What is OEE (Overall Equipment Effectiveness)?
A manufacturing metric that measures equipment productivity as a percentage combining availability, performance, and quality.
Definition
Overall Equipment Effectiveness (OEE) is the gold standard metric for measuring manufacturing productivity. OEE combines three factors: Availability (actual run time vs planned production time), Performance (actual speed vs ideal speed), and Quality (good parts vs total parts). OEE = Availability x Performance x Quality. An OEE of 85% is considered world-class for discrete manufacturing. OEE helps identify the biggest sources of manufacturing inefficiency (downtime, slow cycles, or defects).
How OEE Works in ERP
OEE data is typically captured by MES systems on the shop floor and integrated with ERP for reporting and analysis. ERP uses OEE data for capacity planning, maintenance scheduling, and production costing. Some ERPs with built-in MES (like Epicor Kinetic) can calculate OEE natively.
ERP Vendors with Strong OEE
Frequently Asked Questions
What is a good OEE score?
An OEE of 85% is considered world-class for discrete manufacturing. 60% is typical. Below 40% suggests significant improvement opportunities. OEE should be tracked over time rather than as an absolute benchmark.