Whatever kind of business you operate, you want the equipment you use to be as effective as practical. Businesses measure overall equipment effectiveness by multiplying the equipment's availability rate, performance rate and quality rate. Companies employ the OEE when they analyze strengths and weaknesses in their production model. The OEE also demonstrates how much improvement can be implemented, if any.

## Calculate OEE

Determine the equipment's overall availability rate by dividing the actual operating time by the planned production time. For example, if the equipment was operating for 400 minutes and the planned production time was 500 minutes, your availability rate would be 400/500, or 80 percent.

Calculate the equipment's overall performance rate by dividing the ideal cycle time by the actual cycle time. Cycle time is the amount of time it takes to produce one piece. For example, if your ideal cycle time is 100 pieces per minute and your actual cycle time is 75 pieces per minute, your performance rate is 75/100, or 75 percent. Determine the actual cycle time by dividing the actual number of pieces produced by the actual amount of time it took to produce them.

Establish the overall quality rate by dividing the number of good pieces produced by the total number of pieces produced. For example, if your equipment produced 400 pieces but 20 of the pieces were defective, that would mean that of the 400 pieces, only 380 were good. Divide 380 by 400 to find that your equipment quality rate is 95 percent.

Multiply the availability rate by the performance rate by the quality rate. The product of the three numbers is your overall equipment effectiveness, or OEE. Using our example, this would mean multiplying 0.8 (Step 1) by 0.75 (Step 2) to get 0.6. Then multiply this result by 0.95 (Step 3) to get 0.57 or 57 percent, which is the equipment's OEE.