OEE in the Lean News

I saw a post from Michel Baudin, Is OEE a Useful Key Performance Indicator?  I don’t think it is.  A few years back I wrote a blog about OEE and how it is very unclear as to what is really happening in a facility.  It violates nearly every rule as to what is a clear and relevant metric.

Michel’s post started out with a bit from Jeffrey Liker’s post about OEE.  This is the piece I found interesting from Jeffrey Liker:

Ignacio S. Gatell questions whether companies using OEE really understand it, can explain it clearly to their customers, and understand what it means to compare OEE as a KPI across plants. He questions whether even plant managers understand how it is calculated and what it means.

The only good argument for OEE is that at a macro-level in a plant it provides a high level picture of how your equipment is functioning.

I have to agree with Liker’s statement.  OEE is good for a macro level idea of what is happening but you can’t understand what is happening without splitting it up into the components.  Seems like Michel Baudin is thinking the same thing.

It is an overly aggregated and commonly gamed metric that you can only use by breaking it down into its constituent factors; you might as well bypass this step and go straight to the factors.

This is one of those blogs that gives me some of my sanity back.  OEE seems to be so entrenched in “good business practices” it is hard to get people to move away from it.  I get a lot of looks like I am completely crazy when I bring up my point of view.  Thanks, Jeffrey and Michel.  I see I’m not the only one now.

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Posted on March 17, 2014, in Flip The Thinking, Metrics, Tools and tagged , , , , , . Bookmark the permalink. 2 Comments.

  1. Good commentary by all invovled. Metrics are only good if they can a) tell the right story and b) be actionable. If I saw an OEE drop, my first question would be “What factor or factors were the cause of the drop?” So yes, instead of looking at OEE we should just look at the factors individually because they are more immediately actionable.

    OEE itself is often misunderstood, but the three factors themselves are pretty cut and dry.

  1. Pingback: OEE in the Lean News | Lean Six Sigma Leadershi...

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