How to calculate OEE in machining: formula, example and common mistakes
OEE (Overall Equipment Effectiveness) shows which share of the planned time turned into good parts. This is how you calculate it for a CNC machine, and these mistakes distort the result.
Updated: 11 October 2026
The formula
OEE = availability × performance × quality
| Factor | Calculation |
|---|---|
| Availability Was the machine machining parts during the planned time? | active time ÷ planned production time |
| Performance Was it machining as fast as it can? | (part count × ideal active time per part) ÷ active time |
| Quality Were the parts good? | good parts ÷ part count |
The metric comes from Total Productive Maintenance (TPM) by Seiichi Nakajima.[1] Today it is described in, among others, the VDMA guideline 66412-1[2] and ISO 22400-2[3].
What counts as active time
At any moment a CNC machine is in one of four states. In Smart Factory each state has a color: Active (green), the machine is machining a workpiece; Change (orange), the workpiece is being changed; Setup (magenta), the machine is being set up; Not Productive (gray), the machine is standing still.
Only the green time is active time. Setup, workpiece change and downtime are availability losses: the machine is not machining. The cycle time of a part is active time plus workpiece change time. Performance counts only the active part, measured against the ideal active time per part.
Multiply the three factors and active time and part count cancel out. What remains is a shorter form that is handy for checking:
OEE = (good parts × ideal active time per part) ÷ planned production time
Worked example: one shift on a machining center
The numbers are a made-up example. A shift lasts 480 minutes, including a 30-minute planned break. Planned production time: 450 minutes. The machine is set up for 35 minutes. It makes 160 parts, and changing the workpiece takes 15 seconds per part: 40 minutes in total. It stands still for 10 minutes because no operator is available and for 5 minutes because of a fault. Active time: 450 − 35 − 40 − 15 = 360 minutes. The ideal active time is 2.0 minutes per part. Of the 160 parts, 8 are scrap.
| Factor | Calculation | Result |
|---|---|---|
| Availability | 360 ÷ 450 | 80.0% |
| Performance | (160 × 2.0) ÷ 360 | 88.9% |
| Quality | 152 ÷ 160 | 95.0% |
| OEE | 0.800 × 0.889 × 0.950 | 67.6% |
Check with the short form: 152 good parts × 2.0 minutes = 304 minutes. 304 ÷ 450 = 67.6%.
Read in minutes: of 450 planned minutes, 304 became good parts. 146 minutes were lost: 90 in availability (35 setup, 40 workpiece change, 15 downtime), 40 in performance (360 minus 320) and 16 to scrap (8 parts × 2.0 minutes). The workpiece changes cost more than the setup here, which is common in series work.
Read per part: on average 2.25 minutes of active time and 0.25 minutes of workpiece change, a cycle time of 2.5 minutes. The ideal was 2.0 minutes of active time.
Which time counts as planned production time
Planned production time is the basis of the calculation. Define it differently and the same machine gets a different OEE.
- Shift time minus planned breaks is the starting point, as in the machine calendar.
- Unmanned hours count. If the machine produces at night or during a break, that time counts as planned time. Otherwise the night's parts are in the numerator but not in the denominator, and OEE can come out above 100%.
- Do not subtract setup or workpiece change. Both are losses inside OEE. In small batches the setup is large, in large batches the workpiece change.
- Do not subtract waiting or faults. No operator, meetings, waiting for approval or a machine fault remain losses inside OEE.
- Do subtract planning loss. Capacity that is demonstrably withdrawn, such as a day without customer demand, falls outside OEE. Write down what counts as such, and keep the rule the same for all machines.
What OEE is realistic?
85% is often quoted as world class. For machining with small batches that is not a fair comparison: every new Production Order costs setup time that hardly occurs in large series. A more useful comparison is with yourself: the same machine, the same definition, month after month.
The five most common calculation mistakes
- Different planned time per machine or shift. Then the values cannot be compared.
- An ideal time that is too generous. Using the standard time from the estimate, with allowances, as the ideal time gives a flattering performance, in extreme cases above 100%. The ideal active time is the fastest time per part this NC program can reach. Smart Factory derives it per NC program from measured batches, or you set it yourself.
- Counting workpiece change as active time, or subtracting setup time from planned time. OEE looks better, but the capacity is gone all the same. In series work this hides the workpiece change loss.
- An unweighted average across machines. A machine with 2 hours of planned time then counts as much as one with 16 hours. Better: sum of good minutes ÷ sum of planned minutes.
- Forgetting short stops. A one-minute stop between two parts is rarely written down when recording by hand. Such microstops belong to performance: the machine runs but does not reach its ideal pace.[1] A longer stop is downtime and belongs to availability.
Collecting OEE automatically
For the calculation you need planned production time, active time, part count, good parts and the ideal active time per part. On CNC machines, status and part count come straight from the control. Smart Factory records active time, setup time, workpiece change time and downtime per machine this way. Collect them automatically and you calculate with real values instead of estimates.
What to do with OEE once you have it is covered in How to use OEE for better production.
Frequently asked questions
What is a good OEE for CNC machines?
There is no fixed value. 85% is often quoted as world class, but it fits small batches with many setups poorly. More useful is the trend of the same machine under the same definition.
Why does workpiece change time not count as active time?
While the workpiece is being changed, the machine is not machining. The cycle time of a part is active time plus workpiece change time, but in OEE only active time counts as time the machine is machining. Workpiece change is an availability loss, just like setup. That way you see in series work how much time the changes really cost.
What is the difference between OEE and utilization?
Utilization usually shows only how long the machine ran. OEE also takes into account how fast it was machining and how many parts were good.
Can OEE be above 100%?
Only through a calculation error. Usually the ideal time is set too generously, or parts were made outside the planned production time, for example in an unmanned night shift that was not counted.
How often should I calculate OEE?
Record it per day and per machine, and look at the trend per week or month. Single days vary strongly with the mix of Production Orders.
About Smart Factory
Smart Factory reads the status of every machine (Active, Change, Setup or Not Productive) and the part count straight from the CNC control and shows the OEE of every machine. More: Smart Factory and Pricing.
Sources
- Seiichi Nakajima: Introduction to TPM. Total Productive Maintenance. Productivity Press, 1988
- VDMA 66412-1:2009-10, Manufacturing Execution Systems (MES) Kennzahlen (DIN Media)
- ISO 22400-2:2014, Key performance indicators (KPIs) for manufacturing operations management, Part 2
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