OEE: Calculation & Analysis

Definition

Calculation

Application & Analysis

FAQ

Calculation

How is OEE calculated?

To calculate OEE, the values of the three factors Availability, Performance and Quality are multiplied together.

The formula is therefore:

OEE (%) = Availability x Performance x Quality

Both OEE and its individual factors are expressed as percentages ranging from 0% to 100%.

The following section explains what each factor means and how it is determined.

OEE Factor Availability – Calculation and Meaning

Availability is the ratio of actual production time to planned production time.

The calculation formula is:

Availability (%) = Actual production time / Planned production time

Actual production time (runtime) is reduced by both planned and unplanned downtime within the scheduled production window. These are referred to as availability losses and include:

• Maintenance and breaks during planned production time
• Planned setup or changeover times
• Unplanned breakdowns or failures

Before calculating OEE, it must be defined at what point a machine stoppage is counted as downtime under availability. A common rule is a minimum duration of one minute. Shorter stops are instead reflected in the performance factor.

In some models, planned downtimes such as maintenance or breaks are already excluded from the planned production time and therefore do not count as availability losses. This approach allows the focus to be placed entirely on unplanned downtime.

Depending on the objective, both methods can be useful. What matters most is using the chosen approach consistently and clearly documenting the calculation basis.

OEE Factor Performance – Calculation and Meaning

Performance is the ratio of the actual output to the maximum possible output within the given time period.

The calculation formula is:

Performance (%) = Actual output during runtime / Maximum possible output during runtime

The performance factor therefore measures production speed (how many units the machine produces within the actual production time) and compares it to a maximum speed (how many units the machine could theoretically produce in the same time).

The actual output is usually measured directly at the machine. But determining the maximum output or maximum speed is not always straightforward. One option is to use the manufacturer’s specifications, though these are not always available or reliable. Alternatively, companies can utilize historical performance data from the machine (the highest speed achieved in the past). In some cases, the maximum speed can also be calculated directly, e.g. through physical limits.

For performance calculation, the relevant time frame is the actual production time of the machine, as already defined in the availability calculation (see above).

Performance losses occur due to minor stops and slowdowns caused by errors, blockages, or process instabilities.

OEE Factor Quality – Calculation and Meaning

Quality is the ratio of good units to the total number of units produced. Good units are those that do not need to be scrapped or reworked (also called “good output”).

The calculation formula is:

Quality (%) = Number of good units / Total number of units produced

Quality losses can have many different causes such as low-quality materials, machine or tool wear or unstable processes. A more detailed look at scrap and defect causes can be found on our page about the reject rate and how to reduce it.

One important aspect of quality is the fact that it is not always measured or detected at the machine where the defect actually originates. In addition, quality losses recorded for one machine are often linked to earlier processing steps on other machines. As a result, identified quality losses often serve as a trigger for cross-machine root cause analysis.

Overall OEE Calculation – Example

Based on the calculated values for Availability, Performance, and Quality from the previous sections, we determine OEE by multiplying the three factors together.

OEE = 0,8271 x 0,9068 x 0,9435 = 0,7076 = 70,76%

Application and Analysis

Using and analyzing OEE in practice

In practice, OEE is primarily used to make losses visible – meaning all the obstacles that prevent equipment from running at its optimal level (OEE = 100%).

Breaking OEE down into its three factors Availability, Performance and Quality makes it easier to pinpoint the causes of problems and to focus further analysis and improvement efforts on specific areas.

OEE also plays an important role in short-term production monitoring. It is often integrated into OEE dashboards that not only visualize and track individual machines, but also allow comparison across different machines, production lines, or even entire plants. Used like this, OEE provides a quick overall view of productivity across different areas.

For which machines should OEE be calculated?

OEE delivers the greatest impact when it is calculated at so-called constraints – machines or processes that limit overall production output, often because they run slower than the rest of the line.

Focusing on bottleneck machines makes sense, because improving their OEE directly translates into a real increase in productivity. Of course, these constraints can shift over time, especially when targeted improvements are made.

Beyond bottlenecks, OEE is also tracked on strategically important machines such as highly cost-intensive equipment, processes with high quality risks or steps that are critical from a customer perspective.

In principle, OEE can also be calculated for entire production lines or even whole plants although this shifts the meaning of the metric.

A line-wide or plant-wide OEE combines the performance of multiple machines into one overall figure. This provides a simplified overview that is useful for comparing sites or production areas, spotting trends or setting top-level performance targets.

For concrete improvement measures, these higher-level aggregated values are less useful, since the specific causes of losses are hidden within the summary.

What is a good OEE value?

There is no universally “good” OEE value, since OEE depends heavily on the industry, production environment and specific objectives. In many cases, values between 80% and 90% are considered very good.

What matters most is not the absolute benchmark but continuous improvement. OEE highlights where losses occur and serves as a guide to measure the effectiveness of improvement initiatives.

How can OEE be optimized?

Optimizing OEE focuses on its three components: Availability, Performance and Quality. In practice, this means reducing downtime, increasing throughput speed and minimizing quality losses. Typical measures include adjusting maintenance strategies and schedules, improving process stability and employee skills and addressing frequent root causes of scrap.

A “blind” optimization of OEE, is not always meaningful, since the metric does not account for factors such as cost. While frequent preventive maintenance outside production hours, higher staffing levels or the use of premium materials may improve OEE, they are not always economically viable.

Similarly, increasing batch sizes can reduce setup time and improve availability, but this is not always desirable and often conflicts with lean manufacturing principles.

Nevertheless, OEE remains an important tool in production management. Systematically eliminating sources of loss usually goes hand in hand with a long-term improvement in OEE.

FAQ

Other frequently asked questions about OEE

• Can OEE be at over 100%?
• What is the relationship between OEE and TPM?
• How do companies collect the data to calculate OEE?