Performance measurement using overall equipment effectiveness (OEE): literature review and practical application discussion

The quest for improving productivity in the current global competitive environment has led to a need for rigorously defined performance-measurement systems for manufacturing processes. In this paper, overall equipment effectiveness (OEE) is described as one such performance-measurement tool that measures different types of production losses and indicates areas of process improvement. Analysis is done on how OEE has evolved leading to other tools like total equipment effectiveness performance, production equipment effectiveness, overall factory effectiveness, overall plant effectiveness, and overall asset effectiveness. Two industrial examples of OEE application are discussed, and the differences between theory and practice analysed. Finally, a framework for classifying and measuring production losses for overall production effectiveness is proposed. The framework harmonizes the differences between theory and practice and makes possible the presentation of overall production/asset effectiveness that can be customized with the manufacturers needs to improve productivity.