Matt Hrivnak

Kaizen: There's always another future state

How to calculate OEE: 

OEE stands for Overall Equipment Effectiveness and is the most comprehensive calculation used to determine how effectively you are utilizing your equipment.  It is an important part of total productive maintenance, can help better calculate efficiency losses, and is useful when incorporated into the cycle time calculations.

In order to calculate OEE, you will need to collect some data:

  1. PERFORMANCE RATE – The Performance Rate is calculated by looking at the actual operating speeds of your machines in comparison to the operating speeds that they were originally designed for those machines or the products being run on them.
    • Product A was designed to run on Machine 1 at speed setting 10, the highest speed possible.  Due to the machine’s old age and fragile state, it can only run safely and produce good versions of Product A at a speed setting of 6.  The Performance Rate would then be 60% (i.e. 6 / 10
  2. AVAILABILITY RATE – The Availability Rate is calculated by measuring any production losses due to downtime from equipment failing, breaking down, etc. as a portion of scheduled manufacturing time.
    • Machine 1 runs 36 hours for every 40 available manufacturing hours due to breakdowns.  The Availability Rate is then 90% (i.e. 36 / 40).
  3. QUALITY RATE – The Quality Rate is calculated by determining the amount of losses due to quality issues like scrap and rework as compared to the total parts processed.
    • Machine 1 ran 100 pieces of Product A, but only 98 met the quality specifications.  The Quality Rate would then be 98% (i.e. 98 / 100).

 Now, once you have these 3 important measures, the calculation of OEE is very simple:


Using the examples from above (Performance Rate = 60%, Availability Rate = 90%, Quality Rate = 98%):

          60%  x  90%  x  98% = 52.9%

 Essentially, the OVERALL EQUIPMENT EFFECTIVENESS (OEE) is the % of effective use that you are getting out of your piece of equipment.  It is a compounding, thorough look at your true equipment uptime as a percentage of your total available manufacturing time.  This metric is important for loading workcenters and determining capacities because you are completely aware of a particular machine’s (or machine type) total ‘real’ uptime.

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Comments (1) Posted by matt on Saturday, April 26th, 2008

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