190 IEEE TRANSACTIONS ON SEMICONDUCTOR MANUFACTURING, VOL. 18, NO.
1, FEBRUARY 2005
Equipment Effectiveness: OEE Revisited
A. J. de Ron and J. E. Rooda, Member, IEEE
Abstract—Overall equipment effectiveness (OEE) is a metric
that has been accepted completely in the semiconductor industry.
OEE is simple and clear, and standards and guidelines have
been developed. Nonetheless, literature indicates imperfections
in applying OEE with regard to time base and rate efficiency. As
literature lacks a basic framework for OEE, effectiveness has been
approached systematically that resulted in a new equipment effec-
tiveness . The main difference between OEE and concerns the
choice of the time base. OEE does include equipment-independent
conditions, such as lack of input items. This condition is not caused
by the equipment but by the environment of the equipment.
has been defined to get a performance measure that is related to
equipment-dependent states only, viz. effective state consisting of
productive state, scheduled down state, and unscheduled down
state. Because of the stand-alone condition, the equipment effec-
tiveness expresses the (equipment) internal losses, while utilization
expresses the external losses. By using , equipment can be
compared and improved. It can be concluded that the advantage
of over OEE is that real equipment effectiveness is measured as
the influence of utilization (equipment-independent conditions) is
eliminated.
Index Terms—Overall equipment effectiveness (OEE), overall
equipment efficiency, performance measures, semiconductor in-
dustry, state model.
I. INTRODUCTION
I N LITERATURE, authors proclaim the importance of mea-
suring performance of processes in order to be able to per-
form improvement activities based upon these measures. There
is no doubt about the importance of performance measures. It is
reported that hundreds of performance measures are being used.
Managers want to have one clear metric and dislike this plurality
of information.
It is clear that performance measures should be created on a
well-defined basis, in order to get the right improvement activi-
ties. If the performance measure is not the right one, the set point
or benchmark value may be wrong and, as a result, the control
or improvement will not perform satisfactorily.
A further development of performance measures needs a
common basis as is underlined by remarks in earlier publi-
cations. For instance, Neely [1] has written that performance
measures are poorly defined and Lebas [2] says that few people
agree on what performance really means. Flapper et al. [3]
write that performance indicators are created on an ad hoc
basis; no or hardly any attention is paid to relations between
performance indicators.
Manuscript received March 1, 2004; revised June 16, 2004.
The authors are with the Systems Engineering Group, Department of Me-
chanical Engineering, Eindhoven University of Technology, 5600 MB, Eind-
hoven, The Netherlands (e-mail: a.j.d.ron@tue.nl; j.e.rooda@tue.nl).
Digital Object Identifier 10.1109/TSM.2004.836657
0894-6507/$20.00 © 2005 IEEE
Based upon the concept of overall equipment effectiveness as
proposed by Nakajima [5], Semiconductor Equipment and Ma-
terials International (SEMI) has developed a standard for def-
inition and measurement of equipment productivity. The stan-
dard is directed to measuring the effectiveness of equipment.
SEMI calls this metric overall equipment efficiency (OEE). This
metric is expressed entirely in terms of time. The standard has
been described in [6] and uses definitions as laid down in [7].
A guide to apply OEE is described in [8]. Currently, OEE is a
metric that has been widely accepted in the semiconductor in-
dustry. As OEE is a simple and clear overall metric, managers
appreciate such an aggregated metric instead of many detailed
metrics.
Huang et al. [4] write that the concept of OEE is becoming
increasingly popular and that it has been widely used as a quan-
titative tool essential for measurement of productivity in semi-
conductor manufacturing operations, because of an extreme ca-
pacity constrained facility investment. They state that traditional
metrics for measuring productivity, throughput, and utilization
are insufficient for identifying the problems and underlying im-
provements needed to increase productivity.
Several observations concerning the application of OEE have
been reported. They are directed mainly to the considered time
period, the application of rate efficiency, and some more general
remarks.
With respect to the considered time period, Ljundberg [9],
who uses OEE for TPM activities, concludes that it is more ap-
propriate to consider the available time as basis for the time mea-
surement than the loading time as suggested by Nakajima [5].
Gouvêa da Costa and Pinheiro de Lima [10] observe a
common mistake with respect to the definition of the theoretical
cycle time in the OEE description (should it be the theoretical
cycle time, the one specified by the machine, or the planned
cycle time, the one calculated by the industrial engineering
department for the operation?). They conclude that it should be
the planned cycle time. The authors use OEE for monitoring
and controlling performance of machines and processes in the
automotive industry in Brazil. They mention more misunder-
standings in the use of OEE, e.g., using OEE to measure the
capacity and using OEE to identify bottlenecks.
Jonsson and Lesshammar [11] present three case studies
which illustrate how OEE is used in industry. After executing
measurements to determine OEE, they remark that performance
was measured by quoting actual speed and optimum speed.
The optimum production speed differed between each profile
(measurement run) and was sometimes difficult to define.
They remark that it is important to use the same speed for a
specific profile at every single measurement. Otherwise, it is
not possible to compare measurements over time. They con-
tinue to state that a relevant variable was “minor stoppages.”
DE RON AND ROODA: EQUIPMENT EFFECTIVENESS: OEE REVISITED
Data showed that these stoppages amounted to 20%, and short
periods up to 49%, of total stop time. They notice that it is
rather difficult to assess the time length of stoppages and that
there exists no clear limit between short downtime stoppages
and minor stoppages. Ljundberg [9] has found cases of positive
cycle time losses, which means that the process is run at a
shorter cycle time (or higher speed) than nominal. It originates
in many cases from a too low calculation of nominal speed. In
this way, some minor stoppages or time losses are hidden in
shorter cycle times or positive speed losses.
Leachman [12] expresses rate efficiency as the ratio of the
theoretical time to complete the reported work and the reported
(measured) production time. He remarks that machine speed
may vary in different instances of the same processing oper-
ation, either because of differences in operator handling and
preparation time or because of brief machine stoppages not re-
ported as “down” time or because of not reported brief idle pe-
riods that are considered as production time. He continues by
stating that even with no variation in machine speed, faithfully
reporting all down time and all idle time depends upon the man-
ufacturing organization.
Chand and Shirvani [13] introduce two alternatives for the
OEE. The authors suggest that the OEE is not an exact mea-
sure of equipment effectiveness as setups, changeovers, and ad-
justments are included. They define a so-called total equipment
productivity, which is OEE related to loading time. That means
that they exclude nonscheduled downtime in this measure. To
exclude setups, changeovers, and adjustments the net equip-
ment effectiveness is defined as the true quality and effective-
ness measure of equipment when running.
Dal et al. [14], who report about the use of OEE, not only
as an operational measure but also as an indicator of process
improvement activities, remark that OEE provides an excel-
lent perspective on production improvement but should be bal-
anced by other, more traditional operational measures, thereby
retaining an overall perspective of the manufacturing environ-
ment. It should be noted that OEE is best suited for environ-
ments of high-volume process-based manufacturing where ca-
pacity utilization is of a high priority and stoppages or disrup-
tions are expensive in terms of lost capacity.
Ljundberg [9], Dal et al. [14], and Jeong and Phillips [15]
emphasize the need for accurate measures in the determina-
tion of OEE. Most factories in the semiconductor industry do
not undertake a careful measurement of OEE and their strategy
for computing overall efficiency must be considered in relation
to the factory’s capabilities in data collection [12]. Konopka
[16] remarks that an increase of output by just a few percent
would contribute significantly to the semiconductor manufac-
turer’s ability to recover overheads in the estimated 5 years de-
preciation time allocated to a fab. So, the measurement system
should be able to measure this few percent.
Leachman [12] remarks that just knowing the overall effi-
ciency score is insufficient for identifying the underlying im-
provements to increase OEE. A breakdown of the overall effi-
ciency into its many components is required to focus and priori-
tize improvement efforts. These components are diagnostic per-
formance measures as they do not indicate the status of equip-
ment but the status of some detailed quantities and can be used
191
for improvement activities in relation to these quantities. Inspec-
tion of the components of OEE shows that some components
are mutually dependent, viz. operational efficiency and rate ef-
ficiency. This means that an improvement of the rate efficiency
results in a decrease of the operational efficiency and visa versa.
The foregoing observations made in literature are directed to
definitions and measurement of components of OEE. It can be
concluded that these observations indicate that a further specifi-
cation is needed for the application of OEE and its components.
The aim of this paper is to develop a systematic approach
regarding equipment effectiveness as a contribution to a further
specification of definitions and application of it.
Section II contains, for the sake of completeness, a concise
description of OEE in accordance with SEMI [6]. In Section III,
OEE is revisited and a systematic derivation of equipment effec-
tiveness is presented. Similarities and differences of OEE and
are discussed and illustrated in Section IV. Conclusions are
given in Section V.
II. OEE
In [7], six main states of manufacturing equipment are de-
fined; see Fig. 1.
The states are described as follows.
1) Nonscheduled state: Equipment is not scheduled to be
utilized in production, such as unworked shifts, week-
ends, and holidays (including startup and shutdown).
2) Unscheduled down state: Equipment is not in a condi-
tion to perform its intended function due to unplanned
downtime events, e.g., maintenance delay (mainte-
nance is waiting for personnel or parts), repair, change
of consumables or chemicals, and out-of-spec input.
3) Scheduled down state: Equipment is not available to
perform its intended function due to planned downtime
events. This state includes the following activities: pro-
duction test, preventive maintenance, and setup.
4) Engineering state: Equipment is in a condition to
perform its intended function but is operated to con-
duct engineering experiments. The engineering state
includes activities as: process engineering, equipment
engineering, and software engineering.
5) Standby state: Equipment is in a condition to perform
its intended function but is not operated. The standby
state includes the following activities: no operator
available (including breaks, lunches, and meetings),
no items available (including no items due to lack of
available support equipment), and no support tools.
6) Productive state: Equipment is performing its intended
function. The productive state includes activities as:
regular production (including loading and unloading of
units), work for third parties, rework, and engineering
runs done in conjunction with production units.
In [6], the following definition of overall equipment effi-
ciency OEE is given:
theoretical production time for effective units
OEE
total time
192 IEEE TRANSACTIONS ON SEMICONDUCTOR MANUFACTURING, VOL. 18, NO. 1, FEBRUARY 2005
Fig. 1. OEE equipment states.
The OEE is built up by means of availability efficiency (AE),
operational efficiency (OE), rate efficiency (RE), and quality
efficiency (QE)
OEE AE OE RE QE
with
equipment uptime
AE
total time
production time
OE
equipment uptime
theoretical production time for actual units
RE
production time
theoretical production time for effective units
QE
theoretical production time for actual units
In these definitions, theoretical production time means pro-
duction time at strictly theoretically efficient rates without
efficiency losses.
III. OEE REVISITED
The description given in [6] is directed to equipment, but it
is noted that OEE is impacted greatly by factors beyond the
equipment itself, including operator, recipe, facilities, material
(input items) availability, scheduling requirements, etc. As this
impact may result in OEE values that show the influence of
factors beyond the equipment instead of the equipment itself,
we make a distinction between stand-alone equipment and in-
tegrated equipment. OEE is directed to equipment integrated in
a manufacturing environment so that OEE includes influences
of this environment. We prefer a metric directed to stand-alone
equipment in order to be able to compare and to improve equip-
ment itself.
To specify equipment effectiveness we consider the equip-
ment as a manufacturing system, consisting of a system and a
system environment. The system performs the manufacturing
function. To be able to perform the manufacturing function the
system must fulfill conditions enforced by performing the func-
tion, e.g., skilled workers to operate the equipment, consum-
ables, supporting tools, and so on. Equipment-dependent oper-
ations are related to the system, while equipment-independent
operations are related to the system environment. For instance,
lack of input items is an equipment-independent operation as it
Fig. 2. Equipment states.
is not caused by the equipment, while the absence of an oper-
ator is an equipment-dependent operation as the system is not
prepared to perform the intended function. Blocking is another
example of an equipment-independent operation as no output
items can be released because of lack of buffer space. In gen-
eral, equipment-dependent operations can be eliminated by re-
pair, improvement, or redesign of the system.
In the sequel, we use the word equipment not only when we
mean equipment but also if we mean system.
In Fig. 1, some states contain equipment-dependent events as
well as equipment-independent events. In order to create states
that are related to equipment-dependent events only or to equip-
ment-independent events only, equipment states have been re-
defined as illustrated in Fig. 2. In this figure, preventive main-
tenance at scheduled intervals based upon equipment cycles or
equipment conditions is an equipment-dependent operation that
is included in the scheduled down state. The classification of
setups can be argued. Setups result from scheduling, which is
an equipment-independent activity. The way setups are carried
out and time equipment is nonproductive depends on how easily
setups for the particular equipment can be carried out. Setups
have been classified as scheduled downtime because downtime
periods during setup depend upon equipment.
We have assumed that (un)scheduled down states only can
occur during an equipment-dependent state.
The definitions of the states are as follows.
1) Nonoperational state: Equipment is not scheduled to
perform its intended function. This state includes un-
worked shifts, weekends and holidays (including shut-
down and startup), and engineering activities (process
engineering, equipment engineering, and software en-
gineering).
2) No-input state: Equipment is in a condition to perform
its intended function but is unable to operate due to a
lack of input items.
3) No-output state: Equipment is in a condition to per-
form its intended function but is unable to release items
due to a lack of buffer space.
4) Unscheduled down state: Equipment is not in a condi-
tion to perform its intended function due to equipment-
dependent unplanned downtime events. This state in-
cludes repair and verification runs, no operator avail-
able, and no support tool present.
DE RON AND ROODA: EQUIPMENT EFFECTIVENESS: OEE REVISITED 193

TABLE I
STATE TRANSITION TABLE

Fig. 3. State relations.

5) Scheduled down state: Equipment is not available to

perform its intended function due to equipment-de-
pendent planned downtime events. Preventive mainte-
nance at scheduled intervals based upon equipment cy-
cles or equipment conditions is included in this state as
well as change of consumables and setups.
6) Productive state: Equipment is performing its intended
function. This state includes regular production, re-
work, and work for third parties.
Fig. 3 shows the relations between the states. The figure is
presented in a notation as described by Harel [17]. In this figure,
a distinction can be noticed between equipment-independent
states: nonoperational state, no-input state and no-output state;
and effective state consisting of equipment-dependent states:
scheduled down state, productive state, and unscheduled down
state. The equipment-independent states are initiated by activi-
ties not related to the equipment.
The state transition table, showing previous state, trigger, and Fig. 4. Equipment-independent losses.
next state, is given in Table I.
To get a metric related to the stand-alone equipment, a sepa-
ration between equipment-dependent losses and equipment-in-
dependent losses has been made. Fig. 4 shows the reduction of
total time into effective time . Total time contains equip-
ment-dependent and equipment-independent states while effec-
tive time includes only equipment-dependent states. The ef-
fective time is the time base for the determination of effec-
tiveness.
The ratio of number of qualified items and effective time
Fig. 5. Manufacturing equipment.
is actual throughput of qualified items

Nonproductive downtime losses result in a reduction of the

(1)
To evaluate the performance we distinguish three types of
losses: nonproductive downtime losses, rate losses and quality
losses, and an ideal transformation; see Fig. 5.
time that the equipment can perform its intended function,
caused by the equipment itself. Sources for unavailability have
to be looked for within the equipment itself. The time that the
equipment is really performing its intended function, produc-
tion time , is a fraction of effective time . This fraction is
194 IEEE TRANSACTIONS ON SEMICONDUCTOR MANUFACTURING, VOL. 18, NO. 1, FEBRUARY 2005
availability that is the long-term fraction of the time that the
equipment is not down for repair [18]
(2)
The ideal transformation does not contain losses as these are
concentrated in the nonproductive time losses, rate losses, and
quality losses. This transformation results in the maximum
number of items obtained during production time .
This results in maximum throughput
(3)
Equipment rate specification will be in accordance with max-
imum throughput. If equipment manufactures items in accor-
dance with specifications but at a lower rate, equipment is in
the productive state. For the lower rate the output will be
items during production time . is a fraction of the max-
imum number of items . This fraction is called rate factor
(4)
The output of the transformation process is further reduced be-
cause of quality losses resulting from items that do not fulfill
specifications. The fraction of total items that are qualified is
known as yield . This is the definition according to [8]. Yield
includes rework and scrap. Leachman [12] remarks that line
yield is the product of the scrap rates of the process steps in the
flow. In [6], this percentage is called quality efficiency. Yield is
expressed by
(5)
Now, the relation between actual throughput and maximum
throughput can be derived, using (1)–(5)
The effectiveness is the fraction of maximum throughput that
the equipment is performing its intended function, i.e., to
produce qualified items. The derived equipment effectiveness,
called , can be expressed by
(6)
If measurements are not yet available, equipment effective-
ness can be estimated by using the planned value for
. is caused by the no-input time, which results in a fraction of
IV. OEE AND : SIMILARITIES AND DIFFERENCES
The main difference between OEE and is the approach of
equipment: integrated or stand alone. Metric OEE measures the
effectiveness of equipment including effects from other equip-
ment in front of and at the end of the equipment of interest.
This means that OEE does not monitor the equipment status
but a status consisting of effects caused by the equipment of
interest and other equipment. Metric measures the effective-
ness of stand-alone equipment in order to monitor the status of
the equipment itself.
The difference between OEE and can also be expressed
by the choice of the time base. Nakajima [5] takes the loading
time as time base, being the available time per day, which is de-
rived by subtracting the planned downtime from the total avail-
able time per day (or month). From observations in literature, it
has been remarked in the introduction that total available time
should be used instead of loading time. In [6], total time is used
as time base, which is defined as all time (at the rate of 24 hours
per day, seven days per week) during the period being measured.
In general, the time base should be the time period that equip-
ment is enabled to perform its intended function without being
limited by circumstances from outside. That means that only
failures caused by the equipment should be accounted for by the
equipment. The equipment is not responsible for equipment-in-
dependent failures. If, for instance, item supply to the equip-
ment is not possible, e.g., because of scheduling requirements,
this failure is not caused by the equipment. In this case, the fab
conditions may require such a scheduling but it should not be
put on the account of the stand-alone equipment. Therefore, by
using the time base should not include idle time caused by
lack of input items or any other equipment-independent failure.
This time base is the effective time.
Another result is that does not depend upon utilization,
as OEE does, but is measured directly by production time and
effective time. Utilization is defined as the time fraction that the
system environment allows the equipment to fulfill its intended
function. Having effective time as base time means that is
based upon a measure that includes all time losses due to down,
setup, or rework caused by the equipment itself. Sattler [20]
defines effective time as all cycle time except waiting for another
lot, which includes waiting for machine downtime and operator
availability and a variety of other activities.
Therefore, if different equipment types are compared by
using OEE, they might have the same value of OEE although
their values for equipment effectiveness differ. On the other
hand, two identical machines having identical equipment
effectiveness may have different values for OEE. This is
caused by the utilization of the equipment types that is included
in OEE. Equipment effectiveness is more appropriate to
compare equipment.
The differences and similarities between OEE and can be
illustrated by some examples. Table II shows measured data.
The results for OEE and are given in Table III.
As expected, the results show that the OEE assesses the effec-
tiveness much lower than the equipment really performs. This
total time that the system is enabled by the environment to per-
form (utilization); the value of this fraction is –
. So, in this case the value of OEE is determined for 57.1%
by the equipment environment and for 42.9% by the equipment
itself.
In the next example, we illustrate the influence of utilization.
Utilization is changed by reducing no-input time. The effect of
this change is that the production time increases. As we consider
DE RON AND ROODA: EQUIPMENT EFFECTIVENESS: OEE REVISITED
TABLE II
MEASURED DATA
TABLE III
RESULTS FOR OEE AND E
TABLE IV
MEASURED DATA
only operation-dependent failures, the total down time increases
too. The measured data are given in Table IV. The results are
given in Table V.
Comparing the results, as given in Table V with the previous
results given in Table III, shows that equipment effectiveness
does not change while OEE changes because of an improved op-
erational efficiency. The influence of utilization is shown more
particularly in Table VI. Equipment effectiveness does not
change because no-input time is related to the equipment envi-
ronment and not the equipment itself. The value of OEE changes
because the equipment environment changes.
In Section I, remarks about the application of rate efficiency
RE are given. In [6], RE is defined as the ratio of theoretical
production time for actual items and production time. Theoret-
ical production time for actual items is the multiplication of the-
oretical production time per item and number of actual items.
Theoretical production time per item is defined as the minimum
time to complete processing on one item of production assuming
no efficiency losses are present. The determination of theoret-
ical production time per item is based on continuous operation,
195
TABLE V
RESULTS FOR OEE AND E
TABLE VI
INFLUENCE OF UTILIZATION
where the equipment is assumed to operate in an ideal condi-
tion. In [8], a somewhat different definition is used for theoret-
ical time per item: equipment supplier specification for machine
production time per item, as best determined by experience or
time study measurements.
In equipment effectiveness , rate factor expresses rate
losses. The equipment manufactures items in accordance with
the specifications but at a lower rate. The rate factor is calculated
by choosing the maximum number of manufactured items in
accordance with the throughput as specified by the equipment
supplier. This approach is according to [8].
V. CONCLUSION
The objective of the OEE is to have a metric based upon mea-
surement of equipment states. SEMI defines OEE as the ratio be-
tween theoretical production time and total time, which means
that production time is not measured but calculated. As a result,
OEE is more an index than a performance measure.
OEE is not directed to equipment itself but includes effects
of the environment of equipment too. This is caused by viewing
time losses because of lack of input items or no buffer space
for items in the time base although this no-input or no-output
situation cannot be put on the account of equipment.
The derived system effectiveness includes only events that
are caused by the equipment itself. As a result, the time base for
measuring equipment effectiveness is the effective time. As a
consequence, does not depend upon utilization, which means
that is a real equipment metric.
ACKNOWLEDGMENT
The authors would like to thank H. Niesing and R. M. M.
Notermans for their contribution to the discussions.
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A. J. de Ron received the B.Sc. degree in electronics
and M.Sc. degree in applied physics from the Delft
University of Technology, Delft, The Netherlands,
and the Ph.D. degree in industrial engineering and
management science from Eindhoven University of
Technology, Eindhoven, The Netherlands.
For more than ten years he worked in industry, first
as a Director of Research and Development and later
as Managing Director. Currently, he is an Associate
Professor in design and innovation of manufacturing
systems at Eindhoven University of Technology. He
has published various papers and books in the field of remanufacturing and sus-
tainable production. His research interests include the performance of manufac-
turing systems.
J. E. Rooda (M’02) received the M.Sc. degree in
food technology from Wageningen University of
Agriculture, The Netherlands, and the Ph.D. degree
from Twente University, Enschede, The Netherlands,
in 1971 and 1978, respectively.
From 1971 until 1985, he was an Assistant Pro-
fessor and was active in the area of internal trans-
port systems of the Mechanical Engineering Depart-
ment, Twente University. In 1985, he became a Full
Professor in systems engineering, Department of Me-
chanical Engineering, Eindhoven University of Tech-
nology, Eindhoven, The Netherlands. His research interests include modeling
and analysis of discrete-event and continuous-time systems with a concurrent
behavior.
Dr. Rooda is a member of ACM, IFAC, IIE, and SCS.