Question

Use OEE but want to know whether OEE is a suitable approach to measure/benchmark/compare the performance of each of its plants in the UK?

Answer 1

OEE is an improvementmeasure and is used as part of the improvement cycle.Unfortunately, much is made of the 85% ‘World Class Standard’ an arbitrary target found in the original TPM literature. Not only is this target out of date (Nissan in Sunderland are running welding lines at 92-93% OEE) it gives the wrong message. A customer has no interest in your OEE – that is an internal measure, which relates to your efficiency and costs. The is far more interested in a measure such as On Time In Full (OTIF) ie did I get my order?
Running a manufacturing business on an arbitrary efficiency measure rather than a customer satisfaction measure is a recipe for
disaster. The best use of an OEE target such as 85% is to recognise that if you are reaching that level and the customer is still not getting his orders on time, then you may have a capacity
constraint.

OEE does not tell us if we have a problem, the customer does. What OEE does do is help us analyse the problem and make improvements. This is why Toyota use it as a spot measure on a
particular machine where there is a capacity or quality problem.Calculating the OEE of anything other than a discrete machine or automated line is pointless; we have far better measures of the
efficiency of a factory or department as a whole.
OEE developed out of the need for improvement groups to have a way of measuring and analysing equipment problems as part of
their Define, Measure, Analyse, Improve, Control cycle. OEE defines the expected performance of a machine, measures it and provides a
loss structure for analysis, which leads to improvement. It can then be used as a tracking measure to see if improvement is being
sustained ie if control is sufficient.