Need More From Your Equipment?

by Tom McBride, Partners for Creative Solutions, Inc.

Does it surprise you that a typical machine produces only 30-50% of its capability during scheduled production time?  If you need to increase production capacity, before buying additional equipment or outsourcing, consider improving performance of your current equipment.

To find out how a piece of equipment is performing, calculate its OEE (Overall Equipment Effectiveness).  This powerful metric considers three major components using the equation

OEE (%) = Availability (%) x Performance Factor x Quality Factor


Availability is the percentage of planned time the equipment actually operates. Availability (%) = Run Time / Planned Operating Time x 100.
Performance factor is actual output divided by theoretical output.  Theoretical output is what the machine could produce if it ran at its accepted full speed production rate throughout its run time.  A performance factor of less than 1.0 can be caused by nuisance stops, making adjustments, running at less than standard speed, etc.
Quality factor is the ratio of good quality product to the total produced.



A machine used for an 8 hour shift (480 minutes) had a planned downtime of 30 minutes (20 for breaks and 10 for meetings).

There was also 120 minutes of unplanned downtime (45 for breakdowns, 35 waiting for material, and 40 for changeovers).

The machine is capable of producing 2 pieces per minute.

440 pieces were produced during the shift, but 30 pieces failed inspection.

Calculate OEE:

Availability = 73.3% = Run time (330) / Planned Operating Time (450) x 100.

Planned Operating Time = 450 (480– planned downtime of 30)

Run Time = 330 (450 planned operating time – 120 unplanned downtime)

Performance Factor = .667 (Actual Output of 440 / Theoretical Output of 660)

Theoretical Output = 2 x 330 (run time) = 660

Quality factor = .932 (good product / total product)

Good product = 410 (440 produced – 30 bad)


OEE = 73.3% x .667 x .932 = 45.6%

OEE is a measure of the good quality produced compared to what could have been produced under ideal (perfect) conditions.  Although ideal conditions are rare and are usually brief, world class organizations have sustained OEE’s of 85-90% by applying the Total Productive Maintenance (TPM) improvement philosophy.  A powerful component of lean manufacturing, TPM challenges teams comprised of operators, maintenance technicians, supervisors, and support personnel to make dramatic improvements in machinery operation, care, and output.  TPM is a company-wide effort that helps create a shift in attitude from “I operate and you fix” to “we optimize quality output”. 

If your organization relies heavily on equipment, you may wish to find out more about the TPM philosophy at