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There’s a curious phenomenon in manufacturing circles. Mention that your plant achieved 85% OEE and watch the room light up with admiration. It’s like announcing you’ve joined an exclusive club, one with velvet ropes and a secret handshake. The number has taken on an almost mythical quality, a golden standard that separates the amateurs from the professionals.
But here’s what nobody wants to admit at those industry conferences: the pursuit of 85% might be the most expensive mistake your operation ever makes.
The Birth of a Benchmark
The 85% OEE benchmark didn’t descend from some manufacturing deity on stone tablets. It emerged from observations of Japanese automotive plants in the 1980s, a time when lean manufacturing was being codified into principles that could be taught and replicated. These facilities were operating at this level, and so the logic went, everyone else should aim for it too.
This is where the trouble starts. We took a descriptive observation and turned it into a prescriptive target. It’s like observing that Olympic swimmers train six hours a day and concluding that anyone who wants to be good at swimming should do the same. The reasoning skips over a rather important question: good at swimming for what purpose?
The plants that originally hit 85% weren’t chasing a number. They were solving specific problems in their specific contexts. The number was a outcome, not a goal. When we reverse this relationship, we create something far more insidious than simple inefficiency. We create a system that optimizes for the wrong things entirely.
What Gets Measured Gets Gamed
Every metric, once it becomes a target, loses its value as a measure. This isn’t cynicism; it’s human nature wrapped in organizational behavior. When leadership declares that 85% OEE is the goal, something predictable happens on the factory floor. People find ways to make the number look good.
The easiest path? Run what’s easiest to run. That problematic product line that requires three changeovers and careful attention? Suddenly it gets deprioritized. The equipment that needs frequent quality checks? Let’s run it faster and hope for the best. The preventive maintenance that would take the line down for four hours? It can wait another week.
You end up with beautiful OEE scores and a business that’s quietly bleeding from a thousand small cuts. Customer orders get delayed because you’re running what maximizes equipment uptime, not what the market needs. Quality issues slip through because stopping to fix them properly would hurt your numbers. Equipment fails catastrophically because you’ve been deferring maintenance to keep availability high.
The irony is thick enough to cut with a knife. In chasing world class OEE, you’ve created a decidedly mediocre operation.
The Three Dimensions of Deception
OEE’s elegance is also its Achilles heel. It multiplies three factors: availability, performance, and quality. This makes it comprehensive in theory, but in practice, it creates a shell game where losses can be hidden by shuffling them between categories.
Consider availability. If a machine sits idle, it hurts your OEE. But what if you schedule less production time? Suddenly that same idle machine doesn’t count against you because it wasn’t scheduled to run anyway. You’ve improved your metric without improving anything real.
Performance tells a similar story. Running equipment at rated speed is wonderful unless that rated speed was set conservatively decades ago. Modern sensors and controls might allow faster operation, but why risk it? You can hit 100% of a mediocre target and call it success.
Quality rejection rates can be massaged too. Redefine what counts as a defect. Implement rework processes that turn bad parts into acceptable ones. You’re not running more efficiently; you’re just moving the bodies to a different room.
This isn’t meant to impugn anyone’s integrity. These adaptations happen naturally, almost invisibly, as teams try to hit targets in complex environments. The problem isn’t the people; it’s the oversimplification of using a single number to capture a multidimensional reality.
The Opportunity Cost Nobody Calculates
Here’s where the trap gets truly expensive. Every hour spent pushing from 80% to 85% OEE is an hour not spent on something else. In finance, they call this opportunity cost. In manufacturing, we seem to have forgotten the concept exists.
What if that same energy went into reducing changeover time on your bottleneck operation? Or developing closer relationships with key customers to understand their emerging needs? Or training operators to handle basic maintenance tasks? Or redesigning products for easier manufacturing?
These activities won’t directly boost your OEE score. Some might even temporarily hurt it. But they could transform your competitive position in ways that OEE can’t capture.
There’s a parallel here to academic testing. Schools that teach to standardized tests often produce students who score well but lack deeper understanding or creativity. They’ve optimized for measurement rather than learning. Manufacturing isn’t so different. When we optimize for OEE, we risk creating operations that look efficient on paper but lack the adaptability and resilience that actually matter.
The Context Problem
An 85% OEE in a high volume, low mix automotive plant means something completely different than 85% in a job shop making custom components. In the first environment, you’re running the same part for weeks at a time on dedicated equipment. In the second, you’re doing five changeovers a day on flexible machines.
Comparing these numbers is like comparing the fuel efficiency of a freight train to a taxi. Both transport things, but they’re designed for fundamentally different purposes. The train should be more efficient at what it does, but that doesn’t make the taxi inferior. It makes it appropriate for its context.
Yet we persist in using the same benchmark across wildly different environments. A medical device manufacturer making regulated products with extensive documentation and testing requirements is held to the same standard as a consumer goods plant stamping out millions of identical widgets. It’s absurd when you say it out loud.
The dangerous part is that managers in the job shop or medical device plant internalize this benchmark. They feel like failures for not hitting a number that was never appropriate for their operation in the first place. Resources get diverted to chase OEE improvements that don’t actually improve business outcomes.
What the Number Hides
OEE tells you nothing about several things that might matter more than efficiency. It doesn’t capture flexibility or responsiveness. It ignores innovation and improvement capabilities. It’s blind to employee engagement and skill development. It can’t see supply chain resilience or customer satisfaction.
A plant might run at 75% OEE but turn around custom orders in days rather than weeks, commanding premium prices and intense customer loyalty. Another might hit 90% OEE by running huge batches of standard products, building inventory nobody needs while customers wait for something slightly different.
Which operation is actually performing better? The answer depends entirely on the business strategy, but OEE won’t help you figure that out.
This is reminiscent of the old story about the drunk searching for his keys under the streetlight, not because that’s where he lost them, but because that’s where the light is. We measure OEE not necessarily because it’s the most important thing, but because it’s measurable. The light is good there.
The Diminishing Returns Curve
Every improvement initiative follows a predictable pattern. Early gains come easily and cheaply. Later gains become progressively harder and more expensive. This isn’t unique to OEE, but the magic number fixation makes us ignore this reality.
Going from 60% to 70% OEE might require some basic discipline and simple fixes. Going from 75% to 80% demands more sophisticated approaches and investment. Pushing from 80% to 85% often requires heroic efforts and substantial capital. And getting beyond 85%? You’re now in a realm where you might spend millions to gain a single percentage point.
The question nobody wants to ask: is it worth it? Sometimes yes, often no. But when 85% is enshrined as the target, the question doesn’t get asked. The target must be hit, economics be damned.
Smart organizations think in terms of diminishing returns. They ask what else could be done with the resources required to squeeze out another point or two of OEE. Sometimes the answer is to keep pushing on efficiency. Often the answer lies elsewhere entirely.
The Innovation Paradox
High OEE typically requires standardization and repeatability. You want processes that run the same way every time with minimal variation. This makes perfect sense for efficiency. It’s also the enemy of experimentation and innovation.
Trying new approaches means accepting temporary inefficiency. Testing different methods means downtime and potential quality issues as you work out the kinks. Developing new capabilities requires pulling people and equipment away from production. All of this massacres your OEE numbers.
Organizations fixated on hitting 85% create cultures that resist experimentation. Why would an operator suggest a different way of doing something if it might hurt the team’s performance metrics? Why would a manager approve a trial run of new technology if it means missing this quarter’s OEE target?
The result is a slow calcification. Processes freeze in place. Improvements become incremental rather than transformational. The operation gets very good at doing things a certain way while the world changes around it. Eventually, someone disrupts the industry with a fundamentally different approach, and the high OEE plant finds itself obsolete despite its impressive efficiency scores.
A Better Question
Instead of asking “How do we hit 85% OEE?” try asking “What level of equipment effectiveness makes sense for our business model?” The answer might be 70%. It might be 95%. It depends on factors that OEE itself can’t tell you about.
Are you in a business where flexibility and speed to market matter more than pure efficiency? Maybe lower OEE with faster changeovers and smaller batches serves you better. Are you in a commodity business where cost per unit is everything? Then push OEE hard, but be honest that you’re sacrificing other capabilities to get there.
This requires stepping back from the benchmark and thinking strategically about what actually creates value in your specific situation. It requires confidence to tell your board that 78% is actually optimal for your business, even if competitors crow about hitting 85%. It requires understanding that manufacturing excellence isn’t about hitting universal benchmarks; it’s about aligning operations with strategy.
The companies that do this well don’t ignore OEE. They use it as one tool among many, understanding both its value and its limitations. They track it, analyze it, and work to improve it. But they don’t worship it. They don’t let it become the tail that wags the dog.
Moving Forward
If you’re currently chasing 85% OEE, ask yourself what you’re not doing as a result. What problems are you ignoring? What opportunities are you missing? What capabilities are you failing to develop? The answers might be uncomfortable, but they’re likely important.
Consider expanding your scorecard. Track responsiveness metrics alongside efficiency. Measure innovation and improvement rates. Monitor customer satisfaction and employee engagement. Look at total cost of ownership, not just equipment uptime. Build a picture of operational health that’s richer than any single number can provide.
Most importantly, be willing to make conscious trade-offs. If hitting 85% OEE requires sacrifices that hurt the business in other ways, have the courage to optimize for business success rather than benchmark achievement. That’s what true operational excellence looks like.
The goal isn’t to abandon efficiency. It’s to pursue it in service of something larger rather than as an end in itself. Numbers like 85% can be useful guideposts, but they make terrible destinations. The trap isn’t in having benchmarks. It’s in letting them become blinders that prevent you from seeing what actually matters.
Your operation is unique. Your challenges are specific. Your opportunities are particular to your situation. Why would a one size fits all benchmark possibly make sense? World class performance isn’t about hitting predetermined numbers. It’s about relentlessly improving the things that actually drive success in your world.
The real benchmark is simpler and harder than 85% OEE: are you getting better at what matters? Everything else is just noise under a streetlight.