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The OEE is the most well-known indicator. It will help prioritize actions and focus on the most important losses.


The role of the OEE (Overall equipment Effectiveness) is to know the rate of use of equipment by measuring the availability, performance and quality produced by Equipment1.

The decomposition of the OEE

There are many model of calculating the OEE. Depending on the corporate culture or what the management wants to put forward, the distribution of the types of loss can be done in a different way (example : are the micro-stops operating losses or NET time losses?).

The NAKAJIMA Model (1984)2, the father of the TPM

The NF standard E-60-1823 (2002) model

Total Time TT : Reference time incorporating all possible states of the means. For one day, the total time is 24 hours; For one week, the total time is 168 h; For one year, the total time is 365 days, 24 hours, etc.

Opening time OT : part of the total time corresponding to the amplitude of the working hours of the production means foreseen in the production schedule at the beginning of the month or week. We exclude  the scheduled closing times such as : annual maintenance, new product testing, underloading, machine modification, testing, training, meeting, break…

time Required TR : Part of the opening time during which the user engages his means of production with the will to produce by removing the sudden downtime: breakdown, change of series, absence of personnel, adjustment, absence material First, energy defect…

operating time OT : Part of the time required during which the means of production produces good and bad parts in accordance with the reference cycle time (TCR) and with all or parts of the functions in service. We subtract all faults, micro-stops, quality control…

Net Time NT : Part of the operating time during which the means of production would have produced good and bad parts, in accordance with the reference cycle time (TCR).

Useful Time UT : Part of the net time (tN) corresponding to the unmeasurable time obtained by multiplying the number of good parts by the reference cycle time (tCR).

Calculating the OEE

Methods 1 : Calculation with the different factors

The OEE is calculated via the multiplication of 3 factors: operational readiness (OD), Performance rate (TP) and quality ratio (TQ).

For the NAKAJIMA model

  • TQ = (Total parts Quantity – quantity of defects)/Total parts Quantity
  • TP = (Theoretical cycle time * Total parts quantity)/operational time
  • DO = (Opening time – loss in series change, setting, failures)/Opening time

For the AFNOR model

  • TQ = Useful Time/Net time
  • TP = Net Time/operating time
  • DO = Operating time/time required

Methods 2 : Simplified calculation of the OEE

In a much simpler way and if we want to know only the real value of the OEE, without having the decomposition of the 3 indicators, the OEE is calculated in the following way 4 :

OEE = number of good parts produced * cycle time (range)/Opening time

Interpret the OEE

  • The OEE may not be greater than 100%: one cannot produce more than it is possible or then: there is a mistake in the range time, retouched parts of the previous productions were put back online, one did not make planned stops and one did not mod Ifié the opening time accordingly, more staff were allocated without transcribing it on the objective…
  • The difference between the 100% performance and the real OEE is due to the loss of performance of the equipment. Example, a OEE of 50% means that for 50% of the time a machine can be used, it produces good parts.
  • Whatever the method of calculation or the type of breakdown of the losses, the challenge is to know what you want to communicate through your OEE. Example, are breaks, are they to count in the opening time or not…

Calculation of the ORR

ORR, the overall rate of return, is the ratio of the quantity of good products produced to the quantity of products that could have been manufactured under ideal conditions5.

It is calculated with the following formula:

ORR = useful time/Opening time

Difference between the OEE and the ORR

At the sight of the formula, there is no difference between the OEE and the ORR. To this close, and not least, that the OEE assumes that all good manufactured products are sold (market capacity = or > production capacity).

Thus, the opposite case, market < capacity production capacity, it is more relevant to speak of ORR taking into account that the useful time is representative of the production time of the number of parts that will actually be sold.

Calculation of the ERR

The tar, an economic rate of return, is a strategic indicator of means engagement. It allows managers to assess the economic performance of the equipment in relation to the total time of ownership.

It is calculated with the following formula6 :

ERR = useful time/Total time

This indicator is relevant in the event that we want to analyze our opening times or the purchase of new equipment and the need to be able to open more or less our equipment to better cushion them.

Two cases are before us:

  • The ERR is important: the machine is very much used. Maybe it should open it more or see to buy another.
  • The ERR is weak: It may be useful to reduce the opening times, or its purchase was unnecessary.

The 6 sources of loss7


They represent all the losses associated with the actual failure of the equipment:

  • The casing of the equipment
  • Worn tool changes
  • The lack of energy
  • Computer failure


Organizational problems are also the cause of many performance flaws:

  • Absence of staff not provided
  • Waiting for production launch decision
  • Lack of raw material
  • Waiting for the batch file
  • Waiting for parts of the machine upstream

Micro-shutdown and idle

Micro-stops are all short-term stops, by convention less than 5 mn. Stress generator, they often cause a significant loss of performance. Difficult to measure, they are inferred when calculating the operating time or between the instantaneous cycle time and the time range.

Slowdown and sub-speed

Speed represents the loss of performance due to a difference in cadence between the theoretical cadence and the actual cadence. Usually these are losses due to bad adjustments or poor maintenance.

Difference between the OEE and the ORR

At the sight of the formula, there is no difference between the OEE and the ORR. To this close, and not least, that the OEE assumes that all good manufactured products are sold (market capacity = or > production capacity).

Thus, the opposite case, market < capacity production capacity, it is more relevant to speak of ORR, taking into account that the useful time is representative of the production time of the number of parts that will actually be sold.

Quality problem 

The problems qualities include both the scraps, which is going to be thrown away, as the occasions. Here we include the quality problems produced directly, the problems qualities of the supplier and the customers.

Start production

Production start-up losses represent all losses associated with a change of series, a restart after changing teams or after maintenance…

Data collection

The software

Specific software exists to measure in real time all the losses of the equipment. We find the software types :

  • CMMS : Computer Assisted Maintenance Management
  • MES : Manufacturing Execution System

All the complexity of these softwares is to set them up in a sufficiently relevant and precise way to have readable and representative results of reality. The typical error is for example to indicate a shutdown of machine 2, and therefore to detect a problem on this machine, when in reality it is the machine upstream or downstream that has a problem.

 manual methods

There are many manual methods available to collect the data. These methods represent the advantage of being inexpensive, easy to implement and allowing more involvement of operators in step8. However, the reprocessing time is more complex and longer.

Improve the OEE

The table below lists the different tools to be applied to improve the OEE according to the type of losses9.

Type of Loss Possible Action
Failure 6 Sigma, TPM
Organization Just In Time, versatility
Micro-Stop 5S, Autonomous Maintenance
Speed TPM, process design
Quality problem self-quality, culture and quality tools
Start production SMED, standardization, 5S, visual Management


OEE and financial profitability

Knowing how to determine the value of a OEE point is very important for 2 reasons10 :

  • The importance of the loss varies with the conditions of the company. For example, cost reduction is a strong axis in the Times ” when the company is in the middle of a boom.
  • Some losses are difficult to measure and one would be tempted to put resources on more visible losses. But having a precise decomposition of losses makes it possible to have a more structured resource allocation approach.

To measure the gain of a OEE point, we can have 2 approaches:

Approach 1

Approach 2

Description of the situation

We do not have a capacity problem, we only want to reduce our costs.

We can no longer deliver the customers, we want to increase our capacity.

Calculating the gain of a OEE point

Be based on the cost of direct and indirect manpower, energy… that we save.

Either by the investment gain not necessary (additional machine…).

or by the extra margin made by the number of products sold in addition.


1 – F. Voehl, H. J. Larrington, C. Mignosa, R. Charron (2010) – The Lean Six Sigma Black Belt Handbook

2 – S. Nakajima (1989) – TPM Development Program : Implementing Total productive maintenance

3 – AFNOR NF E60-182 (2002) – Means of production – performance indicators – synthetic rate of return (OEE) – Overall rate of return (TRG) – Economic rate of return (TAR)

4 – T. Munch (2009) – Injecting presses

5 – M. Nakhla (2006) – The bulk of industrial management

6 – Cetim (2005) – The OEE : An Industrial performance tool

7 – K. Shirose (1992) – TPM for workshop leader

8 – T. Hino (1998) – Method of evaluating losses from stoppers due to failures for the purpose of measuring the effect of maintenance

9-K. Sekine, K. Arai (1992) – TPM for Lean factory

10 – Productivity Press (2005) – TPM : Collected practices and cases

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