How Do OEE Systems Measure Production

Manufacturers need to ensure that they remain as productive as possible. Companies that can achieve a high rate of output with minimal downtime are more likely to take the lead in their respective industries. 

To do this, however, they need advanced methods for measuring production and ensuring ongoing productivity. As we discuss below, OEE systems are among the best tools. In this post, we discuss what they are, how they work and why they are important. 

What are OEE Systems?

OEE stands for “overall equipment effectiveness” and is widely considered to be the best method for measuring manufacturing productivity. The purpose of these systems is to calculate the ratio of manufacturing time that is truly productive. Thus, an OEE of 100 percent would mean that the factory had no downtime at all. 

How do OEE Systems Measure Production?

OEE breaks down into three different categories to give a composite score. 


Availability takes both planned and unplanned stops into account. It measures the time that processes are running compared to the total time available. A score of 90 percent, for instance, means that processes are running 90 percent of the time. 


OEE also takes performance into account by measuring how fast a process is running compared to the fastest it could possibly run. If a process can produce 100 widgets in 1 hour but is only producing 80, then the performance OEE score is 80 percent. 


Quality is another critical factor. This measure takes defects and reworking into account. A score of 100 percent means that there are no defects or parts that require reworking at all. Likewise, a score of 80 percent means that 20 percent of output is defective in some way. 

OEE combines availability, quality and performance into a single benchmark. Average OEE scores vary by industry. Most average companies achieve an OEE of around 60 percent. World-class manufacturers can sometimes get it as high as 85 percent. 

Why is OEE Important?

OEE is important because it provides direct feedback on the quality of your processes. For instance, it can: 

  • Make you more competitive in your target market, allowing you to produce higher-quality output than your competitors
  • Reduce machine and repair costs
  • Improve your ability to schedule your output
  • Improve the capacity and scalability of your production line
  • Give you clear insight into the areas of your operation that you need to improve
  • Deliver a high return on investment when investing in plant and machinery
  • Allow you to use your equipment to its full capacity

What are the Consequences of Not Using OEE Systems?

The consequences of not using OEE systems are severe. Issues could include: 

  • A lack of competitiveness in your target industry (particular on quality and cost)
  • Higher maintenance costs for machinery
  • Lack of ability to schedule output
  • Lack of ability to scale your output according to customer demand
  • Poor return on capital 
  • Lack of equipment utilization

Ultimately, using OEE systems allows you to analyze your performance and improve your operating model. The more you can hone the three OEE factors of availability, performance, and quality, the more competitive you will become.