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OEE fundamentals 
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.
We’ll present you with the formulas you need to understand together with calculation examples that are based on the default values in our OEE calculator. By the time you finish this article, you will know exactly how to calculate OEE.
If you have any questions about the formulas or explanations, don’t hesitate to get in contact with our team.
In this article, you will find:
- Availability formula explained
- Performance formula explained
- Quality formula explained
- How all OEE components work together
Availability Formula Explained
Availability is essentially the time that your machines are actually working, as a percentage of scheduled working time.
To calculate equipment/machine Availability, the actual working time is divided by all scheduled time for the same period to get the proportion and multiplied by 100 to express the value in percentages:
You already know your scheduled working time, but how do you find out your actual working time?
To do that, you register all stops (downtime) and subtract them from all scheduled working time.
Performance Formula Explained
To calculate performance, you need to find out how many products you produce, and how it compares to the number of products that you could produce at maximum speed during your actual (not all scheduled, but actual) working time.
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 (alternative terms – “nameplate”, or “ideal cycle time”). If not, you can identify the fastest recorded time by looking at historical performance and then calculate how many products you would make if your machines were constantly running 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 Formula Explained
Simply put, quality shows the portion of good products among all products.
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.
Even though there is a simpler way to calculate OEE, this formula is also helpful. You could use it to find out a missing OEE component if you know the other values. For example, if you know your OEE, Performance, and Quality, then you can find out Availability like this:
Here is the interactive visualization of this formula:
This graph is interactive! (drag the dashed --- lines)
Excel Template for OEE (Overall Equipment Effectiveness) Calculation
If you want to calculate your OEE using Excel, then open our Excel template for OEE calculation and input your numbers. If you have questions regarding the Excel template, then don’t hesitate to contact our team.
OEE Implementation Guide: A Path to Manufacturing Excellence
However, don’t forget that implementing Overall Equipment Effectiveness (OEE) is a strategic move toward achieving optimal manufacturing efficiency. As such, you should strive towards a systematic implementation of OEE, following steps that set you up for success.
For example, starting by defining the ‘Why,’ – articulating the core problem or objective the OEE implementation aims to address. You must also have a dedicated leader, or ‘Champion,’ who takes ownership of the implementation from start to finish, ensuring alignment with organizational goals. You mustn’t also skip a pilot project, where you select a specific machine or production line to be monitored, with clear goals that are aligned with the broader objective of optimizing resources and improving the bottom line.
For a detailed guide, consider reading Modern Manufacturer’s OEE Implementation Guide.