The Truth Behind World-Class OEE Targets

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By Peggy Fonrose - January 06, 2022

“World-class” usually means you’re the best of the best—but what does that look like in the manufacturing industry? In manufacturing, we look to overall equipment effectiveness (OEE) as our key measure of efficiency and productivity on the factory floor. But it’s more nuanced than you may think. 

Let’s take a closer look at the concept of world-class OEE. We’ll examine why world-class OEE targets need to be more variable depending on your industry and production goals, plus offer a new perspective on how to help your business thrive.

What Is World-Class OEE?

OEE is the ratio of fully productive time to planned production time. It measures three factors: availability, efficiency, and quality. The OEE formula is expressed as:

OEE = availability x efficiency x quality

Seiichi Nakajima introduced the concepts of OEE and total productive maintenance (TPM) in the 1970s, and in his 1984 book Introduction to TPM, he suggested four “world-class” numbers: availability of 90 percent, efficiency of 95 percent, and quality of 99 percent, yielding 85 percent (world-class) OEE. 

World-class OEE is near-perfect productivity for your factory floor, and to this day, manufacturers use world-class OEE targets as a benchmark. But these numbers are part of a broader OEE spectrum. A few stats you may know:

  • 100 percent OEE is considered perfect production

  • 85 percent OEE reflects world-class operations

  • 60 percent OEE is typical and average

  • 40 percent OEE is low but not uncommon

World-class OEE doesn’t necessarily mean perfection. In actuality, the metric could have different weights depending on your industry.

Why World-Class OEE Targets Aren’t Everything

When Nakajima introduced the concept of world-class OEE in the ‘70s and ‘80s, it had roots in the automotive industry, so 85 percent OEE was considered world-class in that industry. But every industry works a little differently and has unique needs. 

Download the OEE calculator Excel template to measure your operation’s overall  equipment effectiveness and determine production opportunities for improvement  >>>

Industry affects the standard.

World-class measures are defined by your specific industry. Realistically, 85 percent applies only to the minority of manufacturers. For most manufacturers, the 60 percent OEE average is more attainable.

Worximity is devoted to serving food manufacturers. Clients in food manufacturing are better able to hold themselves to world-class OEE standards than other manufacturers, with a typical range between 70-80 percent. We’re pleased that several Worximity clients are nearing the 85 percent mark. Tileconnect, Tile+, and Tilelytics products help them monitor, measure, and improve several aspects of their operations.

By contrast, however, OEE varies for mechanical, discrete, and plastics manufacturers. That’s because OEE in these industries factors in their specific machinery (e.g., CNC and welding machines) and the products they're making. 

World-class OEE could be bad for business.

There are times when a world-class OEE target is either unrealistic or unideal, simply because of how your operations work. Distinct differences exist between manufacturers of large and small product mixes, based on their target numbers for the individual aspects of OEE (availability, efficiency, and quality).

Large Mix

Large-mix manufacturers—also known as high-mix/low-volume—produce a wide variety of products, complete with customization options. Manufacturers in machine-building industries, for instance, put a premium on flexibility over speed and efficiency. At 100 percent OEE—or even at a still-excellent 85 percent—you lose flexibility. As a result, the target OEE varies widely based on the situation.

Small Mix

By contrast, small-mix manufacturers—also known as low-mix/high-volume—produce mass quantities of the same parts and products, at a low cost and with a low defect rate. Consumer products like light bulbs or rolls of paper fall into this category. They strive for high quality and availability but lower efficiency. In their case, a dip in efficiency actually fosters the flexibility to increase production as needed. As a result, companies in this group are more likely to target a high OEE.

Go Beyond World-Class OEE Targets with Worximity

Contrary to popular belief, world-class OEE isn’t the king of manufacturing. Rather, efforts aimed toward continuously improving your OEE are. The actual number is less important than driving process improvement, and, as a result, improving your OEE. 

For greater success, manufacturers across all industries need to measure the metrics relevant to their goals, then set targets based on those goals. OEE targets need to drive incremental process improvement—achievable within 3-4 months.

Worximity can help! Our solutions set you up to measure and report on all aspects of your operation:

Tileconnect

  • Physical peripheral connects to any machine

  • Gathers production data automatically and in real time

  • Monitors downtime events and production counts

Tile+

  • Features a dashboard interface

  • Gathers production data in real time

  • Enables teams to quickly pivot to improve

Tilelytics

  • Offers an easy-to-use analytics platform

  • Identifies production patterns

  • Identifies areas of improvement 

Want to get a handle on your current OEE measurements and find ways to improve your operations? Download our quick and easy OEE calculator, and contact us to schedule a demo with an expert.

OEE Calculator Excel Template

Worximity provides simple realtime technologies to solve food processor pains such as downtime, rejects, waste, overtime; helping them gain profit velocity by improving throughput, yield and OEE.

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