OEE: Overall Equipment Effectiveness Explained

Carl Trigg  ·  October 2026  ·  8 min read  ·  Free calculator

Overall equipment effectiveness (OEE) measures how much of a machine's or process's planned time actually produces good output. It was developed by Seiichi Nakajima as part of total productive maintenance (TPM) in Japan in the 1970s and 1980s. An OEE of 100% means making only good units, as fast as possible, with no stops.

OEE is useful because it combines three different kinds of loss into one figure and then lets you split that figure back out to see which loss is biggest.

Availability×Performance×Quality=OEE
Each factor is a percentage. Multiplying them shows how small losses compound.

The three factors

OEE = availability × performance × quality.

Worked example

A packaging machine is planned to run for one 450-minute shift:

MeasureFigureCalculation
Planned time450 min—
Unplanned stops45 min—
Run time405 min450 − 45
Availability90.0%405 ÷ 450
Ideal cycle time30 sec—
Units made700—
Performance86.4%(30 × 700 ÷ 60) ÷ 405
Good units665—
Quality95.0%665 ÷ 700
OEE73.9%0.900 × 0.864 × 0.950

No single factor looks bad, yet a quarter of the shift is lost. At 100% OEE, the machine could make 450 × 60 ÷ 30 = 900 good units. It made 665, so 235 units were lost.

Calculate your OEE

Use one shift or one week of real figures. The ideal cycle time should be the fastest rate the process can sustain, not the average.

OEE Calculator

What is a good OEE?

An OEE of 85% is often quoted as world class, a figure that comes from Nakajima's TPM work. Treat it with care: it is a rule of thumb, not a benchmark for your industry. A small job shop with frequent changeovers will rarely get near it. More important than the level is the trend. Measure it the same way every week and work to improve it.

How to improve each factor

Sources

Put This Into Practice

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