What is OEE?
OEE (Overall Equipment Effectiveness) is the global reference indicator for measuring how efficient a machine or production line really is. It was developed as part of Total Productive Maintenance (TPM) and today it is a standard in manufacturing, mining, food and any industry with continuous processes.
Unlike other KPIs that measure only output or uptime, OEE combines three critical factors into a single number: Availability, Performance and Quality. This makes it possible to identify exactly where efficiency and money are being lost in the production process.
The OEE formula
OEE is calculated by multiplying its three main components:
Reference benchmarks
| OEE range | Rating | What it means |
|---|---|---|
| ≥ 85% | World Class | Optimal operation, an industry benchmark |
| 65% – 85% | Acceptable | Significant, identifiable room for improvement |
| < 65% | Low | Major losses, requires urgent intervention |
The six big losses of OEE
The OEE model identifies six categories of loss that erode the efficiency of any production equipment:
- Unplanned stops — unexpected failures and breakdowns that halt production
- Changeovers and adjustments — setup time, mold or product format changes
- Small stops — micro-stops and brief jams that add up
- Reduced speed — equipment running slowly due to wear or incorrect configuration
- Startup scrap — defective parts at the start of a shift or production batch
- Process defects — rejects and rework during normal continuous operation
How to implement OEE in your plant
There are two approaches: manual (Excel spreadsheets) and automated (connected to PLCs and historians). Manual implementation has serious limitations: it depends on the operator, has a delay of hours or days, and is prone to recording errors.
The most effective alternative is to connect PLCs and SCADA systems directly to an industrial Historian that calculates OEE automatically and in real time.
Step 1: Connect data sources
Establish communication with the PLCs through standard protocols such as OPC UA, Modbus TCP or MQTT. This guarantees independence from the equipment manufacturer and makes future integration easier.
Step 2: Define equipment states
It is essential to model the states clearly: Producing, Planned stop, Unplanned stop, Adjustment/Setup, Reduced speed. Without this precise definition, the OEE calculation will have no real value.
Step 3: Historize and visualize
With data flowing, the Historian stores every event with a precise timestamp. OEE calculations run in real time and are displayed on Grafana dashboards accessible from any device with a browser.
OEE vs TEEP
TEEP (Total Effective Equipment Performance) extends OEE by also considering the time when the equipment was not scheduled to produce. While OEE measures efficiency of use, TEEP measures the total utilization potential of the asset.
For most industrial plants, OEE is the right starting point. TEEP is more relevant in operations under heavy installed-capacity pressure or when evaluating the need for new equipment investments.
Want to implement real-time OEE in your plant?
Grupo Salba has more than 15 years of experience implementing plant information systems with OEE, without proprietary licenses and with measurable results.
See the Historian I4 + OEE solution →