Overall Equipment Effectiveness (OEE) is the perfect KPI for driving business process improvements in equipment asset intensive industries. OEE, which is expressed as a percent, is the product of multiplying its three elements – ‘Availability, Performance/Rate, and Quality.’ If a plant runs 8,760 hours in a year at the highest sustainable production rate with zero quality defects, OEE is a perfect 100%. Any deviations from 100% represent losses – and opportunities for improvement.
Poor OEE often results from production equipment assets not being dependable enough to meet the requirements of the business, poor production practices or raw material supply chain problems, and/or the market for the plant’s prosecution being soft or the marketing organization overselling the plant’s production capabilities. Irrespective the what’s causing a loss, it will reveal itself in the form of poor OEE performance. Thus, careful tracking and analysis of OEE is a tremendous business-process improvement tool that can be employed by leaders in any asset intensive industry.
Our ongoing series of articles and case studies will reveal how you can employ OEE analysis to drive improvements in your throughput, revenue, and profitability. Often, these business process improvements enhance customer satisfaction, safety, and environmental performance (including greenhouse gas emissions).