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ChangeWise Quick Reads: TPM Part 3: Overall Equipment Effectiveness (OEE)

In our previous Quick Reads, we explored how Total Productive Maintenance (TPM) is an approach to equipment maintenance that strives to achieve perfect production. We looked at where the methodology comes from, what it is, and the benefits it can bring to your organisation. We also discussed the 8 pillars which form the basic structure of the methodology. To complete our overview, let’s investigate how to measure TPM success using Overall Equipment Effectiveness (OEE) metrics.

Why use OEE?

Put simply, if we can measure something, we can improve it. OEE calculates the percentage of planned production time that is truly productive. It can help an operation to track progress over time, and help us benchmark ourselves against industry standards.

Since the goal of TPM is to achieve perfection, OEE is integral to Continuous Improvement success.

What are the OEE Metrics?

OEE accounts for losses in 3 critical elements:

Let’s take a look at each in turn:

Availability Losses

This incorporates all events that prevent planned production (equipment failure, unavailability of materials etc), and all planned production pauses (change-over time, planned maintenance, staff breaks etc).

Availability = Run Time / Net Operating Time

Performance Losses

This looks at anything that might cause the equipment to operate at less than maximum speed (slow speeds, known breakdowns, unknown losses etc). This is often referred to as ‘throughput efficiency’ or ‘equipment performance efficiency’. 

Performance = Actual Output (the time the machine is actually loaded and performing work)

/ Target Output (fastest theoretical time to produce one item – the design speed)

Quality Losses

This focuses on failure demand, so items that do not meet quality control or are later reworked.

Quality = Good Output / Actual Output

OEE takes all losses into account, allowing for a truly productive manufacturing time:

OEE = Availability x Performance x Quality

Remember! A World Class Standard for OEE is 85%, but very few assets perform at a level higher than 60% (typically 20-60%). To achieve an OEE of 85% requires Availability of 90%, Performance of 95% and quality of 99%.

What are the key benefits of OEE?

Since many manufacturers are performing at a rate of 20-60%, OEE provides a great opportunity for an improvement programme:

  • Demonstrates aggressive erosion of asset performance
  • Exposes ‘invisible’ chronic losses
  • Challenges digital mentality – Plant is ‘on’ or ‘off’
  • OEE answers the vital question – ‘how well is it working?’
  • The measure can be used to benchmark performance and drive continuous improvement activities:
    • Focus improvements to add most value at the tactical and strategic level
    • Optimise existing equipment
    • Use as a standard business measures across sites
    • Use to focus maintenance activity
    • Use as part of supplier/commissioning contracts

In Summary

TPM consists of 8 key pillars, with a 5S foundation. The ultimate goal is to ensure maximum equipment effectiveness and employee empowerment in order to support the Quality, Cost, and Delivery of a product.

Overall Equipment Effectiveness (OEE), is a metric that can be used to calculate the percentage of planned production time that is truly productive, enabling an operation to reduce costs and increase profitability. OEE can help an operation to track progress over time, and provide a benchmark against industry standards.

Interested in learning more about how OEE could help to improve your organisation? Contact us at

ChangeWise believes employee engagement is the foundation for successful Change. Training and coaching your people to use simple continuous improvement techniques will enable your organisation to continuously adapt and stay ahead in a constantly changing and challenging environment.

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