OEE Glossary of Terms

OEE Glossary of Terms:



One of the three OEE metrics. This is the possible production time after all

downtime losses (machine breakdowns, machine adjustments/setup) are subtracted.


Bad Count

The input count for any part not produced to manufacturing specifications. (bad/reject)

Balanced Production

When a manufacturing process produces exactly what the product demand is. Takt time

is the measurement used most often to determine if a manufacturing process is balanced.


A comparison tool used to determine the level of product, process, growth, or other

successes your manufacturing plant is experiencing when compared to similar companies

with similar processes and products. Used to identify a company’s strengths and

weaknesses compared to their competitors and make necessary adjustments.

Best Practices

Repeatable procedures that over time prove to be the most efficient and effective way of

accomplishing a task. Successful companies use to develop a standard of measuring.


The slowest operation or choke point in a manufacturing process or machine.



The maximum amount a machine, system, or process can produce.

Changeover Time

Time lost on a machine due to swapping out material, tooling, connections, or equipment.


Switching from producing one product to a new product on a machine. This process may

involve replacing dies or removing unused materials. In Lean Manufacturing terms

changeovers are accomplished through S.M.E.D. (Single Minute Exchange of Die)

programs which strive to accomplish a complete changeover in under ten minutes.

Continuous Improvement

The ongoing process of trying to do things better, faster, and less expensive.

Cycle Time

The time to produce one part or one repetition of a particular task on a machine.

Cycle Time Analysis

Tool used to determine cycle times of a machine and a way to understand the events that

affect the Performance metric of OEE.


Down Time

The period of time the machine is not available for production due to maintenance or


Down Time Loss

Any production time lost due to unplanned shutdowns. One of the three OEE

Loss Categories which reduces the OEE metric, Availability.

Down Time Reason Codes

Available codes to select that explain why a machine is down or not producing parts.

These codes help to attribute the specific source or reason to why the machine is down

and can be monitored and collected to analyze the production process. With down time

reason codes, Root Cause Analysis can be applied to start determining Down Time




Giving employees more authority, accountability, and responsibility to affect their work

place and improve their daily lifestyle. Many of the best manufacturing companies invest

in OEE programs that empower an individual to be more productive.

External Setup

The steps and procedures you can perform while the machine is still running that

facilitate the S.M.E.D. (Single Minute Exchange of Die) process.


In OEE, an event is a production loss which occurs on a machine that is



Final Machine Run Time

The actual production time of the machine after subtracting all Losses (Downtime, Speed,

Quality). This is what OEE measures – your machine’s real efficiency.



A measurable objective a machine intends to achieve within a specific period of time.

S.M.A.R.T. Goals are Specific, Measurable, Attainable, Relevant, and Timely.

Good Count

The input count for any part produced to manufacturing specifications. These parts meet

quality standards without any rework. Good count is used to calculate OEE




A Japanese term for “improvement”. A Japanese philosophy that implements the Lean

Manufacturing tools used to effect improvements in the manufacturing process. This

approach is to motivate employees plant wide to become involved in the evolution and

improvement of all functions of the business by eliminating waste.

Key Performance Indicators (KPI’s)

KPI’s refer to a list of measurable parameters that will indicate how well a manufacturing

plant is doing at attaining goals. Availability, Performance, Quality, and OEE are

all KPI’s that a manufacturing plant would like to measure. The Live OEEhas

these plus 25 more KPI’s built into the product for your easy implementation.


Lean Manufacturing

A manufacturing system that strives to relentlessly eliminate waste from its operations.

Lean Manufacturing strives to produce products that are on time and use as few resources

as possible. The OEE metric is a key tool in Lean Manufacturing programs.

Lean Manufacturing includes many manufacturing improvement tools such as S.M.E.D,

TPM, 5S, and Kanban. Lean Manufacturing empowers and motivates employees to

engage in activities to better their respective companies.


Machine Adjustments/Setups

One of the Major Loss Events. Machine Adjustment/Setups is the time lost on the

machine due to configuring equipment. Setup and machine changeovers contribute to

OEE Downtime Losses and reduce the OEE metric, Availability.

Tracking machine setup time is critical in reducing this Downtime Loss.

Machine Breakdowns

One of the Major Loss Events. Machine Breakdowns is the time lost on a machine due to

equipment failure. Machine Breakdowns contribute to OEE Downtime Losses

and reduce the OEE metric, Availability.

Machine Production Bad Parts

One of the Major Loss Events. Manufactured parts which did not meet quality

specifications. These bad parts or rejects were produced during the steady state

production of the machine. Machine Production Bad Parts contribute to Quality Losses

and reduce the OEE metric, Quality.

Machine Reduced Speeds

One of the Major Loss Events. Machine cycle where the process is running but at a

slower than expected rate. Machine Reduced Speeds contribute to OEE Speed

Losses and reduce the OEE metric, Performance.

Machine Startup Bad Parts

One of the Major Loss Events. Bad parts produced while the machine is adjusted for

production. Machine Start Up Bad Parts contribute to Speed Losses and reduce the

OEE metric, Quality.

Machine Stops

One of the Major Loss Events. A Machine Stop is a pause in production typically less

than five minutes. It is usually not long enough to be tracked as downtime. Machine

Stops contribute to Speed Losses and reduce the OEE metric, Performance.

Machine State

The active state of the machine. The machine state can be run, jog, setup, or down.

Major Loss Events

The categories of production losses that are most prevalent in the manufacturing process.

Machine Breakdowns, Machine Adjustments/Setups, Machine Stops, Machine Reduced

Speeds, Machine Startup Bad Parts, and Machine Production Bad Parts make up the

Major Loss Events. The OEE metrics help isolate these six different Major Loss

Events to help you address them each individually and improve your process.

Material Shortage

A condition causing a machine to be down from being out of parts or the materials

needed to make that part. The machine cannot continue to produce product until the

material flow has been corrected. A downtime reason code can be associated with this

condition and displayed on the Live OEEfor plant wide notification.


Nameplate Capacity

The design capacity of the machine or its manufacturing process.


Overall Equipment Effectiveness (OEE)

The key measurement in Total Productive Maintenance (TPM). OEE is the

essential measurement for determining the efficiency and effectiveness of your process.

By breaking down OEE into the three key metrics Availability, Performance, and

Quality, you can measure and analyze a problem with the machine and provide

improvements to fix the manufacturing process and benchmark your progress.

(Formula) OEE = Availability x Performance x Quality

Availability: Actual production time left after subtracting all planned downtime.

Performance: How well the machine was running when it was running.

Quality: How many good parts versus bad parts the machine has produced.

OEE Metrics:

The three components of OEE: Availability, Performance, and Quality. Focusing

on these three metrics is sometimes more important than the final calculated OEE


OEE Losses

The three types of Productivity Losses (Downtime Losses, Speed Losses, and Quality

Losses) associated with the three OEE metrics.



One of the three OEE metrics. Performance is the rate at which a machine

converts available time into product. Performance tells us how well the machine was

running, when it was running. Performance takes into account all the factors (Speed

Losses) that cause the machine to operate at less than the maximum speed.

Planned Machine Run Time

The total run time that the machine is expected to produce parts.

Planned Shutdown

Unproductive time on a machine that is deliberately scheduled. Planned shutdown on a

machine is excluded from the OEE calculation.

Plant Operating Time

The time that a manufacturing plant is open and the machine is capable of operation.



One of the three OEE metrics. Measured in the OEE metric by tracking

rejected parts. Quality takes into account bad parts (Quality Losses) that do not meet

quality standards.

Quality Loss

Quality loss is the percentage of pieces that do not meet quality standards. One of the

three OEE Loss Categories which reduces the OEE metric, Quality.


Reject Parts

Product produced on the machine that do not meet quality specifications.

Rework Parts

A category of rejected parts that can be remanufactured into good parts. The Simple

OEE calculation does not make the distinction between reworked parts and bad parts that

are scrapped and thrown away.

Run Time

The total amount of production time that a machine has been producing parts.


Scheduled Downtime

The period of time that a machine is not performing its intended function due to planned

downtime events. Preventive maintenance and machine production tests are a few of the

more common types of scheduled downtime.

Setup Time

The period of time on a machine required for an operator to perform all the necessary

tasks to produce the first good part.


Live OEE Systems easy way of implementing OEE and calculating the Availability,

Performance, and Quality metrics of your manufacturing process.

Single Minute Exchange of Die (S.M.E.D.)

A Lean Manufacturing tool used to quickly change a machine over from producing a

specific part or product to producing a different part or product. This program is used to

help reduce setup time on the machine. This setup time can be exchanging dies or

mechanical structures, but also include changing material thickness, color, or type.

Speed Loss

Any production time lost due to machine running below maximum speed. One of the

three OEE Loss Categories which reduces the OEE metric, Performance.


Takt Time

The production rate of the machine that matches the rate of sales or consumption. Takt

time is a German word meaning measure. In its purest sense, takt time is used to produce

exactly what the customer will consume. Knowing what your takt time is for a specific

product will help you understand the machine’s ideal cycle time (target counter) to meet

your customer’s demand.

Target Counter

The target counter is also referred to as Takt time or calculated target of the machine.

The target counter illustrates to the machine operator the number of parts or cycles that

should be completed at a particular point within the shift, day, or production run. The

target counter is a variable within the Live OEE System that increases its value based on a set time value.

Total Count

The total number of parts, good and bad, that are produced on a machine. Total Count is

used in calculating the OEE metric, Quality.

Total Productive Maintenance (TPM)

An equipment maintenance system that addresses maintenance issues that cause

equipment downtime before they become major problems with the machine. TPM

includes scheduling maintenance on a regular basis to allow for more proactive and

preventive maintenance on the machine. A solid TPM program plans your machine

downtime and keeps breakdowns to a minimum.

Total Time

The total accumulated machine time of Run Time + Down Time + Setup Time. Total

Time is used in calculating the OEE metric, Performance.


World Class OEE

A measured OEE percentage of 85% or greater is known as World Class OEE.


Class OEE is the metric to compare current equipment performance to world class

performance. World Class figures of OEE also include Availability of 90%, Performance

of 95%, and Quality of 99.9%.

Studies throughout the world indicate that the average OEE value in manufacturing plants is 60%.