Glossary

Overall Equipment Effectiveness, or OEE is one of the common several important metrics manufacturing managers use to improve their facilities’ effectiveness and productivity, in attempt to produce more using their existing resources. OEE is intended to be a yardstick for measuring improvement. The measure includes machines, the workforce, tools and other equipment’s effectiveness and efficiency, and is a metric commonly found in Lean Manufacturing. The OEE formula is: Availability x Performance x Quality (A * P * Q) and it helps manufacturers answer three important questions: How often is the machine available to run? How fast does it run? And – How many approved parts are produced? Simply put, OEE assigns numerical value to improvement opportunity. OEE tests the availability, performance and quality of a given piece of equipment and tell you ‘how many right-first-time products the equipment produced, compared to its theoretical maximum capacity, in the allocated time’. OEE contributes directly to increased ROI as well as productivity. Without optimized, measured OEE, manufacturers will suffer from setbacks and bottlenecks and will find it hard to identify where the source of the problem is coming from.