Dictionary · Manufacturing
OEE
Overall Equipment Effectiveness (OEE) is the fraction of scheduled production time that is truly productive, computed as the product of three rates: Availability (did it run?), Performance (at rated speed?) and Quality (right first time?). It is standardised in ISO 22400-2 and traces to Seiichi Nakajima's work on Total Productive Maintenance.
OEE = Availability × Performance × Quality
Because OEE is a product of three rates — not an average — a dip in any one component drags the whole number down. Nakajima's “world-class 85%” isn't a rounded target: it's what falls out of 90% × 95% × 99%, three already-excellent numbers multiplied. A line that feels fine can honestly score in the sixties.
Sources: Nakajima (1988) · ISO 22400-2:2014 · Hansen (2001)
Reading it on the floor
How to read it
OEE is a compass, not a scoreboard. Never quote it without its three components: two lines can both read 65% for opposite reasons — one starved for materials (an Availability problem you fix with scheduling), one quietly making scrap (a Quality problem you fix upstream). Same number, opposite action.
First lever
Decompose before you act. Whichever of the three rates is lowest names the conversation you have first: Availability → scheduling and changeover discipline · Performance → micro-stops and honest rated speeds · Quality → upstream control, not more inspection.
The trap
Averaging OEE across lines, shifts or products destroys the signal. It is a product within a line, and it stays decomposed or it stops meaning anything.
See the three rates drive the number live (sample data) →
Full field note: what OEE actually measures →
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