OEE (Overall Equipment Effectiveness) measures which fraction of planned production time becomes good output at the equipment's ideal speed. It multiplies three factors (availability, performance and quality), condensing the losses of a machine or a line into a single percentage. ISO 22400-2 standardises it as a manufacturing KPI.
What OEE is and how it works
Formalised by Seiichi Nakajima within TPM and standardised in ISO 22400-2, OEE quantifies the six big losses: breakdowns, setups, micro-stops, reduced speed, defects and startup scrap. Availability captures downtime, performance captures speed losses and quality captures rejects. Because the factors multiply, three seemingly healthy 90 % values yield a 72.9 % OEE.
For an industrial SME its value lies in the decomposition: it shows where lost time is buried and which improvement to attack first. Measuring it needs only three signals (run/stop state, piece counter, reject counter) often already available in the line's PLC or SCADA, or, in a machine shop, published by the machine tools over MTConnect. It is the usual starting point of an operational diagnosis.