How to Calculate OEE – Formulas & Examples

While our OEE calculator helps you estimate your OEE, and our OEE software track and improve it, this article explains how to calculate OEE and its components in detail. We will look at the formulas and explain the calculations using examples.

The Three Components of OEE (Overall Equipment Effectiveness) Calculation

While you can find many different articles in our OEE fundamentals section about the importance of OEE and how to apply it, our aim here is to look at calculating OEE in more detail.

OEE (Overall Equipment Effectiveness) is a pivotal metric in manufacturing, measuring the effectiveness of equipment. It monitors how much time is productive and where to make improvements.

To calculate the OEE formula, you must multiply OEE’s 3 components: Availability, performance, and quality.

How to Calculate OEE

For an OEE calculation, you need these 4 formulas:

1. Availability = Run Time / Planned Production Time
2. Performance = (Ideal Cycle Time x Total Count) / Run Time
3. Quality = Good Count / Total Count)
4. OEE = Availability x Performance x Quality

What needs adding to these formulas, though, is understanding. What do these values represent, and what do they mean for your manufacturing processes?  As you can see, OEE is intrinsically linked to 3 key components: availability, performance, and quality. So what are these 3 metrics, and why are they important?

In this article, you will find:

• Availability formula explained
• Performance formula explained
• Quality formula explained
• How all OEE components work together

Availability – OEE Calculation Example

To find equipment/machine availability, divide the working time by the total scheduled time for that period. Then, multiply the result by 100 to show it as a percentage.

You already know your scheduled working time, but how do you find out your actual working time?

Doing that is simple. Register all stops (downtime) and subtract them from your scheduled working time.

Performance – OEE Calculation Example

The formula of the Performance component of OEE is:

You already know how many products you produce (keep in mind, these are all products, including scrap), but how do you find out how many you could produce?

To do that, you simply multiply your actual working time and your maximum production speed.

How do you find out your maximum production speed?

Sometimes, the manufacturer of the machine specifies it (it might also be called “nameplate” or “ideal cycle time”). If not, you can identify the fastest recorded time. Firstly, look at the machines’ performance history. Next, calculate how many products you would make if your machine ran at that speed.

If you don’t have this data, we highly recommend implementing an OEE system that does these calculations for you and gives you the data you need to manage OEE effectively.

Quality – OEE Calculation Example

The formula for Quality is:

“All products” is simply good products + scrapped + reworkable products.

Combine All 3 Components for the OEE Calculation Formula

If you multiply all OEE components with each other, you will get the OEE value.

The best way to work this out is with our OEE calculator, but having the following formula is also incredibly useful. For example, if you know the other values, you could use them to discover a missing OEE component. If you know your OEE, performance, and quality, then you can find out availability like this:

Here is the interactive visualization of this formula:

Note: If you want to calculate your OEE using Excel, then open our Excel template for OEE calculation and input your numbers.

OEE Implementation Guide: A Path to Manufacturing Excellence

Understanding and implementing OEE is a strategic move toward achieving optimal manufacturing efficiency. Once the OEE Calculation is complete, strive toward a systematic implementation that will set you up for success. 

1. Define your ‘Why’. What is the core problem you’re facing that OEE aims to address? 
2. Nominate a dedicated OEE ‘champion’ who takes ownership of the implementation from start to finish. 
3. Create a pilot project monitoring a specific machine or production line. Set clear, accessible goals. Always think about how to optimize resources and improve the bottom line. 

For a detailed guide, consider reading Modern Manufacturer’s OEE Implementation Guide.