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Know the OEE and Its Formulas

What is OEE?

Definition is Overall equipment effectiveness (OEE) is a measure of how efficiently a manufacturing operation (facilities, time, and material) is used in comparison to its full capacity during the periods when it is scheduled to run. It determines the amount of time spent manufacturing that is genuinely productive. Only good parts (100 percent quality), at maximum speed (100 percent performance), and without interruption are produced with an OEE or Overall equipment effectiveness of 100 percent (100 percent availability).

OEE measurement benchmark is a best practice in manufacturing. You will receive valuable insights on how to systematically improve your manufacturing process by measuring OEE or Overall equipment effectiveness and the underlying losses of cost. The single best statistic for discovering losses, measuring progress, and improving manufacturing equipment productivity is OEE or Overall equipment effectiveness (i.e., eliminating waste).

Easy Calculation

The ratio of Fully Productive Time benchmark to Planned Production Time is the simplest way to calculate OEE for overall asset effectiveness. Fully Productive Time simply means producing only Good Parts as quickly as possible (Ideal Cycle Time) with no Stop Time. As a result, the calculation Formula of is:

OEE= (good count x ideal cycle time) / planned production time

Although this is a perfectly valid OEE or Overall equipment effectiveness calculation, it does not include information on the three loss-related factors: availability, performance, and quality. We use the preferred calculation for this.

Calculation of Choice

The most commonly used OEE or Overall equipment effectiveness calculation is based on the three OEE or Overall equipment effectiveness Factors of cost: Availability, Performance, and Quality.


Definition is Availability takes into account all events that cause planned production to be halted for a long enough period of time that it is possible to trace the cause of the outage (typically several minutes). The ratio of Run Time to Planned Production Time is used to calculate Formula of availability of cost:

Availability= run time/ planned production time

Definition of Run Time is simply benchmark Planned Production Time minus Stop Time, where Stop Time is defined as all time when the manufacturing process was supposed to be running but was not because of Unplanned Stops (e.g., Breakdowns) or Planned Stops (e.g., Changeovers).

Run time= planned production time – stop time


Definition of Performance considers anything that causes the manufacturing process to run at less than the maximum possible speed when it is running (including both Slow Cycles and Small Stops) for overall asset effectiveness and overall equipment effectiveness. The ratio of Net Run Time to Run Time is referred to as performance of cost. It is calculated as follows:

Performance SAP = (ideal cycle time x total count)/ run time

The ideal cycle time benchmark is the fastest cycle time that your process can achieve under ideal conditions. As a result, when multiplied by Total Count, the result is Net Run Time (the fastest possible time to manufacture the parts). Because rate is the reciprocal of time, Formula of performance can be calculated as follows:

Performance SAP= (total count/ run time) / ideal run rate

Performance benchmark should never exceed 100 percent. If it is, it usually means that the Ideal Cycle Time has been set incorrectly (it is too high) for overall asset effectiveness.


Definition of Quality is considers manufactured parts that do not meet quality standards, including those that require rework. Remember that OEE or Overall equipment effectiveness Quality, like First Pass Yield, defines Good Parts as parts that successfully pass through the manufacturing process the first time without requiring any rework. Formula of Quality is calculated as follows:

 Quality SAP = good count/ total count

This is equivalent to dividing Fully Productive Time of calculation (only Good Parts manufactured as quickly as possible with no Stop Time) by Net Run Time (all parts manufactured as fast as possible with no stop time).


Definition of OEE accounts for all losses, yielding a measure of truly productive manufacturing time of cost. Formula of is calculated as follows:

OEE disadvantages SAP = availability x performance x quality

When the equations for Availability, Performance, and Quality are substituted in the above and simplified, the result is:

OEE disadvantages SAP = (good count x ideal cycle time) / planned production time

This is the “simplest” OEE disadvantages calculation that was previously described. And, as previously stated, multiplying Good Count by Ideal Cycle Time yields Fully Productive Time (manufacturing only Good Parts, as fast as possible, with no Stop Time).