Metric represents the speed at which the Work Center runs as a percentage of its designed speed. The Performance Metric is a pure measurement of speed that is designed to exclude the effects of Quality and Availability.
Calculation: Performance = (Parts Produced * Ideal Cycle Time) / Available Time
A given Work Center is scheduled to run for an 8 hour (480 minute) shift with a 30 minute scheduled break.
Available Time = 450 Min Sched – 60 Min Unsched Downtime = 390 Minutes
The Standard Rate for the part being produced is 40 Units/Hour or 1.5 Minutes/Unit
The Work Center produces 242 Total Units during the shift. Note: The basis is Total Units, not Good Units. The Performance metric does not penalize for Quality.
Time to Produce Parts = 242 Units * 1.5 Minutes/Unit = 363 Minutes
Performance = 363 Minutes / 390 Minutes = 93.0%
The Quality portion of the OEE Metric represents the Good Units produced as a percentage of the Total Units Started. The Quality Metric is a pure measurement of Process Yield that is designed to exclude the effects of Availability and Performance.
Calculation: Quality = Good Units / Units Started
A given Work Center produces 230 Good Units during a shift.
242 Units were started in order to produce the 230 Good Units.
Quality = 230 Good Units / 242 Units Started = 95.0%
 Further reading
- Productivity Press Development Team (1999), “OEE for Operators: Overall Equipment Effectiveness”, Productivity Press, ISBN 978-1-56327-221-9
- Hansen, Robert C (2005), Overall Equipment Effectiveness (OEE), Industrial Press, ISBN (978-0-8311-)3237-8