What is Overall Equipment Efficiency (OEE)?

OEE (Overall Machine Effectiveness) is a gold standard in measuring manufacturing productivity. It is a simple way to determine the percentage of time spent manufacturing that is actually productive. A score of 100% indicates that you are producing only Good Parts as quickly as possible with no stop time. Overall Equipment Efficiency means that you are manufacturing only Good Parts, as fast as possible and with no Stop Time.

Measuring OEE can be a good manufacturing practice. You can gain valuable insights into how to improve the manufacturing process by measuring OEE. OEE is a great way to identify losses, benchmark progress, and improve the productivity of manufacturing machinery (i.e. eliminating waste).

OEE Benchmarks

What is a good OEE score as a standard? What is an OEE score of world-class?

  • A 100% OEE production is perfect: only manufacturing good parts as quickly as possible with no stopping time.
  • For discrete manufacturers, 85% OEE can be considered world-class. It is a long-term objective for many companies.
  • The average OEE for discrete manufacturers is 60%, but there is still considerable room for improvement.
  • For manufacturing companies who are just beginning to track their manufacturing performance, 40% OEE isn’t uncommon. This is a very low score that can usually be improved by simple measures.

How to Measure Manufacturing Productivity Using the Overall Equipment Effectiveness (OEE).

The overall equipment effectiveness is an important figure. OEE provides a great deal of information with just one number. There are many ways to use it as a measure of manufacturing productivity. It can be used to maximize production when calculated and interpreted correctly. The benchmark for comparing productions is the overall equipment effectiveness. This can be used to compare productions to industry standards, internal equipment, or to other shifts using the same equipment. The following are the standard OEE benchmarks:

  • A score of 100% is considered perfect production. This means you are only producing quality parts as fast as possible without any downtime.
  • A score of 85 percent is considered to be world-class by discrete manufacturers, and a long-term target.
  • A score of 60 percent is common for discrete manufacturers and indicates that there is still considerable room for improvement.
  • A score of OEE 40 percent may be considered low, but it is not unusual for manufacturers who are just beginning to monitor and improve performance. Most of the time, a score that is low can be easily improved by using simple measures.

Overall Equipment Effectiveness can be a powerful tool not only for managers but also have a major impact on the employees who work in the plant. Plant floor metrics include:

  • Target – A real-time production target
  • Actual — The actual production count
  • Efficiency– The ratio between target and actual production; the percentage of the amount of time the production is ahead or behind schedule.
  • Downtime This includes all stoppages that are not planned for each shift. It is updated in real-time.