How to Calculate OEE: The Complete Guide for Manufacturing Engineers
OEE — Overall Equipment Effectiveness — is the single most important metric in manufacturing performance management. It distills the complex reality of production operations into one number that tells you how effectively your equipment is being utilized. A world-class OEE score of 85% means your equipment is producing good parts at the expected speed for 85% of planned production time. The global manufacturing average? Around 60%.
That 25-point gap between average and world-class represents an enormous opportunity. For a facility producing $20M in annual output, closing that gap could mean $5-8M in additional capacity — without a single capital expenditure.
This guide walks you through calculating OEE correctly, understanding its components, avoiding common mistakes, and using OEE data to drive real improvement.