The Real ROI of Measuring and Using OEE in Your Shop
If you’re a small or medium-sized manufacturer, you already know the feeling:
A machine goes down for “just” 20 minutes… again.
A changeover takes twice as long as it should.
Scrap and rework eat another chunk of the day
You tell yourself it’s normal. It’s part of manufacturing.
But it’s not normal — it’s expensive. Most shops quietly leave 30–40 % of their potential output (and profit) on the floor every single day. I’ve worked with dozens of shops just like yours. When they finally start measuring and doing something about OEE, the reaction is almost always the same:
“Why didn’t we do it like this years ago?
What OEE Actually Is (in Plain English)
OEE is simply the percentage of planned production time that is truly productive.
It’s calculated as three factors multiplied together:
Availability × Performance × Quality = OEE %
Availability — What percentage of the scheduled time was the equipment actually able to run? (downtime kills this)
Performance — When it was running, did it run at full speed or crawl along? (small stops, slow cycles, and changeovers hurt this)
Quality — Of the parts that came off the machine, how many were actually good on the first pass?
A perfect score is 100 %. World-class is 85 %+.
The average manufacturer? Around 60 %.
Many small and medium shops start in the 45–65 % range.
That gap between 60 % and 85 % is pure profit you’re not capturing.
The Real Cost of Ignoring OEE
Let’s put numbers to it.
Take a typical job shop or contract manufacturer with 15 machines running one or two shifts:
Annual throughput value: $4–12 million
Average OEE: 60 % → You are using only 60 % of the capacity you already paid for.
That 40 % loss usually equals $800,000 – $3 million per year in missed contribution margin — gone. Not in big dramatic failures, but in hundreds of tiny cuts:
15-minute stops that happen twice a shift
Operators waiting for the next job or first-piece approval
3–5 % scrap and rework that everyone thinks is “normal”
Even unplanned downtime alone costs most SMEs $50,000 – $150,000 per hour when you factor in labor, overhead, missed shipments, and overtime to catch up.
The ROI Most Shops See When They Finally Start Taking OEE Seriously
Once owners and teams start measuring OEE and acting on the data, the gains come fast:
Typical first-year results I’ve seen (and industry studies confirm):
12–25 percentage point OEE improvement in 6–12 months
15–40 % increase in output from existing equipment (no new capital)
$150,000 – $600,000+ added to the bottom line in the first year alone
Payback on any software/training in 3–9 months
One client (a 45-person precision machining shop) went from 58 % to 79 % OEE in nine months. The extra capacity let them take on a new customer worth $1.1 million a year — without buying a single new machine.
Another metal fabricator eliminated most of their weekend overtime once they fixed the top five reasons their presses were sitting idle.
These aren’t outliers. They’re what happens when you finally see where the waste is hiding.
Why Logic and Emotion Both Say “Do This Now”
Logic:
You already own the machines, the building, and the people. Getting 20–30 % more output from them is the highest-ROI project in your building — usually 300–1000 % ROI in the first year.
Emotion:
There’s something deeply satisfying about walking onto the floor and seeing machines actually running when they’re supposed to. Your best operators stop fighting fires and start solving problems. The whole shop feels calmer, prouder, more in control.
The Workshop: Small-Group, Hands-On, Maximum Impact
I only take five people per session — because real learning happens when we can dig into your actual data, your actual machines, and your actual bottlenecks.
In two intensive days you will know exactly how to:
Set up simple, accurate OEE measurement in your shop (manual or digital — whatever fits your stage)
Identify your top losses
Run huddles that actually fix things instead of just complaining
Build an improvement roadmap that delivers 10–20 points of OEE in 6–12 months
Calculate the dollar value of every improvement so you can justify (and celebrate) the wins
Spots are limited to five because I work through your real numbers during the workshop.
If you’re tired of leaving money on the floor and ready to get the absolute most from the equipment you already own, click here: appointments to grab one of the remaining seats.
Your machines can do more. Let me show you how to make them prove it.
See you in a workshop on your shop floor.