Overall Equipment Efficiency

“What are you going to work on in your shop today?”

Busy machines and production lines are good, but even better are busy machines and production lines that are making the right product- and the product right. This is one perspective on OEE- Overall Equipment Efficiency.
What is OEE?
Availability, Performance, and Quality. As a percentage of your equipment’s ideal values, each of these factors plays a role in determining your shop’s OEE. When I looked at OEE for my plant, I found that we were definitely not getting the productivity that our equipment was capable of achieving.  Here are three equations to help you determine your OEE:
Availability in my shop had two components: Running time (time the machines were actually producing product) and Scheduled Time. Availability (A) is the ratio of Running Time to Scheduled Time.


Compare this availability factor to total operating time, and identify the differences- idle time due to operator coffee, smoke, and meal breaks; Setups and changeovers; Breakdowns and mechanical issues; Delays waiting for first piece approval, gaging setups, or crane availability. Once these are identified, prioritize them for improvement. (Some practitioners simplify this to Scheduled time divided by the product of 365 days times 24 hours per day; while this is strictly speaking correct, it typically does not reflect the real world utilization for small contract manufacturing shops like ours.)

Break times affect Availability

Performance is the ratio of the time the machine is actually running and the theoretical time. The difference between theoretical and actual is the time lost due to tool changes, raking out chip bird’s nests, emptying the chips, loading new barstock, or slowing the machine down due to perceived technical issues. Performance is the ratio of Output Achieved divided by the Theoretical Output (TO).


This is often a factor that is more often identified when comparing two shifts or operators on the same process. Also can be affected by changes in tooling or methods from the initial quote. (Sometimes it is easier to figure this using parts produced  (OA) versus Theoretical parts produced using the quoted cycle time (TO))

Process performance affects output…and actual uptime.

Production foremen might think that machining is about making the production numbers, but shops that remain in business know that it is making  parts with the quality needed that keeps the parts shipped and the invoices paid. Quality was simply the ratio of Good Parts (GP) divided by the Total Parts (TP) produced.


These are also a factor in your shop’s OEE.

Overall Equipment Efficiency
OEE is now determined by multiplying A, our availability term; P, our productivity term; and Q, our quality term. What if you are at 90% for each of these terms?

OEE= 0.90 X 0.90 X 0.90 = 0.729 or 73%

What does a 1% improvement in each of these do for you?

 OEE= 0.91 X 0.91 X 0.91 = .754 or 75.4 %

What does 100% Quality (Zero defects) get you with the other two factors at 0.90?

OEE= 0.90 X 0.90 X 1.00 = 0.81 or 81%

So what are you going to work on today in your shop?
Accountant photo: accountant.
Break photo courtesy Wikipedia commons
Reject tag photo courtesy Linton Labels