Attaining 100% productivity seems to be everyone’s goal, either at work or in our personal lives. If a human could work 24hrs a day, 7 days a week, without any rest or mistakes we could say they are 100% productive.

Similarly, any machine or factory working 24/7 without any shutdowns or scrap is considered 100% productive. That’s all good, but realistically, achieving this is impossible. Still, we can always strive for improvement and aim to reach close to 100% productivity. The main question is how to do it. One of the most effective and budget-friendly techniques is using a smart monitoring system to improve overall equipment effectiveness.

What is OEE?

OEE, an acronym for (Overall Equipment Effectiveness), is the method used to measure manufacturing productivity. It’s pretty much the most important indicator for manufacturers. In a few words, it measures what amount of actual productive work was done out of the total manufacturing production time. Theoretically, 100% quality, availability, and performance are needed to achieve 100% OEE but that’s pretty much impossible.

It would require all equipment to produce no scrap, to reach maximum machine speed production, and eliminate downtimes completely.

The different OEE values that are common among the manufacturers are as under:

  • 100%: known as perfect production, is practically impossible to achieve.

  • 85%: world-class production rate, is a long-term goal for many industries.

  • 60%: known as the typical scenario, major industries usually fall in this zone, indicating major improvement opportunities.

  • 45%: known as low, common among industries that have just started monitoring their OEE. It can be increased by simple methods and steps.

How to Calculate your OEE?

There are different tools available on the market to calculate and measure it, along with other KPIs (Key Performance Indicator). You can calculate it by hand or let a smart manufacturing system like CLARIRPOD calculate it for you for more accurate and real-time results.

Two methods can be used :

Simple Calculation: this method does not provide any information regarding the loss factors which are availability, performance, and quality. Calculation using this method is as under:

  • OEE = (Good Count × Ideal Cycle Time) / Planned Production Time

Preferred Calculation: This method covers all three loss factors for the machines and gives a complete result.

  • Availability = (Operating time / Planned operating time)

  • Performance = (Parts produced x Ideal cycle time) / Operating time

  • Quality = Good units / Total units produced

Its Importance

Large downtimes, decreases in production, increased maintenance costs, and short machine life cycles will all contribute to major losses. It is very important to optimize the OEE to improve production cost-effectively. Keeping track of this KPI also offers all the below-mentioned points:

  • It enables factories to ensure the full functional capacity of the equipment.

  • It reduces unnecessary machinery expenses.

  • It narrows down problem areas and helps in prioritizing high-risk faults, giving a better overview of the manufacturing process.

  • Increases the overall production capacity.

  • It keeps up to date with current technology and market and so, makes factories competitive.

  • It allows you to measure quality, availability and performance in order to reduce scrap production, optimize production cycle time and improves quality.

Reaching the Goal

Systems used to reach the desired goal and improve OEE are mostly real-time monitoring. Manufacturers need to keep a continuous look to improve their OEE and production in the factory. They can use several monitoring systems that are equipped with real-time data collection, use case-based tools, and root-cause analysis tools. Collecting, storing, and analyzing the data in real-time are the most important factors to improve overall effectiveness.

As you can see, OEE plays a major role in improving the overall factory throughput, helps manufacturers save more, and compete in this ever-changing market. Smart factories, IoT, and monitoring systems are the future of the manufacturing industries. They help small and medium-scale industries grow at a rate comparable to that of larger-scale industries. Now is the time to embrace it and start monitoring it in real-time with an industrial monitoring system.


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  • P. Clarke, “OEE and Why It’s Important,” SL Controls, 18 06 2021. [Online]. Available:

By Published On: July 6, 2021