February 26, 2025
In 1961, a visionary engineer at Toyota, Seiichi Nakajima, recognized that production data tells meaningful stories — stories that will transform manufacturing as we know it. He created the Overall Equipment Effectiveness (OEE) metric to translate the language of production lines into actionable insights. Today, manufacturing leaders rely on OEE to turn equipment data into production success stories. This guide reveals how.
Manufacturing excellence begins with measurement. Organizations can achieve remarkable results when they track performance metrics that capture the full spectrum of their operations.
OEE is a crucial metric for organizations aiming to gauge the efficiency and health of their production lines. The measure is industry-agnostic, and OEE examples can be found anywhere from the automotive assembly lines to food processing facilities. When it comes to tracking performance, OEE looks at these three fundamental aspects:
OEE can have a massive impact on all aspects of manufacturing, from optimizing cycle times and reducing downtime to driving long-term business profitability. Improving OEE even by a single percentage point can translate into tangible benefits that ripple through the entire production ecosystem. Some of the benefits organizations can see are:
Businesses who wonder how to improve OEE in manufacturing need to start small, introduce gradual improvements in their processes, and track changes in performance over time.
Driving OEE takes more than improving a single process on the production line. Instead, optimizing equipment effectiveness requires careful orchestration of technology and processes, as well as how people interact with both to improve performance.
From prepared foods manufacturers who need to manage complex recipes to ingredients manufacturers who have to maintain precise standards under varying production conditions, improving OEE can help businesses remove bottlenecks and optimize their workflows to drive ROI.
Here are some strategies on how leading manufacturers achieve that.
Organizations learning how to improve OEE discover that every plant faces six fundamental challenges that shape their collective ability to maximize productivity:
TPM is a comprehensive manufacturing strategy that integrates equipment maintenance as a fundamental aspect of operational excellence. It involves training all employees — from machine operators to senior managers — to prevent equipment issues before they arise.
Specifically, TPM emphasizes proactive and preventive maintenance to minimize downtime and improve productivity. Key practices include regular equipment inspections, immediate problem-solving, and ongoing staff training to foster a workplace culture of continuous improvement and accountability. This approach not only extends the life of machinery but also enhances overall production efficiency.
Another key strategy for driving OEE is moving away from reactive to proactive maintenance practices. Machine monitoring systems can transform complex facility data into actionable insights, enabling maintenance teams to:
Manufacturers have a number of advanced productivity tools to choose from which can translate streams of data into stories that teams can act upon.
Today’s manufacturing systems have evolved significantly to integrate data across previously siloed operations. Here we look at the rise of new technologies and how they improve OEE across industries.
The Industrial Internet of Things (IIoT) has transformed manufacturing floors into living networks of shared knowledge. By integrating connected sensors and smart devices, organizations today can convert isolated data points into a unified intelligence stream that drives OEE improvement in a meaningful way.
While basic data collection identifies obvious inefficiencies, modern IIoT platforms reveal complex patterns by analyzing correlations between maintenance records, quality data, and production metrics. This multi-layered analysis helps teams spot emerging issues before they impact OEE.
The days of clipboards and manual tracking sheets have given way to digital processes that automate data collection. Smart sensors and automated technologies can empower teams to:
The manufacturing world abounds with real-world examples that demonstrate how new technologies create lasting changes in productivity. Here we share one of them.
Technical Help in Engineering and Marketing (T.H.E.M) is a New Jersey-based contract packaging business whose manual processes undermined its ability to scale. The shuffle of paper and scratch of pens once echoed across their production floors. With 80 full-time employees and 300 temporary workers managing 13 assembly lines across two plants, supervisors were used to tracking critical data by hand. This, however, meant that they had to wait hours or sometimes days to gain vital production insights.
This disconnect between teams created invisible barriers, slowing their ability to adapt and improve across their extensive packaging operations for liquids, powders, and pharmaceuticals. The leadership team knew it was time for a change. When the business implemented QAD Redzone as their connected workforce solution, they didn’t just replace paper — they rewrote their entire operational story.
The numbers tell a compelling story of transformation:
Want to see similar gains in productivity? Check out Redzone’s full suite of productivity tools specifically built for the manufacturing floor!
Technology is only one side of the coin when it comes to OEE improvement. The other looks at three foundational methodologies — Lean Manufacturing, Six Sigma, and Theory of Constraints — which offer distinct yet complementary paths to enhanced productivity.
When it comes to improving OEE, Lean Manufacturing provides a dynamic framework for cutting waste and streamlining production. At the heart of Lean is the relentless pursuit of only those activities that add value while eliminating inefficiencies that deplete resources and slow production.
Teams eager to adopt Lean principles can begin their journey with precise value stream mapping to pinpoint wasteful steps, streamline workflows, and optimize machine use, dramatically improving productivity and operational efficiency.
Six Sigma complements Lean Manufacturing by providing a data-driven framework to reduce process variation and prevent quality defects. This method uses statistical analysis to quantify and understand variability in production, allowing manufacturers to pinpoint the root causes of defects and prevent them from compromising product quality.
Through systematic defect reduction, Six Sigma directly impacts OEE by decreasing rework time and increasing productive operation hours.
Another great methodology for improving OEE is the Theory of Constraints — a powerful management philosophy that focuses on identifying and managing bottlenecks that limit system performance. It follows these five key steps:
This iterative process ensures that as one issue is resolved, attention is immediately turned to the next area of potential improvement, driving sustained performance enhancements.
OEE is always a moving target. Therefore, manufacturers who strive for excellence always keep tabs on their machinery, technological advancements, and new methodologies that can help them optimize and improve OEE even further.
Manufacturing floors buzz with untapped wisdom. Every operator, maintenance specialist, and quality inspector carries insights born from hands-on experience. When organizations create spaces for these voices to be heard, magical moments of innovation emerge.
The most successful manufacturing teams discover that continuous improvement grows from trust and open dialogue. A maintenance technician spots a way to reduce changeover time. A quality specialist suggests a simpler way to check specifications. An operator discovers how slight adjustments to machine settings yield better results. Each observation adds a brushstroke to the larger picture of excellence.
Behind every production challenge lies an opportunity for growth. Root Cause Analysis serves as a powerful investigative tool that invites teams to look beyond surface-level symptoms and unearth the fundamental causes of problems.
The process begins with a simple question: “Why?” Teams gather around whiteboards, sharing observations and insights. Each “why” peels back another layer of understanding:
This collaborative exploration reveals not just problems but opportunities. Solutions emerge not from top-down directives but from shared understanding and collective wisdom.
Manufacturing facilities that achieve significant OEE improvements combine powerful data analytics with practical shop floor experience. Below we share how structured approaches to problem-solving transform daily operational challenges into opportunities for sustainable improvement.
The Information, Decision, Action (IDA) methodology emerged from manufacturing teams who discovered that data alone doesn’t drive improvement. This helps production teams translate numbers into meaningful change by creating a shared language between operators, maintenance specialists, and leadership. Like a well-choreographed dance, each element of IDA flows naturally into the next, turning insights into action through three key stages:
This approach creates more than just operational improvements — it builds bridges between departments and shifts, turning individual expertise into collective wisdom.
Now that we’ve looked at different technologies and methodologies that can have a direct impact on OEE, let’s look at some real-world success stories that illustrate how driving OEE can transform productivity and profitability.
Prepared Foods manufacturers face unique challenges in managing complex recipes, maintaining consistent quality, and optimizing production efficiency. Companion Baking’s transformation demonstrates how digital solutions can drive significant OEE improvements in this sector:
Companion Baking addressed its process control challenges across an extensive range of 320 stock-keeping units (SKUs) by adopting Redzone to connect equipment with sensors and by providing tablets to workers for real-time data tracking and communication. This shift led to marked improvements in their operations:
Consumer Packaged Goods manufacturers require consistent productivity across multiple facilities while managing complex production schedules. Post Holdings’ transformation across their global operations demonstrates how digital solutions can scale OEE improvements enterprise-wide:
Post Holdings addressed the challenge of standardizing processes and enhancing productivity across its 36 manufacturing plants within five global divisions by transitioning from manual whiteboard tracking to Redzone. Initially tested at their Michael Foods plant in Chaska, MN, the new process facilitated:
The journey to peak OEE combines proven methodologies like Lean and Six Sigma with modern digital tools that connect teams in ways never before possible. Yet the most powerful improvements emerge when organizations align their people, processes, and technology — transforming data into insights, insights into actions, and actions into sustained productivity gains that reshape manufacturing excellence.
Book your Redzone demo today and join a thriving community of manufacturing innovators! Discover how our digital tools transform real-time production insights into stellar OEE results. Don’t miss out — see how connected teams lead to superior results!
The Six Big Losses represent the most common barriers to manufacturing excellence: planned stops, unplanned stops, and micro stops that affect availability. Speed losses and quality issues, including startup rejects and production defects, complete this fundamental framework. These challenges affect every manufacturing facility differently, yet they share common patterns that teams can learn to recognize and address. Smart manufacturing teams can use this framework to identify issues and optimize their manufacturing workflows.
Modern manufacturing technology serves as a bridge between human expertise and production efficiency. Industrial Internet of Things (IIoT) sensors act as the eyes and ears of the production floor, gathering real-time data that teams can access from anywhere in the facility. Predictive maintenance systems combine artificial intelligence with operator insights to spot potential issues before they cause downtime, while automated data collection creates a shared language that unites teams across shifts.
High OEE eliminates workflow disruptions and leads to more predictable production flows, while quality improvements reduce waste and rework costs. Perhaps most importantly, when OEE rises, workplace satisfaction typically follows as teams spend less time firefighting and more time making meaningful improvements to their processes.
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