OEE: The Fundamental Indicator of Industrial Performance
Overall Equipment Effectiveness (OEE), the English equivalent of the French TRS (Taux de Rendement Synthétique), represents the first-level indicator that every manufacturing company should monitor. You have probably already noticed that many companies invest in new equipment while their current machines are underutilized. OEE allows precisely to objectify this reality in the context of manufacturing productivity.
The Three Pillars of OEE
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The Three Pillars of OEE
- 01
Availability rate
represents the proportion of time during which the equipment actually operates, relative to planned production time (excluding planned stops such as breaks or preventive maintenance).
- 02
Performance rate
(or efficiency): measures the actual speed of the equipment compared to its theoretical speed. A machine can operate without stopping, but at a reduced pace.
- 03
Quality rate
corresponds to the proportion of conforming parts among all produced parts.
This multiplication of three percentages explains why observed OEE values are often low. For example,
- A machine available 70% of the time,
- Operating at 80% of its nominal speed
- And producing 95% of conforming parts
Will have an OEE of only 53.2%.
What is the average OEE in your industry?
OEE vs TEEP: What are the Differences?
OEE (Overall Equipment Effectiveness) and TEEP (Total Effective Equipment Performance) are two distinct indicators that measure equipment efficiency from different perspectives.
The main distinction concerns the calculation of the availability rate:
- For OEE, planned stops (breaks, preventive maintenance) are excluded from the denominator
- For TEEP, total time is taken into account, including planned stops
Thus, for an 8-hour work shift including 1 hour of break, if the equipment operates for 4 hours:
- Its availability rate for OEE will be 4/(8-1) = 57%
- Its utilization rate for TEEP will be 4/8 = 50%
A Multi-Level Approach to OEE
One of the great advantages of Overall Equipment Effectiveness is its ability to be deployed at different scales:
Micro level: the individual workstation
OEE can be applied to any workstation, whether automated or manual. A welding station, manual assembly post, or CNC machine can all be analyzed with this metric.
At the individual workstation level, OEE helps identify:
- Frequent unplanned stops (breakdowns, adjustments, waiting for materials...)
- Pace discrepancies (voluntary or involuntary slowdowns)
- Recurring quality issues
Intermediate level: the production line
By aggregating OEE values from multiple workstations, we can calculate that of a complete line. This vision helps identify bottlenecks and concentrate improvement efforts where they will have the most impact.
A production line with an average OEE of 40% has a theoretical potential capacity increase of 150% without additional investment - a perspective often ignored by companies that prefer to purchase new equipment.
Macro level: the factory and the company
The concept can be extended to the entire factory level, or even the multi-site company. This level of aggregation allows:
- Comparing performance between different factories
- Establishing internal benchmarks
- Prioritizing continuous improvement investments
How to Effectively Measure OEE
Implementing an OEE measurement system doesn't need to be complex to be effective:
Methods for measuring availability
It is sufficient to know whether the equipment or workstation is running or stopped, and in the latter case, why. For modern equipment, this information can be captured via industrial communication protocols (OPC UA, MQTT...). For older machines, simple sensors (vibration detection, power consumption) can do the job.
Techniques for evaluating performance
Counting cycles or measuring production rate allows evaluation of performance against a standard. This can involve counting sensors, production data, or even manual records as part of optimized industrial performance.
Quality monitoring and its impact
This is often the most difficult dimension to measure in real-time, especially in processes where quality control is performed downstream. If access to this data is complex, it is perfectly acceptable to start with a partial OEE based solely on availability and performance.
Conclusion
FAQ on Overall Equipment Effectiveness (OEE)
What is the difference between TRS and OEE?
TRS (Taux de Rendement Synthétique) and OEE (Overall Equipment Effectiveness) are essentially the same indicator. The term OEE is used in English literature, while TRS is its French equivalent used in Quebec and in French-speaking countries.
Is an OEE of 85% realistic?
An OEE of 85% is considered excellent in the industry. World-class performance is generally around 85%, but the industry average is closer to 35-40%. It is important to set realistic goals based on your industry and your starting point.
How can I quickly improve my OEE?
Improving OEE involves identifying the main losses. Start by analyzing which of the three factors (availability, performance, quality) is most problematic, then focus your efforts on it. Generally, availability offers the quickest gains because stops are often easy to identify and reduce.
Does OEE apply to services or only to production?
Although traditionally used in production, the OEE concept can be adapted to services by defining equivalents for availability (productive time vs. total time), performance (service speed), and quality (customer satisfaction). This is particularly relevant in standardized service environments.
