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The current competitive environment is characterized by a progressive pressure on margins due to increasing material/resource costs and customer expectations for lower prices, higher quality and faster deliveries. Overall Equipment Effectiveness (OEE) can help to counter this pressure by providing an insight into the causes of equipment problems, low productivity and quality yield.

Overall Equipment Effectiveness is a measure of how well you do what you plan to do. In a single KPI it tracks levels of equipment reliability, capacity loss and quality defects so that they can be systematically improved. OEE is an essential driver of the pace of improvement.

The gains include increased capacity which reduces unit costs, improved flexibility to reduce finished goods inventories and improved material yield to directly improve bottom line profitability. Because increased OEE means less management firefighting it also frees up management time to focus on developing the business. Priceless!

Before investing in new and expensive capital equipment look at implementing an OEE system to identify the full potential of your current assets. A realistic goal is to increase OEE by up to of up to half over a 3 to 5 year period. 10 to 15% increases in OEE in the first 12 months are common which means more output or the same output in less time. What would that be worth to your business performance?