Fasteners and Class C Component Supply

Falcon supplies fasteners and inventory management services to manufacturers in North and South Carolina, Kentucky, and the surrounding areas.

Charlotte Office

10715 John Price Road
Charlotte, NC 28273

Phone: 800.438.0332

Mobile: 704.588.4740

Mailing Address

P.O. Box 7429 | Charlotte, NC 28241-7429

Phone: 704.588.4740

Fax: 704.588.5753

Kentucky Office

11536 Commonwealth Drive
Louisville, KY 40299

Phone: 502.266.6292

Fax: 502.526.5567

How to Calculate Overall Equipment Effectiveness (OEE)

The equipment you use to build your products plays an integral role in production, and if anything isn’t delivering high-quality results it can drag down your entire operation. Thankfully, there’s a formula that can help you measure overall equipment effectiveness (OEE) so you can more easily manage your factory floor. OEE allows you to measure the quality of your production process and makes it easy to see how much room you have for improvement.

How does OEE help production?
By measuring the OEE, you will know how well various processes are working. The OEE score paints a clear picture of the quality of parts being produced, the time it takes to make them and down time. Ideally, you want a score of 100 percent, because this means the equipment is turning out only good products as quickly as possible, and there is no down time during production, according to While it’s good to aim for this benchmark, odds are you won’t achieve 100 percent compliance, which is why an OEE score of 85 percent is a solid goal to set for your company. Most companies that are already making lean manufacturing efforts can expect a score around 60 percent, while you may find you’re only operating at 40 percent if you’re just starting to make changes. The source pointed out that while this number is low, you can target and repair problems such as down time that will help bring the score up rapidly.

How do you calculate OEE?
To determine OEE, you need to multiply three different factors – availability, performance and quality, so your formula will look like this: OEE = Availability x Performance x Quality​. Each factor in the equation is designed to pinpoint issues like down time, speed loss and quality loss. They can be determined by comparing the actual and the ideal with the following equations.

  • Availability = Operating time / Planned production time
  • Performance = Ideal cycle time / (Operating time / Total pieces)
  • Quality = Good pieces / Total pieces

For the best results, you should calculate the OEE score of the process’s constraint point. By honing in on a bottleneck in your production, you’ll be able to make positive changes that will affect the entire operation.

What other factors should you consider?
The OEE equation can also be looked at as OEE = (Good pieces x Ideal cycle time) / Planned production time, which is essentially measuring the amount of quality pieces that can be produced in maximum theoretical speed and comparing it to the ideal output. A ratio of 1:1 would be ideal, as you’d be doing exactly what you set out to do. However, you need to take external factors into consideration, such as employee productivity levels, inventory stock-outs and equipment malfunctions.

Vorne Industries pointed out that it’s important to include changeovers when accounting for availability, as the amount of time it takes to replace operators between shifts could be an area of improvement, but you won’t know if you don’t factor it in. It’s also important to look at the number as a guide to help you make improvements rather than simply tracking the number itself. If your score is lower than you’d like, you’ll have to circle back to the availability, performance and quality metrics to determine which could stand to be improved upon. From there you’ll be able to strategize options that can bring up the OEE.

When it comes to lean manufacturing, every aspect of operations plays an important role, from reducing lead times and managing inventory to quality control and equipment effectiveness. By paying close attention to OEE on your factory floor, you’ll be able to pinpoint problem areas and address issues that could be dragging down your score.

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Reliable Stock™ Lean VMI Solutions by Falcon

Falcon’s Reliable Stock™ lean VMI program delivers 100% production uptime efficiency and reduces your lead times, while lowering your overall inventory investment in class C production components and fastening supplies. Download the Reliable Stock™ brochure today to find out how you could be saving time and money.
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2018-01-04T13:56:07+00:00 March 4th, 2015|Categories: Lean Manufacturing, Risk Mitigation|

About the Author:

Aaron is the Marketing Director at Falcon Fastening Solutions, Inc. He is focused on sharing Falcon's unique approach to fastening and class C production component supply chain solutions with equipment manufacturers.