What is Overall Equipment Effectiveness (OEE)?
Overall Equipment Effectiveness (OEE) is a tool that helps manufacturing leaders answer the question: “Am I making money?”
The ultimate answer to that question (Am I making money?) comes too late—at the end of the month, quarter or year, when the accountant delivers the Profit & Loss statement. The Profit & Loss statement is, at best, a snapshot in time. And worse, it is seen through a rearview mirror.
Manufacturing leaders need tools to evaluate whether they are on track to meet their profitability goals. When things aren’t on track, they need real-time diagnostic tools that enable them to drill down to the root cause, so they can make necessary changes.
An OEE measuring system gives leaders up-to-the minute status about three critical inputs to manufacturing profitability:
- Availability: Are my machines (assets) running?
- Performance: Am I meeting production goals?
- Quality: Is my quality OK?
By tracking these three metrics (and their relationship) over time, leaders can build correlation between OEE and financial performance.