What is OEE in manufacturing?


OEE stands for Overall Equipment Effectiveness. OEE is computed by multiplying machine availability, process efficiency and product quality. 

In manufacturing, the OEE metric is used by different teams for a variety of objectives. On the manufacturing shop floor, for instance, OEE is used to identify lagging processes. Business executives on the other hand may use aggregated values to monitor the overall performance of their manufacturing business. In addition, OEE is used as an indicator to evaluate the need to modernize equipment, i.e. to justify CAPEX investments and to monitor the return on invested capital (ROIC). In this instance, OEE is used as the metric for sweating assets.