"Overall Equipment Effectiveness (OEE) is a measure comparing how well manufacturing equipment is running to the ideal plant. OEE incorporates not only Availability but also Performance Rate and Quality Rate."
- Wikipedia

A common question asked of production managers is “why are we not producing to the capacity of the equipment that was installed?” Running a machine faster may yield a small increase in products that pass quality tests but it leads to a higher output of rejected product and waste material. This then increases the cost of production as more energy is spent producing more waste, especially if the waste material is not recyclable.

OEE provides an insight in to the losses occurring during the production process, and it measures the effectiveness of a machine against its ideal effectiveness (which is a machine running at 100% with 100% quality). OEE incorporates Availability, Quality Rate and Production Rate taking a holistic view of all losses that impact on equipment performance.