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In order to manage short lead times of order fulfillment, meet cost targets, handle the pressure on budgets, and the demands to quality, the right priorities must be set. But where to start and what to do? This blog series is about the fundamentals of OEE. We will answer the 10 most important questions around the subject of OEE and give an insight into the possibilities it offers.

10 things everybody should know about OEE
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Question number 5:

## 5. OEE calculation: how is OEE calculated?

The basis of OEE calculation seems quite simple: There is a theoretical maximum capacity on the one hand and the actual output on the other. OEE shows the difference between the two.

 Availability Actual production time Potential production time X  Performance Actual output Theoretical output X  Quality Good product Actual output

The OEE calculation poses three questions:

1. Is the machine operating or not?
However, when the machine is operating, it’s still unsure if the product whether of good quality and what the speed of the machine is. The availability rate indicates the relationship between the theoretical operating time and the actual operating time.
2. When running: How fast is the machine running?
The theoretical output differs from the actual output. But even when the machine would run at the theoretical maximum speed, it is unsure whether the machine produces good quality products. Therefore, OEE measures the performance rate.
3. How many products have met the specifications?
When time and speed losses are measured, the focus is on quality. Where the performance rate includes all output (good products and rejects), the quality rate is the relationship between the number of products produced in total and the number of products that meet the quality specifications.

100% OEE is the theoretical maximum
capacity of the machine

In this example, the OEE calculation gives us an OEE rate of 57% = (360/480) × (2880/3600) × (2736/2880) × 100

The OEE is calculated by multiplying the availability rate, performance rate, and quality rate:

#### OEE = availability × performance × quality = (B/A) × (D/C) × (F/E) × 100%

 Availability = B/A = 360 / 480 = 75% Performance = D/C = 2880 / 3600 = 80% Quality = F/E = 2736 / 2880 = 95%

#### OEE = 75% × 80% × 95% = 57%

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