What is OEE Software? Definition & Benefits
In manufacturing, the same machines, operators, and even materials can produce dramatically different results. This not only leaves you guessing about what actually drives performance—when you can’t replicate your best performance or prevent your worst, it can affect your bottom line. OEE software eliminates the guesswork by revealing exactly what separates high-performing shifts from underperforming ones, giving you the insights you need to operate at peak efficiency.
What Is Overall Equipment Effectiveness?
Overall Equipment Effectiveness, or OEE, is a manufacturing metric used for driving continuous improvement by identifying why a given machine varies in performance over time. It captures the top three sources of manufacturing productivity: machinery availability, performance, and quality. Because OEE provides a consistent way to measure the effectiveness of a machine or process, it’s considered a core manufacturing metric.
OEE scores are part of a core set of metrics and key performance indicators (KPIs) that manufacturers have on their dashboards to gain insights into machinery performance. In the purest sense, it is a metric to drive continuous improvement to the manufacturing process and identify why a given machine varies in performance over time
Formula for Calculating OEE
The overall equipment effectiveness definition takes into account three variables three variables to provide production teams with additional insights during different manufacturing circumstances. This powerful metric is actually simple to calculate:
OEE = Availability x Performance x Quality.
Let’s look closer at each of these factors.
Availability
The availability factor reports the percentage of scheduled time that the machine or process is available for production. This metric is used to measure uptime only. Seiichi Nakajima, the inventor of OEE, in his book Introduction to TPM: Total Productive Maintenance, designed the availability factor to exclude the effects of scheduled downtime events, performance, and quality.
The analysis for defining the availability factor begins with the time a plant is available for production. From that figure, planned shutdown time needs to be subtracted, including when there’s not going to be a production run or scheduled downtime.
Downtime loss should include events that stop production, such as material and labor shortages, equipment failures, and setup time. Setup time is included in the availability analysis because even though it is not possible to eliminate setup time, it is possible to reduce it.
The formula is Availability = Actual Uptime / Scheduled Uptime.
Performance
The performance factor quantifies the speed that the machine or process produces parts compared to the at-spec or designed speed or standard cycle times for the machine. Seiichi Nakajima designed this metric to measure the speed that parts are produced without the influence of availability or quality.
The performance metric can show a speed greater than 100%, but when used in the calculation, it must be capped at 100% to limit the effect on the percentage.
The formula is: Performance = Total Parts Produced x Standard Cycle Time / Actual Uptime. In this calculation, the Total Parts Produced includes rejected parts.
Quality
In the context of OEE, the quality factor quantifies the machine or process yield of good quality parts as a percentage of all or total parts produced. Seiichi Nakajima designed this factor to be independent of availability or performance.
The calculation is Quality = Good Parts / Total Parts Produced.
What Is OEE Software?
Overall equipment effectiveness software is a digital solution that calculates and measures this metric across your manufacturing operations. It automatically collects data from your machines and production lines, then analyzes the three key factors above: availability (how much time equipment is actually running), performance (how fast it’s running compared to ideal speed), and quality (how many good parts versus defective parts you’re producing). It transforms raw machine data into meaningful metrics that help you identify bottlenecks and reduce downtime.
Manufacturing companies of all sizes use OEE monitoring software to move beyond gut feelings and manual tracking methods when making operational decisions. Whether you’re running a single production line or managing multiple facilities, OEE software gives you data-driven insights to optimize equipment performance and maximize productivity. It’s especially valuable for manufacturers dealing with complex production schedules, tight quality standards, or competitive pressure.
How OEE Software Works
OEE software follows a systematic process to transform raw machine data into actionable performance insights. Knowing how it works can help you understand why OEE software is so important.
- Data collection: OEE software connects directly to your manufacturing equipment through sensors, programmable logic controllers (PLCs), and machine interfaces that automatically capture production information.
- Real-time monitoring: Once connected, the software continuously tracks machine states, cycle times, production counts, and quality data, creating a complete and accurate picture of what’s happening on your shop floor.
- Calculation processing: The software processes this raw data using industry-standard OEE calculations to generate meaningful performance metrics, including availability percentages, performance rates, and quality scores. Quality scores may require data from your MES system around parts produced vs. parts scrapped if your production equipment doesn’t track this data automatically.
- Data integration: Most OEE solutions integrate seamlessly with your existing manufacturing execution systems (MES) and enterprise resource planning (ERP) software, creating a unified view of operations across your entire facility.
- Reporting and alerts: The processed data flows into dashboards, reports, and automated alerts that help you make informed decisions about production reporting, maintenance planning, and operational improvements
Benefits of OEE Software
By using real-time data to calculate overall equipment effectiveness and keep it current, manufacturers can gain valuable insights into how they can continuously improve production performance. The following are four of the most common:
Reduce production costs and waste
The combination of real-time production monitoring and OEE software enables manufacturers to continuously monitor production cycles and scrap by machine, ensure all production steps are executed, measure production times, and predict completion times.
Real-time production monitoring data also helps to identify the factors that increase per-unit production costs and scrap. The resulting insights help in identifying potential areas to reduce unnecessary costs and waste as well as maximize equipment utilization.
Improve machinery yield rates
OEE software provides insights and benchmarks into how each machine and production line performs for every production job it’s assigned to work on. Seiichi Nakajima envisioned it as a metric that could catch variations in machinery performance when used to produce the same product over time.
Smart manufacturing techniques developed since OEE was first created now provide the contextual intelligence needed to troubleshoot why yield rates vary. That’s why manufacturers don’t rely on OEE alone.
Extend the useful life of machines and presses
When OEE is combined with additional metrics that use real-time production and process monitoring data, manufacturers can quickly see what jobs, materials, and tasks cause premature wear on a machine.
Knowing what’s causing a machine to degradate and prematurely wear is invaluable. Using this knowledge, manufacturers can implement maintenance, repair, and overhaul (MRO) techniques to prolong the machine’s useful life, saving millions of dollars per year.
Improve in-process and final product quality
Combining OEE with additional manufacturing metrics helps manufacturers find random versus deterministic factors that affect product consistency and quality. Keeping it in context as just one of many KPIs when troubleshooting quality problems across the shop floor—whether in-process or at the final product stage—is essential.
Additionally, applying smart manufacturing techniques along can help to identify why machinery produces wide variations in availability, performance, and quality. This is a critical exercise to optimize the entire production process.
Key Features of OEE Software
The right OEE software should offer features that directly support your operational goals and decision-making processes. The best examples of overall equipment effectiveness software include the following features.
Real-Time Data Collection and Monitoring
Manufacturers are now using OEE software with data captured through real-time production monitoring and smart machinery. This software can automate trending analysis and offer new insights into how they can improve shop floor performance and manufacturing operations. Real-time data analyzed using OEE can also help predict breakdowns for each manufacturing machine or asset, expanding the original vision of the metric for 21st-century manufacturers.
Interactive Dashboards and Visualization
Comprehensive dashboards present your OEE data in easy-to-understand charts, graphs, and visual indicators that help you quickly spot trends and anomalies. You can customize these displays to show the specific metrics that matter most to your operation, whether that’s individual machine performance, production line efficiency, or facility-wide OEE scores. The visual format makes it simple for operators, supervisors, and managers to understand performance at a glance and take action.
Integration with MES and ERP Systems
Seamless integration capabilities allow OEE software to share data with your existing manufacturing execution systems and enterprise resource planning software, eliminating data silos and manual data entry. Integration also supports more sophisticated analysis that combines OEE metrics with production schedules, quality data, and business outcomes.
Advanced Analytics and Reporting
Sophisticated analytics tools help you dig deeper into your OEE data to identify root causes of performance issues and opportunities for improvement. The software can perform trend analysis, compare performance across different time periods or production runs, and generate detailed reports. These analytical capabilities transform your OEE data from simple monitoring into strategic insights.
Examples of OEE in Manufacturing Environments
Different manufacturing sectors use OEE software to address their unique operational challenges and performance goals. Looking at specific industry applications can help you understand how OEE software might benefit your particular manufacturing environment.
Automotive Production Facilities
The auto industry is a top OEE example. Automotive manufacturers use OEE software to monitor complex assembly lines, where even small delays can cascade into significant production disruptions and costly schedule changes. The software can help plant managers identify which stations are creating bottlenecks and where preventive maintenance might prevent unexpected downtime. By maintaining high OEE scores across their production lines, automotive plants can meet just-in-time delivery requirements and minimize inventory costs.
Food and Beverage Processing Plants
Food and beverage manufacturers rely on OEE software to balance production efficiency with strict quality and safety requirements that are non-negotiable in their industry. The software monitors processing equipment like mixers, packaging lines, and filling machines, while also tracking quality metrics. This dual focus helps food processors maintain consistent product quality and maximize throughput during peak demand periods.
Electronics and Component Manufacturing
Electronics manufacturers use OEE software to optimize high-speed assembly lines where precision and consistency are paramount to product functionality and reliability. The software tracks pick-and-place machines, soldering equipment, and testing stations to identify performance variations that could lead to quality issues or production delays. Monitoring OEE metrics helps electronics manufacturers maintain the tight tolerances needed for their products while meeting cost and delivery targets.
Choosing the Right OEE System
Selecting an OEE system that aligns with your operational needs and business goals will determine how much value you get from your investment. Consider these key factors:
- Ease of integration: Look for OEE software that connects easily with your existing equipment and manufacturing systems without requiring extensive modifications or downtime.
- Scalability options: Choose a solution that can grow with your business, whether you’re planning to add production lines, expand to new facilities, or increase data collection points.
- User interface design: Prioritize software with intuitive dashboards and reports that your operators and managers can understand and use effectively without extensive training.
- Real-time capabilities: Verify that the software provides truly real-time data collection and alerting, not just periodic updates that might miss critical issues.
- Customization flexibility: Select software that allows you to configure metrics, reports, and alerts to match your operational requirements and goals.
- Technical support quality: Evaluate the vendor’s support capabilities, including implementation assistance, training programs, and ongoing technical help.
- Total cost considerations: Factor in not just the software licensing fees, but also implementation costs, training expenses, and ongoing maintenance.
Why Choose DELMIAWorks OEE Software?
DELMIAWorks OEE software delivers comprehensive equipment effectiveness monitoring with enterprise-wide visibility and real-time exception alerts. Our solution automatically captures and stores OEE calculations and delivers them to dashboards and flexible reporting systems. You can even track efficiency down to specific item numbers and revisions.
Our integrated approach connects OEE monitoring directly with comprehensive ERP and MES modules for complete operational visibility. You’ll benefit from extensive drill-down capabilities that let you jump seamlessly between OEE data and related information in other modules. Contact us today to learn how DELMIAWorks OEE software can transform your equipment data into competitive advantage.
