OEE Formula: A Worked Manufacturing Example
Calculate availability, performance, quality and OEE from one manufacturing shift. Check units, reconcile losses and reproduce the example in ORDREL.
LEAN, CLOSE TO THE WORK
Manufacturing & Lean learning guides
Learn just enough to take the next step. Work with real observations, clear definitions and a review date.
- Demand
Understand the pace required
- Capacity
Compare workload and available time
- Work
Observe the real flow
- Performance & loss
Choose a useful focus
- Root cause
Test the explanation
- Improvement
Run a bounded trial
- Standardize
Make the better method repeatable
- Follow through
Keep ownership and review visible
Connect these methods through Operational Excellence
Manufacturing Safety Guides
Manufacturing safety guides on machine risk assessment, guarding, hazardous energy, the hierarchy of controls and pinch or rotating hazards.
8 Wastes / Muda
Recognize the 8 Wastes, run a Waste Walk and distinguish time released from cash savings.
THE ORDREL OPERATIONS MAP
One connected way to improve.
Start where the work needs attention. Return to earlier steps as you learn.
01
Demand
Understand the pace required
3 methods · explore →Takt Time
What it is
The demand-based production pace: available production time divided by required customer demand.
When to use it
Use it to compare the pace customers require with observed cycle time and planned capacity.
Simple example
420 available minutes divided by 840 required units gives a takt of 30 seconds per unit.
Use the same period and units. Takt is not the observed cycle time and does not include an invented demand.
Kanban / Pull
What it is
A visual or digital signal that authorizes replenishment or movement when downstream demand consumes a defined amount.
When to use it
Use it when work is pushed ahead without need, queues grow or replenishment decisions are unclear.
Simple example
An empty two-bin container signals replenishment while the second bin covers normal lead time.
Set quantities from demand, lead time and variation. A card alone cannot fix unreliable supply or unstable quality.
Just-in-Time
What it is
Providing the needed item, in the needed amount, when it is needed—based on real demand rather than unchecked production.
When to use it
Use it when excess inventory, long lead times or overproduction separate work from customer demand.
Simple example
A downstream withdrawal triggers replenishment of a defined container instead of a schedule pushing unlimited stock.
Reducing inventory without reliable flow, quality and replenishment rules can expose the customer to shortages.
02
Capacity
Compare workload and available time
3 methods · explore →Capacity & Staffing Planning
What it is
A structured comparison of workload, productive time, work rate, skill coverage and the people assigned.
When to use it
Use it before a shift, demand change or staffing decision when the assumptions need to be discussed openly.
Simple example
1,500 labor minutes divided by 384 productive minutes per person gives a four-person arithmetic baseline.
A calculated headcount is not a complete staffing plan. Check skills, breaks, minimum coverage, variation and process limits.
Bottleneck Analysis
What it is
A focused review of the step currently limiting the output of the whole process.
When to use it
Use it when demand exceeds throughput, queues build or one step consistently controls the pace.
Simple example
Mapping shows inspection can release 42 orders per hour while the next-slowest step can release 55, so inspection is investigated first.
The constraint can move after an improvement. Recheck the whole flow instead of optimizing one station forever.
Heijunka / Level Loading
What it is
Smoothing the mix and volume of work over time instead of releasing large uneven batches.
When to use it
Use it when demand patterns and batch choices create peaks, starvation, overtime or excess inventory.
Simple example
A line sequences three product families in smaller repeating intervals rather than producing a full week of each at once.
Leveling cannot erase real demand variation or changeover constraints. Test the sequence against capacity and service needs.
03
Work
Observe the real flow
6 methods · explore →Time Study
What it is
A structured observation of how long defined work takes under stated conditions.
When to use it
Use it to understand cycle variation, establish a baseline or support capacity and improvement discussions.
Simple example
A team records 20 comparable completion intervals and notes product mix, exclusions and interruptions.
Define the boundary and observation mode first. A small sample is descriptive, not proof of a stable standard.
Process Mapping
What it is
A visual record of steps, decisions, handoffs, waits and boundaries in the current process.
When to use it
Use it when teams describe the same process differently or need to see where work loops and waits.
Simple example
An order map separates six minutes of entry work from two approval queues and one rework loop.
Map the real current state at a useful level. A polished diagram of the intended process can hide the problem.
Value Stream Mapping
What it is
A current- and future-state view of material and information flow across an end-to-end product or service stream.
When to use it
Use it when local improvements have not reduced total lead time or when several functions share the outcome.
Simple example
A team maps ten minutes of processing across a five-day order journey and targets the largest information queues.
Choose one product family and a clear boundary. Do not confuse a detailed process map with an end-to-end value stream.
Continuous Flow
What it is
Moving work through connected steps with as little waiting, batching and work-in-process as the process allows.
When to use it
Use it when queues and large transfer batches lengthen lead time or hide defects between steps.
Simple example
Instead of moving 50 forms at once, a team passes smaller groups to the next review step throughout the hour.
Do not force one-piece flow where safety, cure time, testing or product mix requires a different design.
Gemba
What it is
Going to the place where work happens to observe the actual process and learn with the people doing it.
When to use it
Use it before changing a process, when reports conflict with reality or when the team needs shared facts.
Simple example
A supervisor follows one order from release through packing and records handoffs, waits and rework loops.
A gemba walk is not an inspection tour. Ask, observe and respect the work instead of arriving with a verdict.
Muda / Waste
What it is
Work, delay or resource use that does not create the result the customer needs; Lean commonly groups waste into recognizable patterns.
When to use it
Use it while observing a process to name excess motion, waiting, defects, overproduction, inventory, transport or processing.
Simple example
An order waits two days for a signature even though the actual review takes four minutes.
Do not label people as waste. Study the system and distinguish necessary supporting work from avoidable effort.
04
Performance & loss
Choose a useful focus
5 methods · explore →Overall Equipment Effectiveness (OEE)
What it is
Availability × performance × quality: the share of planned production time equivalent to making good output at the ideal rate.
When to use it
Use it to separate equipment-related production loss into downtime, speed and quality components.
Simple example
90% availability × 92.59% performance × 96% quality gives 80% OEE.
Define planned time, ideal rate and good output consistently. OEE is not labor utilization.
Pareto Analysis
What it is
Ranking comparable categories from largest to smallest and showing their cumulative contribution.
When to use it
Use it to choose where to investigate first when many loss or defect categories compete for attention.
Simple example
Twelve missing identifiers, six address issues and two other returns show the first category is 60% of the sample.
The largest category is not automatically the root cause. Keep categories exclusive and use one measure at a time.
Six Big Losses
What it is
A practical grouping of equipment loss: breakdowns, setup and adjustment, small stops, reduced speed, startup rejects and production rejects.
When to use it
Use it to move from one OEE number to the loss categories that deserve investigation.
Simple example
A line separates a 30-minute breakdown from repeated 40-second stops instead of combining both as “downtime.”
Choose definitions that fit the process and avoid double-counting overlapping losses.
KPIs
What it is
A small set of measures that show whether important operational outcomes and process conditions are moving as intended.
When to use it
Use them when a team needs a consistent review of safety, quality, delivery, cost or improvement progress.
Simple example
A daily board shows accepted output, plan attainment, first-pass quality and overdue actions using fixed definitions.
Every KPI shapes behavior. Pair outcomes with context and avoid targets that reward local optimization or hidden problems.
Andon
What it is
A visible or audible signal that makes an abnormal condition and the need for help clear in real time.
When to use it
Use it when problems remain hidden until the end of a run or operators cannot quickly call for support.
Simple example
A station light changes when a material mismatch is detected so the team can respond before more work continues.
A signal without a defined response, authority and escalation path becomes background noise.
05
Root cause
Test the explanation
3 methods · explore →Fishbone / Ishikawa Diagram
What it is
A cause-and-effect map that organizes possible explanations around a clearly defined outcome.
When to use it
Use it when several cause families may contribute and the team needs to plan evidence checks.
Simple example
Seal leaks are explored across machine, method, material, measurement, people and environment hypotheses.
Branches are hypotheses, not verified causes. Record what evidence would support or weaken each one.
5 Whys
What it is
A questioning technique for building and testing a causal explanation one link at a time.
When to use it
Use it for a specific problem when the team can examine evidence behind each proposed why.
Simple example
A wrong leaflet leads the team from the observed pack to staging and changeover checks, with evidence required at every link.
Five is not a quota. Branch when mechanisms differ and do not treat consensus as proof.
Root Cause Analysis
What it is
A disciplined investigation of the mechanisms and system conditions that allow a defined problem to occur.
When to use it
Use it when containment is complete but the problem may recur unless the enabling conditions change.
Simple example
A team checks the actual material, method, records and failure path before choosing a corrective action.
There may be interacting causes. Stop the causal chain where evidence stops and avoid defaulting to blame.
06
Improvement
Run a bounded trial
6 methods · explore →A3 Problem Solving
What it is
A concise improvement story that connects the current condition, target, analysis, countermeasure and follow-up.
When to use it
Use it when a team needs one shared view of a problem and the reasoning behind the proposed change.
Simple example
A team records a 40-minute changeover baseline, tests advance staging and checks quality as well as time.
Filling every box does not prove the explanation. Keep evidence and uncertainty visible.
DMAIC
What it is
Define, Measure, Analyze, Improve and Control: a staged method for improving an existing process with evidence.
When to use it
Use it for a recurring, measurable problem that needs a longer investigation and a sustained control plan.
Simple example
A team defines a defect measure, validates collection, checks causes, trials one change and assigns a response to drift.
The stages can loop. Moving forward with an unreliable measure only makes the later analysis look more certain than it is.
PDCA
What it is
Plan, Do, Check, Act: a short learning cycle for stating an expectation, testing it, reviewing evidence and adapting.
When to use it
Use it for focused changes where the team can run a bounded test and learn quickly.
Simple example
Plan a new staging rule, trial it on one approved shift, compare search time and quality, then adopt or revise it.
“Do” is a test, not a permanent rollout. Define the expected result and guardrails before starting.
Kaizen
What it is
Continuous improvement through frequent learning and practical changes made with the people who know the work.
When to use it
Use it to build an everyday improvement habit rather than waiting for only large projects.
Simple example
A team tests a new material location for one week, reviews travel time and adjusts the standard together.
Kaizen is not a suggestion box. Ideas need a problem, a test, an owner and a check of what changed.
SMED / Quick Changeover
What it is
A systematic way to reduce changeover time by moving suitable work outside the stop, simplifying internal work and standardizing the sequence.
When to use it
Use it when long setups force large batches, reduce availability or make the schedule less responsive.
Simple example
Tooling and verified materials are prepared before shutdown, while internal adjustment steps are simplified and timed.
Do not transfer unsafe or unmeasured work to another person or shift merely to make the recorded stop look shorter.
Poka-Yoke / Mistake Proofing
What it is
Designing a process to prevent a specific error or detect it before the consequence travels downstream.
When to use it
Use it when a repeat error mechanism is understood and a practical prevention or detection control can be tested.
Simple example
A connector is keyed so the wrong orientation cannot be assembled, then challenged under controlled conditions.
Training and reminders may help, but they do not physically or logically prevent the error.
07
Standardize
Make the better method repeatable
4 methods · explore →Standard Work
What it is
The current agreed best method for performing repeatable work safely, consistently and visibly.
When to use it
Use it after learning has established a reliable sequence, or when variation in method creates avoidable problems.
Simple example
A cell documents the work sequence, key quality points, expected time and response to an abnormal condition.
Standard work must be usable and revisable. Freezing a poor method only standardizes the waste.
5S / 6S
What it is
A repeatable way to sort, organize, clean, standardize and sustain a workplace. 6S adds safety as an explicit lens.
When to use it
Use it when clutter, searching, unclear locations or changing workplace conditions make work harder to perform consistently.
Simple example
A packing cell marks tool locations, removes obsolete supplies and adds a weekly check with an owner.
A one-day cleanup is not 5S. The standard and follow-up routine are what make the change last.
Total Productive Maintenance
What it is
A shared approach to equipment effectiveness that combines planned maintenance, operator care, loss prevention and continuous improvement.
When to use it
Use it when recurring equipment conditions reduce availability, speed or quality and ownership is fragmented.
Simple example
Operators complete defined cleaning and inspection while maintenance analyzes repeat failures and plans deeper work.
Operator care must not transfer technical work beyond training or authorization. Protect planned maintenance time.
Jidoka
What it is
Building the ability to detect an abnormal condition, stop or contain it and prevent defects from continuing downstream.
When to use it
Use it when equipment or a process can recognize a meaningful failure and needs a clear response.
Simple example
A sensor detects a missing component and prevents the next cycle until the approved check is completed.
Automatic stopping must be designed around consequence, safe recovery, false alarms and bypass risk.
08
Follow through
Keep ownership and review visible
4 methods · explore →Shift Handover
What it is
A two-way transfer of current status, unresolved risks, temporary controls and next actions between teams.
When to use it
Use it wherever work, equipment or decisions continue across shifts or owners.
Simple example
The outgoing team records the line state, pending approval and next-action owner; the incoming team confirms the critical points.
A completed form does not prove understanding and must not replace permits, releases or required escalation.
Visual Management
What it is
Making normal conditions, priorities, progress and abnormalities understandable at the place and time of work.
When to use it
Use it when teams must ask for basic status or when a problem is visible only after reports are compiled.
Simple example
A shift board shows plan, accepted output, constraints and owned actions with consistent definitions.
More boards do not mean more clarity. Remove stale measures and design the response to abnormal status.
SMART Goals
What it is
Goals written to be specific, measurable, achievable, relevant and time-bound.
When to use it
Use them when a vague intention needs a clear result, owner and review date.
Simple example
Reduce median approval waiting time from 18 hours to 10 hours by November 30 while maintaining the defined quality check.
A precise target can still be the wrong target. Connect it to the customer and the process, not only a deadline.
Hoshin Kanri
What it is
A management process that connects a few strategic priorities to measurable work, owners and review routines.
When to use it
Use it when departments pursue too many disconnected projects or daily work is detached from strategy.
Simple example
A site turns a delivery priority into a small set of annual breakthroughs, team measures and monthly reviews.
A cascade of targets is not alignment if teams cannot surface conflicts, capacity limits or learning.
Staffing calculator
01 / FREE TOOL
Plan the next shift
Turn workload, available time and rate into a capacity conversation.
Plan staffingPareto Priority Lab
02 / FREE TOOL
Understand a recurring problem
See where losses concentrate. Check the evidence before choosing a countermeasure.
Explore Pareto LabValue calculator
03 / FREE TOOL
Make the business case
Separate the value of time released from money you can actually save.
Estimate the valueNEW TO LEAN?
Start by seeing the work.
Lean is a way to understand how work flows, what gets in its way, and how a team can improve it through small, checked changes.
Read the practical introduction →ORDREL / LEAN KNOWLEDGE HUB
Lean tools, explained without the jargon.
Understand what each method does, when to use it and which ORDREL tool can help you put it into practice.
All Lean concepts →Manufacturing methods, worked through
Guides with fictional examples, calculation checks and links to the working tools. Start with your question, then test the assumptions against your own process.
OEE Losses, Utilization and Targets: What to Measure
Separate availability, speed and quality losses from schedule utilization. Use a reconciled OEE example without turning a generic target into a promise.
Manufacturing Staffing: Calculate Operator Requirements
Estimate manufacturing operators from workload, labor time and productive time. Work through a staffing example, rounding, process caps and limitations.
Time Study: Observations, Standard Time and Allowances
Plan a manufacturing time study, distinguish observed time from a justified standard, and compare allowance conventions with a checked worked example.
Cycle Time vs Takt Time vs Lead Time in Manufacturing
Compare measured cycle time, demand-based takt and end-to-end lead time. Calculate a fictional shift and understand what each measure can tell you.
5 Whys in Manufacturing: Follow Evidence, Not a Script
Work through a fictional packaging problem with 5 Whys, evidence checks and a countermeasure trial. Learn when to branch or stop an investigation.
Fishbone Analysis: From Suspected Causes to Evidence
Build a manufacturing fishbone diagram, separate observations from hypotheses and plan useful cause checks before choosing countermeasures.
A3 Problem Solving: A Worked Manufacturing Example
Connect an observed manufacturing gap to evidence, countermeasures, a trial and follow-up in an A3. Includes a fictional changeover example.
DMAIC in Manufacturing: Stages, Evidence and Deliverables
Use Define, Measure, Analyze, Improve and Control to organize an existing-process investigation. See practical evidence and a fictional defect-rate example.
Pareto Analysis of Production Losses: A Worked Example
Rank manufacturing losses using comparable categories and a correct cumulative percentage. Distinguish a Pareto priority from a verified root cause.
Poka-Yoke: Manufacturing Mistake-Proofing Examples
Distinguish prevention, detection and warning in mistake-proofing. Plan safe challenge checks and connect a proposed control to a verified error mechanism.
Manufacturing Shift Handover: Information That Supports Action
Prepare a useful manufacturing shift handover with current status, open actions, temporary controls and receiver checks. Includes a fictional example.