How to Improve OEE in Manufacturing? 7 Ways to Boost Efficiency
The OEE metric describes production efficiency and directly shows how effectively an organization’s resources are being utilized. The principle is simple: the higher the OEE, the better. High operational efficiency means better quality, fewer downtimes, and ultimately fewer unnecessary costs. Regardless of a company’s business goals, improving OEE is a topic that regularly comes to the forefront, as every decision made in production affects this metric. In the guide below, we present 7 effective ways to improve OEE in production.
What is the OEE metric, and why is it so important in manufacturing?
The OEE (Overall Equipment Effectiveness) metric describes the total effectiveness of a plant’s equipment—that is, the extent to which a manufacturer utilizes the potential of the company’s resources. OEE consists of three parameters: availability, performance, and quality.
The OEE is calculated using the following formula:
OEE = availability × performance × quality × 100%
| Parameter | Meaning | Negative impact |
|---|---|---|
| Availability | Actual vs. planned operating time | Breakdowns, changeovers, downtime |
| Performance | Actual vs. nominal speed | Micro-stoppages, speed losses |
| Quality | Compliance with specifications | Defects, rework, scrap |
What OEE is considered good? The following levels of this indicator are generally accepted:
- 100% OEE – the ideal level (practically unattainable under real-world conditions). Maximum OEE means producing only conforming products at maximum speed and without any downtime.
- 85% OEE – the so-called “world-class” level, which serves as a long-term goal for many companies.
- 60% OEE – a typical range for many manufacturing plants, indicating significant potential for improvement.
- 40% OEE and below—this value is often reported by facilities that are just beginning to measure and improve their production efficiency. This is a low result, which in most cases can be relatively easily improved through simple measures.
Why is the OEE metric so important for manufacturing facilities?
A high OEE indicates that the efficiency of the machines and the entire production process is at a high level. Improving OEE translates to:
- better utilization of resources,
- reduction of losses and breakdowns,
- process stability and production predictability,
- increased production line efficiency,
- lower costs,
- greater competitiveness,
- greater reliability in the eyes of business partners.
Companies that consistently take steps to increase OEE are able to scale production and respond more quickly to market changes.
What is the most common cause of a decline in the OEE rate in manufacturing facilities?
The most common causes of a decline in the OEE are well described in the “Six Big Losses” model, which identifies six major sources of production losses. These include: unplanned downtime, planned downtime, micro-downtime, slow cycles, start-up scrap, and production scrap. The three areas that have the greatest impact on production efficiency are: unplanned downtime, micro-downtime and speed drops, and quality issues.
Unplanned machine downtime
Unplanned machine downtime reduces a key OEE metric: availability. This refers to situations where a production line stops unexpectedly—most often due to breakdowns, technical errors, material shortages, or organizational issues.
When it comes to production efficiency, one must consider the cascading effect of downtime – the stoppage of a single machine can impact the entire production line’s output, causing delays and additional losses resulting from restarting. It may therefore turn out that the greatest losses in a plant do not result from single major breakdowns at all, but from repetitive, shorter downtimes.
Minor stoppages and drops in production speed
Micro-downtime and drops in production speed reduce machine efficiency. Unlike major breakdowns, these are harder to detect because individual incidents last only a very short time—sometimes just a few seconds. The causes may include minor disruptions such as material jams, momentary operator errors, sensor issues, or unstable process parameters. However, the cumulative effect of these events over a shift or a day can lead to a significant drop in productivity. After each micro-downtime, the time required for the machine to return to full capacity must also be accounted for.
Why are micro-downtimes so important in the context of OEE? Primarily because many manufacturing facilities do not pay them sufficient attention, and without proper real-time OEE monitoring, micro-downtimes are often not even recorded. Machine operators do not report short stoppages, which means that OEE analysis does not reflect the actual level of losses.
Quality issues
Quality issues negatively impact the third parameter of the OEE metric, namely, they reduce quality. Every product that fails to meet requirements represents a loss—both in terms of material and time. The most common causes of quality issues include a lack of process standardization, improper machine settings, operator errors, and a lack of control over production parameters. Quality issues also generate additional losses in other areas. The need for corrections extends production time, reduces production line efficiency, and increases the risk of downtime. Additionally, costs associated with waste and customer complaints rise.
How to Improve Your OEE? 7 Proven Methods
OEE is influenced by many factors, which is why improving OEE is not the result of a single action, but rather the outcome of consistent efforts to eliminate losses throughout the entire production process—both from a technical and organizational perspective. Here are 7 proven methods that can effectively help achieve this.
How do digital systems help improve OEE?
Digital systems have a significant impact on improving OEE. In addition to production management tools such as MES systems, solutions for managing production staff, such as noSilo, are also of great importance. The software supports efficient plant operations by optimizing areas related to competencies, access to knowledge, and communication.
How does noSilo help increase OEE step by step?
- Faster onboarding and achieving expected performance levels. Standardized onboarding pathways and access to online training materials help new employees become self-sufficient more quickly. This reduces the number of errors, eases the team’s workload, and accelerates the achievement of target performance levels.
- Competency management and team flexibility. Digital competency matrices enable real-time monitoring of employee skill levels and rapid identification of competency gaps. This helps minimize downtime caused by staffing shortages and maintain production line continuity.
- Knowledge management and instant access to information. A central knowledge base eliminates the problem of searching for information. Employees have access to up-to-date materials at their workstations, which improves productivity and work quality.
- Digital communication and elimination of information chaos. Information reaches exactly those people it concerns, and every employee receives the relevant messages at the same time, which shortens response times to issues.
- TPM support. Digital machine checklists and real-time reporting of anomalies allow problems to be detected before they lead to breakdowns. Preventive maintenance reduces the risk of major downtime, increasing machine availability.
The OEE is the most important metric for measuring production efficiency. Improving it requires eliminating the biggest sources of loss – downtime, micro-downtime, and quality issues – through both technical and organizational measures. The noSilo digital system allows you to effectively organize areas related to process standardization, competency development, and improved communication. It is an excellent way to increase OEE in production without having to make costly investments in machinery.
FAQ
You can achieve a quick improvement in OEE by starting with simple measures, such as standardizing work processes, managing competencies, and improving communication. Once these fundamentals are in place, you can move on to more advanced steps, such as implementing OEE monitoring and data analysis solutions.
The benchmark OEE rate is 85%. This is a world-class level and represents a long-term goal for most companies. Many plants operate at an OEE level of around 40–60%, which indicates significant room for improvement.
A low OEE rate means that production is inefficient—there are frequent downtimes, drops in productivity, or quality issues. This results in wasted time, higher costs, and untapped potential of both machines and employees.
Bibliography:
https://mfiles.pl/pl/index.php/Wska%C5%BAnik_OEE;
https://www.leanproduction.com/oee/;
https://www.oee.com/oee-factors/;
https://evocon.com/articles/the-six-big-losses-in-manufacturing/.
For years, he has been working on how technology can genuinely support people at work—especially in production environments. He develops technologies and content that help companies shorten the onboarding time for new employees, better manage team competencies, and more effectively transfer knowledge.
In his writing, he combines the language of practice with an accessible style, showing that digitalization in factories is not just a trend but brings tangible benefits: lower turnover, higher quality, and greater efficiency. He draws inspiration from everyday conversations with clients and observations from production plants, ensuring that each article is grounded in the real needs and challenges of the industry.
