Definition
An indicator that measures equipment utilization efficiency by combining availability, performance, and quality.
In detail
Overall Equipment Effectiveness (OEE) is a metric that measures the actual utilization efficiency of equipment, calculated by multiplying availability, performance, and quality. It is used to identify the six major equipment losses (breakdowns, setup/adjustment, small stops, reduced speed, startup losses, and defects/rework) and to guide improvement priorities. Unlike single-point metrics, OEE comprehensively reflects time, speed, and quality losses and is the core metric for TPM activities. The DBS convention reports it as a chain of piece counts (loaded → down → running → target output → actual output → good pieces); a waterfall chart that peels away losses from calendar time down to valuable operating time is the JIPM/third-party textbook convention, and the two should not be mixed.
Example in practice
An injection molding workshop had an OEE of only 65%. Through decomposition, they found that availability loss mainly came from frequent mold changes, performance loss from equipment speed below design value, and quality loss from a large number of defective products during startup. They implemented SMED for mold changes, reducing changeover time by 50%; adjusted equipment parameters to restore speed; and optimized startup procedures to reduce scrap. Three months later, OEE improved to 80%, alleviating the capacity bottleneck.