If you think OEE has no secrets to you and that your plant maintains the highest OEE results… think again. The harsh truth is that most manufacturing plants’ OEE lands somewhere between 35 and 43%. They just don’t know about it.

OEE – calculation rigged?

OEE (Overall Equipment Effectiveness) is the undisputedly most important metric in estimating manufacturing efficiency. It’s simple, easy to understand (the percentage is self-explanatory), results allow us to compare even seemingly incomparable. That’s why it was widely adopted as the main KPI to compare the productivity of production assets like machines, work cells, lines, or even entire sites and plants. The premise of the ultimate magic formula to guide the plant to the highest efficiency enchanted engineers and managers across the industrial world. Can it really be the ultimate reliable answer to all problems with losses and wasted production potential?

OEE – and who needs it, anyway?

In an era of “Made in Japan” domination over Western world markets, Professor Seichii Nakajima set out his goals to find a simple, yet insightful formula. An algorithm that will support companies like Toyota or Sony in optimizing production and assuring their market position for years to come. He came to the conclusion that key roles in final production market strength lie in three KPIs:

Availability – a metric to describe how reliable and well… available to produce equipment is.
Performance – the amount of products that leave the machine in the time it is available for production.
Quality – the number of produced goods good enough to be released to the market among all of the produced ones.

But how to compare the availability of a vast variety of machines like, e.g., full automatic monoblocks and manual assembly workstations? And how to compare the performance of cutting-edge CNC with a hydraulic press built in the ’60s? And what about the quality of industrial robots and PVC injection molding machines? How to evaluate and compare directly such different and relative parameters?

Fulfilled potential metric

Percentage to the rescue! No, not the ones you were thinking of… despite not knowing for sure how the creative process of Professor Nakajima looked like. His pivotal idea was to translate the results into a percentage of each asset’s fulfilled potential. It’s true that a milling CNC can spend tens of hours on one detail while an injection molding machine will release countless thousands. However, it still does not translate to the advantage of one over the other. With percentages, it was finally possible to evaluate if the asset works at full of ITS OWN achievable production potential.

Illustration of a futuristic manufacturing plant with advanced automation and robotics, representing the concept of a smart factory, explained in a free mini video course.

Assets also mean people…

A whip on employees’ back?

OEE creation marked a milestone on the Lean Manufacturing and TPM development map. The KPI brought about easy-to-comprehend simplification of complex manufacturing processes results. With it, management staff became able to spot bottlenecks dragging whole plant efficiency down. It unlocked ways to improve tasks like maintenance, doubling crucial stations, or replacing weak links in the production chain. But no production plants are autonomous (yet) so OEE became indirectly applicable to personnel efficiency as well, e.g. maintenance, operators, intra-logistics… Soon companies turned their punishing eyes armed with OEE lenses on managers as well, and thus began the era of pressure on the score.

But where there is pressure, human ingenuity comes to the rescue.

How much will be enough?

There are companies or even whole industries (e.g. automotive), where each subcontractor is OBLIGED to present an OEE above a certain limit, or he may lose the contract.

There are plenty, where whole crew bonuses depend on it.

There are managers whose entire careers hinge on the reported OEE of their plant.

No wonder that in many cases, the result is known first, and then the calculation method is adjusted.

In case of all those MES production controlling companies where MES stands for Manual Excel Systems tampering with the results is the easiest, so I will omit it in this article. Companies with such digital maturity of production monitoring have bigger problems than “creative” OEE.

More interesting is how to trick the systems which main purpose is reliable data collection and trustworthy calculations?

OEE – How to “win” with the system?

Let’s recall how the OEE formula looks, and it will be easier to spot where „tweaking” results opportunities lays:

The illustration demonstrates how to calculate OEE


Calculated as a percentage of time when an asset is ready to produce within the scope of the full planned production time. And it does not matter whether the production actually took place and what the final result was.

The most common ways to tamper Availability: 

Unexpected unplanned downtime? Isn’t it a great opportunity to immediately schedule a crew meeting, „planned” maintenance, or just a fire evacuation drill? With one magic trick, you’ll turn unplanned downtime into planned one, avoid Availability decline, and move losses from OEE to OOE… which is not reported (usually).


Calculated as the number of products accepted as „good enough” to the total amount of produced goods in a given time.

The most common ways to tamper Quality: 

The easiest method is to control product quality without any relation to the machine/line. Let’s set the QC station close to the warehouse, or make it in a dedicated laboratory. Separate division – separate KPIs. Scrap or rework in separate reports do not affect your line’s OEE – the line itself works flawlessly.


Calculated as the amount of produced goods in comparison to the maximum volume possible to be produced in a given time (of availability).

The most common ways to tamper Performance: 

The easiest way to „raise” Performance while „improving” Quality is to count reworked goods as new ones. If the system does not track serial numbers, each good that passes through the machine is counted, despite in some cases being reworked due to quality issues. So, even if the same product passed through the same machine multiple times, it will be counted as a newly produced good. Maybe there will be some discrepancies in the ready goods warehouse since they received 100 goods and apparently 120 were produced but… the plan was to produce two details per minute and that’s what the machine achieved.

More ways:

All factors of the OEE formula can also be shaped by time qualification tricks. If some amount of goods is produced during planned downtime (e.g. startup after a weekend outage or retooling between orders), those goods can be used to fill loses during planned work time or replace low-quality goods. Or conversely, low-quality goods can be officially assigned as post-resetup trial production, which is usually condemned to become scrap anyway. The trick is to flexibly define production and planned downtime time/production.

Since OEE is composed of the subKPIs described above –  Availability, Quality and Performance, where each one of them affects the final result as a cumulative percentage. It’s quite counterintuitive, but half of a half of a half is only 12,5%! And the only way to reach 100% of a result is to maximize each one of the three. Due to this, if it is known that one of the subKPIs is hard to measure and if measured can significantly decrease the final result… why not remove it completely from the formula? For instance, counting produced goods on any machine is not standard, and Performance is known of being usually below “perfect” (microstops and others…) then why not omit it and calculate OEE as Availability x Quality? It’s astonishing how many companies operate in this manner. “Our OEE is above 93%…” – yes, but without Quality, or Performance, or Availability…

OEE – how to see through the OEE illusion?

The tampering methods listed above are just the tip of the iceberg of human creativity fueled by the fear of not reaching unrealistic goals. Usually, organizations themselves are not even able to see through the long-standing practices of tweaking the results, so the best way is to reach to an external auditor, partner or consultant.

Tampering, tweaking, improving… all come with some risk but promise a perfect result – “on paper”. That leads to a long-lasting pathology practice, which is the only way to reach unrealistic goalsm which are unrealistic due to the manipulation in the first place. In the end, it becomes a never-ending spiral, that traps manufacturing plants in illusory comfort by hiding the real sources of losses. Those factories that fall victim to the manipulation act blindly and despite their best efforts, cannot compete with more aware entities in the global market.

Without hard work to break the circle of manipulation, there is no chance to get rid of the real problems and increase margins, stability and competitiveness. Without financial stability, it’s hard to attract and maintain talents in the employee market. Even the smallest changes made with data-driven awareness of the real situation in the long run can determine who thrives and who withers on the challenging global market.

Unfortunately, it is not enough to just buy and implement any OEE solution from the myriad of offered off-the-shelf systems. Reporting, and monitoring real-time data directly from equipment with alerts and notifications, although an important step to avoid data manipulation, still does not make plants bullet-proof against tampering with the results (as proven above).

OEE system

OEE – how to unleash it’s power?

Truly beneficial OEE implementation is a marathon, not a sprint. It takes time relative to all the neglect that arose over the years. It’s not just about the technology but about change on an operational and mindset level. It brings rewards to those who dare to break through the veil of comforting lies and put real effort into the change. In this journey, it is smart to move with a companion that can support the change with an external perspective and experience. Be aware of salesmen offering easy answers and fast rewards under the “one size fit all” off-the-shelf solutions banner.

Only custom-made applications dedicated to processes’ specific, contextualizing all data from silos and adding layers of understanding like OOE or TEEP over OEE (that’s a whole other story) can bring true benefits. Translating OEE percentage results into „production time losses”, „losses in goods” or directly – „money” can make some organizations more empowered and willing to do well-prioritized optimizations of their manufacturing operations. Tight cooperation with technological partners is the best way to develop the ultimate solution that addresses long-standing hidden pain points and unlocks productivity bottlenecks.

It is estimated that 60% of market-leading companies currently relying on out-of-the-box OEE and MES solutions already plan to switch to custom-made ones with chosen partners by 2025. Other companies… have this realization still ahead of them.**

** Source: Magic Quadrant for Manufacturing Execution Systems

How to avoid the trap?

Don’t be like “other companies”. Let us help you discover if your OEE is adulterated, where and how you are wasting money, and how to start your journey towards manufacturing excellence. Together, let’s prepare a roadmap and define the most important aspects specific to your plant of the OEE solution so the one you will get will really help your business flourish in years to come. Visit our OEE production monitoring page.

Graphic prompting viewers to follow the company on LinkedIn for updates and news



Frequently Asked Questions:

OEE (Overall Equipment Effectiveness), also known as the machine efficiency index, is a measure of the results of production processes. Monitoring OEE makes it possible to assess to what extent machines are being used and how efficiently production is going on. Using OEE allows you to improve the manufacturing process, which has an impact on the profitability of production.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

If you violate the Regulations , your post will be deleted.

    _All posts in this category

    How to increase production efficiency without investments in the shop floor?

    You don't have to replace your machines with the new ones to make your production "smarter" and more efficient. Your shop floor is…
    Read more

    Navigating ThingWorx: Expert Solutions for IoT Challenges

    Whether you're a seasoned user or new to ThingWorx, overcoming these hurdles is crucial for IoT success. In this blog, we'll uncover the…
    Read more

    5 ways Manufacturers Can reduce energy Costs 

    Very often overlooked or accepted as-is due to being an integral part of the production – in times of crisis and cost-cutting, it…
    Read more

    5 steps to increase energy efficiency for Manufacturers

    According to the German Federal Statistical Office, energy consumption by the industry for the production of goods hardly changed between 1995 and 2019.…
    Read more

    7 ways how data visibility helps manufacturing improve efficiency

    In the manufacturing industry, efficiency is key to staying competitive and profitable. One way to improve efficiency is through data visibility. By having…
    Read more

    Energy Advisor for Manufacturing – energy savings for industry

    Energy consumption bills have been a major focus in virtually all areas of industry for many years, and the current global situation is…
    Read more

    Digital Transformation – technological trends for the successful evolution of the automotive industry

    The new opportunities associated with Industry 4.0 require companies to adapt to the new environment. In this article, we take a closer look…
    Read more

    Here's why you should use Azure Cloud for your IoT Solutions

    Digital transformation is reshaping the way how people, products, assets, data, and operations are connected to create an outcome for the customers and…
    Read more

    IoT Data Visualization

    Internet of Things systems have one huge advantage – they can collect lots of data. Temperature, items produced, amount of remaining liquids, humidity,…
    Read more

    Coronavirus & production continuity – IoT & AR for industry

    The sudden epidemic of SARS-CoV-2 coronavirus and the COVID-19 disease has affected every sphere of the modern world. Caused by an epidemiological threat,…
    Read more

    Horizontal Scalability in ThingWorx 9

    Scalability in web applications has become crucial in the past years. An ever-growing number of devices and clients, connected to the Internet, makes…
    Read more

    High Availability in IoT applications

    Modern web applications that serve data and content to millions of users run in clustered environments. Dealing with a huge amount of connections…
    Read more

    IoT Hub Connector for ThingWorx – Connecting ThingWorx Platform with The Azure Cloud

    The ThingWorx IoT Hub Connector is the bridge that connects the ThingWorx platform to the Azure cloud (more specifically to Azure IoT Hub).…
    Read more

    What is AIoT? Artificial Intelligence of Things in Industry 4.0

    Synergy, this is how you can define this natural combination of technologies that will significantly affect the appearance of the future of production.…
    Read more

    What's new in ThingWorx 9.0?

    This year's Liveworx, due to the global situation caused by the COVID-19 pandemic, has exceptionally been held only online. On the very first…
    Read more

    Machine Learning & ThingWorx vs COVID-19

    The evolution of artificial intelligence, as well as machine learning has gained momentum in the last few years. The constant drive to increase…
    Read more

    5G network – the key to the Industrial Internet of Things

    The Industrial Internet of Things changes our view on the classic concept of production today. The largest manufacturing companies are eager to reach…
    Read more

    How is the Internet of Things changing the aviation industry?

    The Internet of Things is being used more and more, and even global giants are already using the optimization or information gathering solutions.…
    Read more

    Rockwell Automation TechED EMEA 2019 shows that Industry 4.0 is closer than you think

    Following up our partnership with Rockwell Automation, our team of business and technical experts found their way to Munich, Germany to participate in…
    Read more

    Internet of Things and its impact on Automotive Industry

    Nobody would be surprised by a statement that the Automotive industry is innovative in its nature. Cars are machines that historically revolutionized many…
    Read more

    Internet of Things in logistics

    It might seem that the Internet of Things is dedicated only to industry. However, transport and logistics are closely connected to it, and…
    Read more

    The fourth Industrial (R)evolution

    Industry 4.0 and its foundation, the Internet of Things (IoT – especially in industrial version: IIoT), in the last years have dominated the…
    Read more

    How is ThingWorx different from Axeda and should you consider moving?

    PTC is phasing out its Axeda platform. Although they look similar at first sight, Axeda and ThingWorx differ very much in capabilities.
    Read more

    Are your data sources ready? InfluxDB support of ThingWorx

    While ago, PTC announced a new release of ThingWorx Platform (8.4). Among other exciting features, this release has OOTB support for integration with…
    Read more

    _Let’s get in touch

    Contact us