Evaluation and improvement of manufacturing performance measurement systems ‐ the role of OEE

Abstract The paper identifies six requirements: four critical dimensions (what to measure) and two characteristics (how to measure) of an overall manufacturing performance measurement system. The overall equipment effectiveness (OEE) measure in such a system is assessed against these ideal requirements. The current measurement systems, and the potential of OEE, of three manufacturing organisations are evaluated with the dimensions and characteristics as comparative data. A common weakness of the systems was that they did not measure flow orientation or external effectiveness to any great extent. Another weakness was a high degree of complexity and lack of continuous improvement. Field experiments in the studied organisations showed that use of OEE in combination with an open and decentralised organisation design could improve several of those weaknesses.