← Business Metric: Operational (all topics)
OEE (overall equipment effectiveness)
What it is
Availability multiplied by performance multiplied by quality - the share of planned production time that is genuinely productive. A plant running at nominal full capacity typically scores far below 100%
It is the standard manufacturing productivity measure
Impact on industries
- Decomposes lost output into three causes - downtime, slow running and defects - so improvement effort can be targeted
- Reveals hidden capacity, which is usually far cheaper to unlock than building new plant
- Optimising the measure can encourage running equipment that should be stopped, or producing to inventory rather than demand
- It measures the equipment, not the business - high effectiveness making unsold product destroys rather than creates value