OEE (Overall Equipment Effectiveness) is a “best practice” metric used to assess the efficiency with which a manufacturer’s operation is being used. It identifies the percentage of planned production time that is truly productive.
This formula, if calculated and interpreted correctly and accurately, can significantly maximise your production. By measuring performance and acting on it, we can solve operational problems and achieve continuous process improvement.

How does it work?

  • The OEE serves as a benchmark for production, with 100% representing perfect production. This means that it meets the following conditions:
  • Manufacture exclusively of quality parts.
  • In the shortest possible time.

No downtime or inactivity.In order to interpret the OEE standard values, there are a number of general benchmarks that determine the level of production efficiency according to their score, although they will always be subjective for each factory. These are:

  • 100%: Perfect production.
  • 85%: Adequate long-term objective.
  • 60%: Indicates that there is substantial room for improvement.
  • 40%: Low score that can be easily improved.

What parts does OEE consist of?

The OEE calculation converts the ‘6 large losses’ of TPM (Total Productive Maintenance) into a number that represents the effective operating rate for a piece of equipment or synchronised line. The 6 sources of loss of efficiency are classified into the 3 categories mentioned in the previous point:

Availability (Downtime)

  • Equipment failure (breakdowns)
  • Configuration and settings

Performance (speed)

  • Idling and minor stops
  • Reduced operating speed

Quality (No. of defects)

  • Problems such as waste or repairs
  • Reduced yield (from start up to stable production).

OEE calculation formula

To calculate the percentage of EEO, we must first know the availability rate, the performance rate and the quality rate. These are calculated as follows:

Availability rate: percentage of time that the machine is ready to produce correctly.
Available time (programmed operating time – down time) / Programmed operating time

Output rate: ratio of the produced output compared to a standard (for the standard, use the best-known output rate).
Actual output / Standard output.

Quality rate: ratio of good output compared to actual output).
Right first time output / Actual output.

Once we have these three values, we can proceed with the OEE calculation:

OEE (%) = Availability rate × Performance rate × Quality rate


How does it benefit companies?

The benefits of meaningful and accurate metrics can be summarised in three broad blocks:

  • Identify losses: maximise workforce productivity by being able to understand problems, production weaknesses or bottlenecks, such as why you are experiencing downtime or why waste levels are above standard.
  • Evaluate progress: this information allows you to visualise production problems rather than having to rely on an estimate. It also helps to understand the actual performance of the equipment by highlighting the biggest sources of productivity loss by a single percentage.
  • Improve manufacturing equipment productivity (and eliminate waste): maximises the Return on Investment (ROI) for equipment by reallocating resources appropriately and anticipating potential machinery failure. This also increases the competitiveness of the manufacturing system.

A production measuring rod

The OEE is an improvement metric that gathers a lot of valuable information into a single percentage, but it must be executed and interpreted accurately in order to make sense.
The critical value of OEE is that it helps to understand and analyse the 6 major losses, but it should not be used as a KPI, but as a form of analysis to understand critical production issues, such as whether there is additional capacity to support changes in demand.
OEE is unique for each individual production equipment. There is no absolute value that works as a reference point, but the real measure is the speed at which it improves. That’s why managers must assign goals that are feasible, real-time, easy to interpret, and motivate workers.

Nexus Integra and the OEE

Nexus Integra and its integrated system allows the automatic integration of all the information of the production of industrial plants. In this way, it improves the efficiency of the processes by collecting historical and real time data.

Nexus Integra is very versatile, simple and efficient both in its maintenance and in its future scalability. The system’s interfaces are natively web based, allowing an agile access to the information. Moreover, it allows the integration of MES applications for the calculation and analysis of OEE, incorporating the results of OEE analysis to the rest of native applications such as SCADA, reports, etc. Allowing to have the information unified.

If you want to improve the productivity of your manufacturing equipment, contact us and we will help you to achieve the best OEE metrics and get the maximum value from them.