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OEE explained: availability, performance and quality

How Overall Equipment Effectiveness is calculated, with a worked example, the classic loss categories, and why explaining losses matters more than the percentage.

Published · Updated · 5 min read

The calculation

Availability is run time divided by planned production time. Performance is ideal cycle time multiplied by total count, divided by run time. Quality is good count divided by total count. OEE is their product.

A worked example

A machine has 480 minutes of planned production time and runs for 420 minutes: availability = 87.5%. The ideal cycle time is 1.0 minute and it produces 380 parts in those 420 minutes: performance = 380 / 420 = 90.5%. Of the 380 parts, 361 are good: quality = 95%.

OEE = 0.875 × 0.905 × 0.95 ≈ 75.2%.

The classic losses

Lean and TPM practice groups losses into categories. The commonly cited ‘six big losses’ are:

  • Equipment failures and breakdowns (availability)
  • Setup and adjustments (availability)
  • Small stops and idling (performance)
  • Reduced speed (performance)
  • Startup rejects (quality)
  • Production rejects (quality)

Why the number is not enough

OEE shows that time or output is lost, not why. Typical loss categories in practice also include waiting, tool changes, cycle-time losses, rework, inspection delay and process instability.

The practical goal is to attribute the biggest losses to causes so improvement work starts from evidence rather than from a search through dashboards. That is what Qynetic's OEE module is designed to do.

Pitfalls

OEE comparisons between plants are only meaningful if planned production time, ideal cycle time and the treatment of changeovers are defined the same way. Define them explicitly and keep them stable.

Standards and further reading

  • ISO 22400-2 — Key performance indicators for manufacturing operations management
  • Nakajima, S., Introduction to TPM (the six big losses)

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