Overall Equipment Effectiveness (OEE)
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Category:  
Strategic

A comprehensive metric that measures the productivity of manufacturing equipment, factoring in availability, performance, and quality.

What it Measures ?

How well our machines are working in terms of time, speed, and output quality.

Relevant StakeHolders 

Maintenance Manager, Quality Head

Why it Matters ?

Tracks efficiency, performance, and quality.

In-depth Use Case / Real-world Example

OEE gives a snapshot of how well manufacturing equipment is performing. It’s calculated as: OEE = Availability × Performance × Quality. For example, a packaging machine might be available 90% of the time, operating at 95% speed, and producing 98% good units. So, OEE = 0.90 × 0.95 × 0.98 = 83.6%. A high OEE means machines are running smoothly, quickly, and with minimal defects. If OEE drops, it signals issues like frequent breakdowns, slow cycles, or high rework rates. In a real-world example, a food processing company might monitor OEE daily to identify underperforming machines and schedule timely maintenance. Tracking this metric helps maximize throughput and reduce waste and downtime.

KPI Definition

Business Value

Movement Direction

Sample Formula

Availability x Performance x Quality

Should Aim For
1
2
3
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