OEE — the formula and where it goes wrong
OEE = Availability × Performance × Quality. A simple product. The devil hides in every factor.
Trap 1: Planned downtime gymnastics
Plants regularly exclude 'planned' downtime from Availability — changeovers, scheduled maintenance, mould changes. Sometimes reasonable, often not. A planned 18-hour changeover is still 18 hours of no production. Excluding it flatters the number and hides the largest accessible opportunity.
Our rule: report OEE with and without planned downtime. Both are honest; showing only one is rarely honest.
Trap 2: Quality at the wrong gate
Where you count quality matters. Hot-end counts flatter the number; cold-end counts are closer to reality; pallet-level counts are closest to what the customer sees.
Our rule: report three quality numbers — hot, cold, pallet — and target the cold-end one.
Trap 3: Performance against a soft benchmark
Performance = actual run rate ÷ maximum run rate. 'Maximum' is often set at what the line is currently capable of, not what it should be.
Our rule: the Performance denominator is design rate or best recent sustained rate, whichever is higher.
Honest reporting standard
- OEE-with-planned-downtime AND OEE-excl-planned
- Performance denominator = design rate or best 90-day sustained rate
- Quality = cold-end pass rate, with hot and pallet as supporting
- Trend (4-week rolling) more than spot value
- Variance to plan with the top 3 contributors named in plain English