🎯 Why measure this KPI?
Without measuring OEE, companies do not know where and why they are losing production potential. The indicator identifies three main areas of loss: downtime, reduced productivity and quality problems. It is a key tool for lean manufacturing – it provides concrete data for daily and strategic decisions.
🏆 The business objective to which the KPI relates
OEE supports the goal of increasing efficiency in the use of production resources – without investing in new lines or additional personnel. It enables a company to produce more with the same infrastructure.
📏 Definition of KPI – what does it measure?
OEE measures how much of the planned production time was actually used to produce good products, at the planned rate. The indicator consists of three components:
- ⏱️ Availability – loss through downtime and failures,
- ⚙️ Productivity – loss through slowdowns,
- ✅ Quality – loss through shortages and waste.
Check Out a Ready-to-Use OEE KPI System for Your Company
🧮 How to calculate KPIs?
Formula:
📐 OEE = Availability × Productivity × Quality
Component definitions:
- Planned time – time scheduled for production (we do not subtract maintenance)
- Availability = (Planned time – unplanned downtime) / Planned time
- Productivity = (Pieces produced × Cycle time) / (Planned time – downtime)
- Quality = Good pieces / All pieces
Example:
- Planned time: 480 min
- Downtime: 60 min
- Production: 800 pieces, 760 conforming
- Cycle time: 0.5 min
📊 Availability = 87.5%
⚙️ Productivity = 95.2%
✅ Quality = 95.0%
📉 OEE = 79.0%
📈 What KPI value is good?
| OEE | Level | Meaning |
|---|---|---|
| >85% | 🟢 World Class | Optimum efficiency |
| 70-85% | 🟡 Good | Stable operation |
| <70% | 🔴 Alert | High losses |
| <60% | 🚨 Critical | Strategic risks |
🧯 What to do when the KPI drops?
🔴 If OEE < 70% – alarm level
It is worth implementing systemic measures:
✅ Recommendations:
- Analyze the 3 components:
- Availability < 85% → too much downtime
- Performance < 90% → too slow
- Quality < 95% → too many deficiencies
- Conduct a 5-Why or Fishbone (Ishikawa) analysis
- Add to the daily report the field “Main cause of OEE decline”
- Set a goal for the current week (e.g., reduce changeovers)
- Send weekly alert to management if OEE < 70%
🚨 If OEE < 60% – critical level
This is no longer just an operational problem, but a strategic one.
🚨 Recommendations:
- Establish a rapid response team and perform an audit
- Arrange losses according to “Six Big Losses.”
- Breakdowns, changeovers, micro stoppages, low speed, preliminary and final waste
- Enter escalation table in Coda – alert to leader at OEE < 60%
- Add links to instructions and checklists in the system
- Analyze the unit cost of production dependent on OEE – e.g., PLN/hour.
❗ Typical mistakes when analyzing OEE
- 🚫 Subtract scheduled downtime from scheduled time
- 🌀 Counting only one component (e.g., productivity) as OEE
- 🔍 Comparing machines without the context of technology
🧠 What decisions can you make based on this KPI?
- 📅 Planning for realistic capabilities
- 📉 Priorities for TPM and SMED
- 🧰 Motivation of shift teams
- 📈 Reporting to management and the customer
🚀 How do you implement this KPI quickly?
🧾 Summary
The OEE KPI is the most complete tool for assessing production efficiency. It allows not only to measure, but also to understand and improve. It is worth not only tracking it, but also reacting when the value falls below the threshold – especially 70% or 60%.
