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Benchmarking and Evaluating OEE

Overall Equipment Effectiveness, OEE, is a metric that pinpoints productivity and efficiency in manufacturing operations by comparing true productive time and planned production time. To determine how productive an operation is, it combines three main metrics: availability, performance, and quality.

As a benchmark and evaluating tool, it can be used to compare the performance of production within the industry or in-house. OEE is also used to track data and progress over time to help eliminate waste from an operation.

Evaluating and Measure OEE

What exactly is a good OEE score? Just like tests or exams in school, the best score you can receive is 100%, but that doesn’t happen very often. A score of 100% means that a facility is maintaining absolutely perfect production- no stoppage time, no back-ups, no mistakes. Perfect isn’t always practical.

A score of 85% is considered “world class” and is a more achievable goal than a perfect score. World class or best in class performers have high efficiency in all areas of availability, performance, and quality.

The most common OEE score is 60%, meaning that an operation is only productive 60% of the time.

Laggards are the lowest tier of manufacturers. A score between 30% and 50% indicates extremely low productivity levels which could be caused by downtime or equipment performances.

Minor Stop Index

The minor stop index is a vital metric that measures the number of minor stops per hour that last 10 minutes or less. On average, a production line experiences almost 9 stops per hour (that equals to roughly 7 minutes per hour of downtime!).

Contrary to popular belief, the best in class performers are responsible for more minor stoppage than others. This is because world class performers have put in the time and resources to solve major issues that minor ones, like bottles breaking or label jams, take up most of their time.

Minor stops are the most common problems in the industry that consistently need time and attention.

Improving OEE

The best way to improve overall equipment effectiveness is to identify all problems in your operation. You can’t solve any issues until you’ve found the root of the problem!

According to the Manufacturing Benchmark Study by Informance, best in class performers knew where 99% of their day went, while laggards had no idea where 16.2% of the went! This statistic is alarming to say the least. For more perspective, laggard performers are unaware of where 9 minutes of every hour goes. It’s impossible to improve OEE without identifying the key problems in your operation.

Focusing on reducing short, minor stops will help boost availability in equipment. Availability is a vital metric because it is a critical indicator that most affects OEE improvements.

You can be the best in class

It’s time to raise the bar and become a world class performer. Prevent shutdowns, reduce changeover, and eliminate equipment downtime with our team at Thrive. Our Downtime Tracking System provides real-time data and reporting to aid in increasing efficiency and meeting production goals!

What are you waiting for? Are you ready to Thrive? Schedule a free demo and take the first step to becoming world class!

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Equipment Downtime Tracking and Collection System – Thrive DCS


Thrive Downtime Collection System is a web-based solution that can integrate with your line in a matter of hours. Saving time and increasing the reliability of the report, Thrive enables you and your team the ability to analyze reports on any web-enabled computer anywhere in the world. With Thrive’s Downtime Collection System, not only is the entry time 3-times faster than manual tracking, your company can see an increase in efficiency as much as 10-15% in as little as 6 weeks!

Want to try it for yourself? Visit Thrive and sign-up for the free trial and start eliminating downtime today:

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Everyone Wins with Optimized Utilization


“We get our work done but we’re not sure how much time is spent on the job.” Does this sound familiar? In this video Jim Rossini, Vice President of nGROUP, discusses utilization issues, such as lost resources and wasted time, and how Thrive and their tracking software provided cost-effective downtime solutions.

With the implementation of Thrive’s Downtime Technology, Jim’s team can accurately pinpoint waste associated with downtime. In turn their company has higher utilization numbers, higher profit numbers and higher productivity numbers.

To see what Thrive’s Downtime Technology can do for your team’s operations and utilization management, please visit:

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OEE Metrics

Measuring overall equipment effectiveness (OEE) has become the ideal way for determining how much of the manufacturing time is productive. By eliminating downtime, increasing production and improving product quality, measuring OEE has become crucial for companies focusing on lean manufacturing.

But just how exactly do you calculate OEE? There are three main metrics that determine OEE: availability, performance and quality.

This is the amount of time your equipment is running during a scheduled shift, taking into account all planned and unplanned stops during production time. When calculating availability, a score of 100% means production never stops, which is ideal in lean production.

To calculate OEE availability, use the simple equation:
Run Time/Planned Production Time

The amount of stops and idle time your production system has determines your performance score. A score of 100% means that production is always running at max speed. To calculate OEE performance, use the equation:
Actual Production/Ideal Production

While availability and performance measure how fast and how often your manufacturing process is working, quality measures how many usable parts are being produced. It’s ideal to have 100% of parts usable at the end of production.

To determine your quality score, use the equation:
Good Parts/Total Parts

Putting it All Together
Once you have measured availability, performance and quality, calculating your OEE score can be accomplished with the following equation:
Availability x Performance x Quality = OEE

A score of 100% means that all parts of the manufacturing process are running efficiently at all times.

But what if your score is not 100%? What if you discover that your production process is not very efficient at all?

By measuring all parts of the manufacturing process individually, calculating OEE helps you see which areas of the manufacturing process need improvement. If you are producing quality parts, but do so at a slow rate, you know that you need to improve performance. If machines are constantly running, but half your parts are not usable, you know that you need to focus on improving quality.

That is what makes OEE metrics so valuable. In addition to showing how efficient your manufacturing process is, it also shows you which areas can be improved upon.

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Frequently Asked Questions: OEE

What is OEE?
OEE stands for overall equipment effectiveness and is the best standard for measuring the effectiveness of any manufacturing process by identifying how much of the manufacturing time is productive.

What determines OEE?
Three factors are measured when determining OEE: availability, performance and quality.

What is availability?
Availability shows how efficient production is during planned production time. It considers all equipment failures (unplanned stops) as well as setup and adjustments (planned stops). A score of 100% means production never stops.

What is performance?
Performance is the measurement of idle time and small stops. If performance is at 100%, then production is always running at max speed.

How is quality determined?
Quality is determined by subtracting the number of defective parts that are produced from the number of quality parts that are produced. A quality score of 100% means that none of the parts produced need to be scrapped or repaired.

How can I determine my OEE?
Overall OEE can determined through the simple equation:
Availability x Performance x Quality = OEE
In order to execute this equation, you must also determine the percentages of your availability, performance and quality.

How can I determine availability?
To determine availability, use the equation:
Run Time/Planned Production Time = Availability

How do I determine quality?
To determine quality, use the equation:
Good Parts/Total Parts = Quality

How do I determine my performance score?
Performance can be determined by using the following equation:
Actual Output / Standard Output

What events hurt my OEE score?
Production slowdowns and stoppages, along with quality rejections, are obvious. Other events such as shift changes and lunch breaks can have a negative impact if you are expecting to have production continue during those times.

Does shutting down the plant have a negative effect on OEE?
No. Plant shutdowns (including holidays and time periods where there are no shifts scheduled) are not included in determining OEE.

What are the most common ways production is lost?
There are six main ways production is reduced. Commonly referred to as the six big losses, they include: unplanned stops, planned stops, small stops, slow cycles, production rejects and startup rejects.

How can tracking OEE help my company?
By tracking your OEE, you will be able to see which areas of production are running efficiently and which areas need improvement. This will allow you to focus on improving those areas, which will  increase your OEE score and level of production.

What is TEEP?
TEEP stands for total effective equipment performance and measures the maximum amount of production capable of being produced.

What is the difference between OEE and TEEP?
OEE measures the amount of time you are productive during planned productive time and TEEP measures the maximum capacity that you can manufacture if you operated 24 hours a day, 7 days a week. In other words, TEEP shows you how much your operation could potentially produce if it runs non-stop.

How can OEE be improved?
There are multiple ways OEE can be improved, but the most popular way is through lean manufacturing.

What is lean manufacturing?
Lean manufacturing strives to reduce processes that add no value to the product being built. This means cutting out unnecessary stops and idle time. OEE was created as a way of improving lean manufacturing.

How can I use OEE to my advantage?
The best way to use OEE to your advantage is to fix the troublesome areas of the manufacturing process. To do this, you need to identify the trouble areas, determine how to fix them, and execute that plan. Once the problem is resolved, your OEE score will improve and so will your production.

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Optimizing the Manufacturing Process with OEE

Overall equipment effectiveness (OEE) can be one of the most helpful tools for boosting manufacturing processes and reducing unplanned manufacturing downtime. It is one of the key performance indicators (KPI) for progress being made on shop floors in terms of increasing equipment availability, higher performance rates of equipment and enhanced production of qualified goods. If a manufacturing facility can track OEE in a standardized and impartial manner and make appropriate adjustments, then the ensuing OEE score will significantly aid total productive maintenance (TPM) initiatives. These results will lead to an increase in profits and a positive work environment.

OEE is not just a methodology to track underperforming processes and equipment. It’s also a way to end the blame game in the workplace. OEE tracking can help you assess snags in the production line and understand why those complications are occurring. Using numbers and percentages, the assessments are free of opinions and prejudices and explain if underperforming machinery is due to unplanned manufacturing downtimes or performance issues during production. OEE can also pin-point whether the machine operator is wasting too much time in idling and process changing or is losing time due to lack of skill or training. OEE also gives you a clear picture about the quality performance of manufactured goods and if time and resources are being wasted due to the production of unsellable products.

Overall equipment effectiveness ratios give you the opportunity to improve at every stage. Production can be increased by specifically working on problem areas without having to revamp the entire production line. From scheduling timely maintenance routines to retraining operators, everything can be streamlined without affecting other processes.

How OEE Assists You

OEE gives you the power to understand the three most important things that affect output on the shop floor:

Availability Rate: Equipment Availability and Actual Operating Time (Planned Operating Time–Downtime)/Total Planned Operating Time=Availability

Here, availability rate brings out the downtime loss.

Performance Rate: Actual Productivity of the Equipment (Number of Goods Being Produced in a Shift)/Potential Productivity of Equipment (Number of Goods Expected to be Produced in a Shift) =Performance

Here, performance rate brings out the speed loss.

Quality Rate: Number of Qualified Goods Produced in the Shift/ Number of Total Goods Produced=Quality

Here, quality rate brings out the quality loss.

Overall equipment effectiveness is the cumulative result from the product of these three factors. The higher the OEE percentage is, the higher the productivity becomes and lower the manufacturing downtime goes. A higher OEE percentage encourages lean manufacturing thanks to efficient management of resources and reducing lost time and resources. If these three types of waste are managed properly, the system can be made leaner and highly optimized.

Increasing OEE Percentages

For a higher percentage of OEE and eventually achieving lean manufacturing, it is important that the manufacturing units take a few basic initiatives.

Train and Retrain Your Employees: This is one of the most significant steps for achieving a higher OEE percentage. A bad or unskilled employee will never yield high productivity and your OEE calculations will remain below satisfactory. Training and retraining your employees not only keeps them acquainted and updated with the machinery and new technology, but also keeps them familiar with your expectations, which keeps them motivated. Your employees must know the importance of OEE and its contribution to the production line so that they can also contribute to the process.

Standardize Your Measurements: From one unit to another, the parameters for what is important can differ and make comparisons and correlations difficult. Measurements should always remain the same so that comparative performance analysis becomes easier for everyone to understand.

Bring Automation to Your Tracking: In this fast-paced world, waiting for exact OEE results will kill the sole purpose of employing an effective overall equipment effectiveness strategy. You need to know which section is struggling in real time so that problems can be prioritized and addressed properly. Automating your OEE tracking will give concerned departments a chance to analyze simplified data in real time so that problems can be addressed in real time. This will reduce manufacturing downtime and increase productivity.

Overall equipment effectiveness calculations are the easiest way to reduce losses and increase productivity. A great OEE score will make your manufacturing process leaner while also cutting down on manufacturing downtime. Instead of trying to understand complex numbers, your work will become easier and synchronized while also infusing a positive attitude on the shop floor thanks to clearer job responsibilities that hold employees accountable for their tasks.






Understanding Lean Manufacturing

Lean manufacturing has some of the most revered principles in the production industry. Managers want to incorporate these principles into company culture and processes because of the potential for excellent results and increased production.

There are two main thoughts on exactly what lean manufacturing is. Some see it as a way of eliminating waste in the production line. Others see it as achieving economical perfection through workplace organization and working methodologies in an orderly manner.

The fact is, lean manufacturing is both of these ideas, and a whole lot more.

What is Lean Manufacturing?

Lean manufacturing is a systematic approach that aims at adding value to consumer products while lowing the cost of manufacturing. Lean manufacturing strives to attain order, standardization, discipline and respect at the workplace, while also maintaining safety. Using tools such as TPM, OEE, 5S techniques, and others helps eliminate waste during production, which maximizes profits.

Simply put, lean manufacturing produces high quality goods in a shorter time, all while adding value to the product. This process aims at maximizing profit by eliminating waste, not by increasing prices.Hence, customers get a better quality product for a great price.

Reducing Waste in the Manufacturing Processes

This is one of the most important parts of being lean. That’s why lean manufacturing focuses on identifying waste in all aspects of production. Items that are eliminated during lean manufacturing, include:

  • The use of needless tools and equipment
  • Overuse of manpower
  • Unnecessary processes that are time-consuming for workers and equipment that lead to idle workers and machines.
  • Delaysduring production
  • Waste produced by faulty products
  • Lost labor, time, money, management and resources by rectifying troubled areas of production.
  • Unnecessary inventory loads in the production house
  • Over production caused by first producing and then creating an artificial demand. This is done by studying supply and demand needs.

Adding Value to Products

Lean manufacturing places great emphasis on adding value to products. Value can be added by producing the desired quantity of products and delivering them on time without deteriorating the quality. By synchronizing the production cycle, quality products can be delivered using the same costs but with higher profit margins thanks to waste elimination and lower inventory costs. This allows the consumer and producer to come out winners.

Creating an Organized and Safe Workplace

A clean workplace is vital to ensure safety. A clean workspace that is free of obstructions reduces the chances of accidents, while also invoking a positive work environment. The workforce is trained and inspired to strive for cleanliness and orderliness so that problems can be detected quickly and resolved, which results in less downtime.

Reduce Unplanned Downtime and Frequent Breakdowns

Applying equipment effectiveness techniques to detect problems in real time is a great way to reduce unplanned downtime. Lean manufacturing aims at studying why frequent downtimes occur and then eliminating the causes. This leads to a better overall equipment effectiveness score because of less downtime and higher productivity.

Lean manufacturing is a broad concept with simple principlesthat make the production process more efficient. It allows companies to become more consumer-friendly by producing higher quality products more quickly and at the same cost.