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Equipment is also the 'soul of the business': why should you measure the operational performance of your machines

07 December 2021
Article by Beatriz Ribeiro, consultant, and Regina Paiva, trainee consultant in Industrial Engineering and Management at INEGI.

Working as efficiently as possible is one of the safest bets for a company to increase its competitiveness. When we talk about production management, efficiency is linked to an important metric – often overlooked! – which allows you to identify losses, assess progress and improve the productivity of equipment: the operational performance of an equipment (OEE).

Known as Overall Equipment Effectiveness (OEE), this is a performance indicator (KPI) that indicates the overall operational performance of a machine, equipment, production line, or factory. In other words, it indicates the percentage of production time in which you are fully productive, being negatively affected by events that do not add value.

Indicator assesses 3 factors - availability, performance and quality

Availability is the relationship between the actual time the equipment has been working and the total time available for use. This downtime can be classified as planned (eg maintenance schedules and lunchtime), or unplanned (eg lack of raw material and machine failure).

In general, downtime, both planned and unplanned, can be reduced by reducing the average repair time – Mean Time To Repair (MTTR) and increasing the time between failures – Mean Time Between Failures (MTBF), respectively .

Performance, on the other hand, is the ratio between theoretical and real time to manufacture a certain amount of parts. In other words, it is a measurement parameter between real production time and production time at a standard speed. Consequently, performance failures refer to when the machine works below maximum speed or pace.

The correct measurement of performance, obtained by keeping accurate records of production and availability, influences other calculations, namely the cost of the product, the occupation of the factory (machine load), among others.

Quality is the relationship between the production time of the actual number of pieces that meet the quality criteria, and the production time of the total number of products manufactured in the same time interval, which should correspond to the fully productive time.

The operational performance of an equipment is expressed as a percentage from 0 to 100, where 100% is equivalent to the utilization of the equipment's full capacity, that is, the maximum operational performance.

The higher the percentage of OEE, the less downtime there was (availability), the more it was produced (performance), and with the greater number of compliant parts (quality). As it is extremely difficult to achieve 100% OEE, the industrial average is around 60%, while 85% is considered a world-class OEE.

If you need more reasons not to neglect this analysis, be aware that there are proven examples that a 10% improvement in the operational performance of a piece of equipment leads to an increase of up to 30% in productivity.

There are several ways to improve this indicator, one of the main ones being the availability of information, preferably in real time. A scoreboard with an indication of the objective, the quantity still to be achieved, and a reference to the percentage of efficiency, for example, would allow the team to understand the state of production of the production and act accordingly. This and similar techniques are a form of Visual Management on the shop floor. Team meetings, with a daily frequency or even for each shift, are also strategies to encourage interaction with the team and provide space for proposals for improvement actions.

There are also other best practices, usually more related to the topic of availability. Among them, the Single Minute Exchange of Dies (SMED – very useful in reducing setup times), the 5S (with clear advantages in organization and cleaning and currently there is talk of the 6S in order to consider security) and autonomous maintenance ( having benefits through the responsibility of the operator for the equipment, in addition to the production process under his responsibility).

10% improvement in performance can lead to 30% increase in productivity

Improvement projects are often left in the "drawer", for lack of knowledge of the profit that this action would bring to the company. But only when we know in depth the performance of the plant's equipment, it is possible for us to trace a path to improve its performance, and thus increase production efficiency and yield2. Let's see the conclusions we can draw from this evaluation:

Performance of a factory as a whole
The first OEE measure can be compared with future values, allowing data to be updated, defining responsibilities and objectives, establishing production goals and, above all, motivating teams to achieve the expected results.

Evaluation of a production line/machine and identification of the cause of problems
Can be used to compare line performance across the entire plant or the worst performing machine.

Effectiveness of equipment and/or production line
Once you know where you can improve operational performance, it allows you to indicate where to focus your efforts. The objective is to reach larger volumes with good results and, at the same time, reduce the practiced production costs.

Finally, although this indicator is normally seen as a tool that provides data for strategic decision-making, it is also increasingly used for the knowledge and interconnection of managers to the shop floor. It allows:
  • Access to the actual capacity of the factory in response to demand, deciding whether to buy or exchange a particular machine, whether to expand/reduce the factory or production lines, as well as the need to increase/reduce the number of shifts.
  • Knowing the actual use of equipment and where to apply resources effectively, maximizing profit in the planning and budgeting process.

There are factors, such as the age of the equipment, that affect the percentage of OEE and, consequently, can cause the OEE target to vary between processes. In this case, you can combine OEE with other metrics to get a broader view of production.

There are many benefits that this indicator brings to a company. However, without connecting managers' objectives to shop floor operations, this indicator will not be able to generate value. In this sense, it is necessary to assess current operating performance, identify losses, define priorities, establish a common focus and take the necessary actions, with the involvement of all employees.


1 Relkar,A.S.& Nandurkar,K.N. (2012). Optimizing & Analysing Overall Equipment Effectiveness (OEE) through Design of Experiments (DOE). Volume 38. Science Direct. Elsevier. [Consultado a 09/02/2021]. Disponí

2 Singh,R.; Shah,D.B.; Gohil,A.M & Shah,M.H. (2013). Overall Equipment Effectiveness (OEE) Calculation–Automation through Hardware & Software Development. Volume 51. Science Direct. Elsevier. [Consultado a 09/02/2021]. Disponí

Innovation Operation Excellence. (2019). Understanding overall equipment effectiveness (OEE).IntechOpen Limited. [Consultado a 08/02/2021]. Disponível em:

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