UNHIDDEN
See it

OEE losses explained: the six big losses and how to find them

By Colquitt L. Davis III, author of UNHIDDEN · November 1, 2026 · @ColquittLDavis3

Overall Equipment Effectiveness (OEE) answers one question: of the time a line was scheduled to run, how much of it produced good units at full speed? Everything that isn't, is loss. The six big losses tell you what kind.

The formula

OEE = Availability × Performance × Quality

The six big losses

LossHitsWhat it looks like
1. BreakdownsAvailabilityEquipment fails and the line stops.
2. Setup and adjustmentsAvailabilityChangeovers, warm-up, tweaking until the first good unit.
3. Small stopsPerformanceJams, blocked or starved conveyors, sensor trips. Often too short to get logged.
4. Reduced speedPerformanceRunning below the ideal rate "to be safe" or because of wear.
5. Startup rejectsQualityScrap and rework while the line stabilizes after a start or changeover.
6. Production rejectsQualityScrap and rework during steady running.

A worked example

A shift is planned for 480 minutes. The line is down for 60 minutes (a breakdown and a changeover). Its ideal cycle is 1 minute per unit. It builds 350 units, and 340 of them are good.

A useful check: 340 good units × 1 minute = 340 minutes of fully productive time, and 340 ÷ 480 = 70.8%. The other 140 minutes are the hidden factory on this shift. Availability lost 60, performance lost 70, quality lost 10.

Using OEE without fooling yourself

What is one minute of your line worth?

Put your own numbers into the free line-cost calculator, then get the full method in the book.

Keep reading