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As the name suggests, OEE is an overall measure that reflects performance from several aspects, it computes parameter of availability, performance and quality into single key process indicator expressed as a percentage. Out of these parameters, performance rate (%) determines that “does the machine produce level of output that it should do” ? The simplest way of calculating the performance rate is “[Actual output / Predicted output ]% “ Actual output : we consider all parts including good and defective Predicted output : Based upon actual availability and the machine cycle time sometime, performance rate is mis - calculated due to : Scenario-1: Team forgets to consider rejected part into actual output which results wrong performance rate like below example: Data Entry Unit Case-1 Good product: 800 pcs Defective Product: 200 pcs Actual Output ( Good+Defective): 1000 pcs Predicted Output: 1200 pcs Performance Rate ( with defective part): 83.33% % Correct Performance Rate ( without defective part): 66.67% % Wrong Scenerio-2: Some time team adds old stock also in actual output for showing higher throughput which becomes higher than predicted output and result more than 100% performance rate. Case-2 Good product: 800 pcs Defective Product: 200 pcs Actual Output ( Good+Defective): 1000 pcs Old stock for posting: 300 pcs Predicted Output: 1200 pcs Performance Rate ( with defective part): 83.33% % Correct Performance Rate ( with old stock for posting): 108.33% % Wrong Scenerio-3: Actual output can never be more than predicted output otherwise performance shows more than 100% which indicates that cycle time is wrongly set. Case-3 Good product: 1100 pcs Defective Product: 200 pcs Actual Output ( Good+Defective): 1300 pcs Old stock for posting: 300 pcs Predicted Output: 1200 pcs Performance Rate ( with defective part): 108.33% % Wrong In this case need to review ideal cycle time OEM and subject matter expert

Performance Rate is the one of the parameter for OEE calculation that measures actual throughput against designed throughput. Manufacturers set the benchmark to achieve the world class results that is generally 85% for manufacturing sector The table below shows right calculation method for OEE estimates for a manufacturing process that produces finished goods at the required throughput. The 3 scenarios listed below demonstrate how performance is commonly assessed incorrectly in an effort to artificially raise OEE for the process: Scenario 1: Considering design speed instead of standard speed (average actual throughput) – Few manufacturers consider design speed for inflating OEE and believe that there is no opportunity for improvement, thereby reaching maximum available throughput Scenario 2: Considering actual throughput as best throughput achieved instead of average actual throughput – Some managers take best speed achieved in the entire month or period and consider this value for OEE calculations Scenario 3: Increasing production counts for same run time by changing customer specification limits of few parameters such as weight