Want FREE Templates on Strategy & Transformation? Download our FREE compilation of 50+ slides. This is an exclusive promotion being run on LinkedIn.

We have categorized 5 documents as OEE. All documents are displayed on this page.

Edward Deming, the father of modern quality management, astutely stated that, "If you can't measure it, you can't manage it." This encapsulates the fundamental principle behind OEE (Overall Equipment Effectiveness), a central metric in measuring manufacturing productivity. Enterprises strive to maximize this metric, as it directly impacts their Operational Excellence.




Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab




Flevy Management Insights: OEE


Edward Deming, the father of modern quality management, astutely stated that, "If you can't measure it, you can't manage it." This encapsulates the fundamental principle behind OEE (Overall Equipment Effectiveness), a central metric in measuring manufacturing productivity. Enterprises strive to maximize this metric, as it directly impacts their Operational Excellence.

Understanding OEE

OEE is a composite measure that indicates how well an organization is making use of its manufacturing equipment. It factors in availability (does the equipment function when needed?), performance (does it work at the desired speed?), and quality (does it generate high-grade outputs?). By combining these three vectors, OEE provides a comprehensive understanding of manufacturing efficiencies, or more accurately, the lack thereof.

Driving Performance Management with OEE

As with all metrics, the goal of tracking OEE isn't just to quantify current performance—it's to cultivate incremental improvements over time. Consequently, OEE shouldn't be viewed as a mere statistic, but as a pivotal instrument in your Performance Management toolkit. By enhancing the factors that contribute to OEE—equipment availability, speed, and quality—you drive overall manufacturing performance upward. Key Principles in Maximizing OEE:

Deploying Technology to Enhance OEE

Technology now plays a central role in elevating OEE by providing critical insights at the right intervals. Internet of Things (IoT) systems inform real-time equipment diagnostics and preempt malfunctions. Through Machine Learning and Predictive Analytics, organizations can foresee and mitigate anomalies, thereby boosting the availability and performance levels in the production process.

Uniting OEE with Strategic Goals

OEE doesn't function in isolation; it plays a central role in achieving Strategic Planning objectives and driving Digital Transformation. Minimum acceptable OEE levels should be an integral part of your strategic planning, setting standards that encourage a culture of excellence. OEE improvements direct technological investments that promote Digital Transformation. Thus, it bridges the divide between performance metrics and strategic ambitions.

Risk Management & OEE

OEE also aids in Risk Management. By unmasking inefficiencies, we can locate risks within our processes. Actioning these insights mitigates risks and equips the manufacturing setup to handle unanticipated scenarios more effectively. Consequently, OEE, via better Risk Management practices, contributes to business resilience—a top-of-mind concern for Fortune 500 C-level executives today.

In conclusion, OEE rests at the intersection of Strategic Planning, Performance Management, Digital Transformation, and Risk Management. It is a metric that matters immensely, not just for what it reveals about manufacturing productivity, but for its far-reaching implications on Operational Excellence. So, whether you're optimizing your existing manufacturing setup or laying the groundwork for an Industry 4.0 upgrade, remember your pursuit of Operational Excellence must be firmly rooted in OEE.

For effective implementation, take a look at these OEE best practices:


Explore related management topics: Digital Transformation Operational Excellence Quality Management Strategic Planning Performance Management Risk Management Machine Learning Business Resilience Internet of Things Industry 4.0 Overall Equipment Effectiveness Total Productive Maintenance




Additional Flevy Management Insights

Receive our FREE presentation on Operational Excellence

This 50-slide presentation provides a high-level introduction to the 4 Building Blocks of Operational Excellence. Achieving OpEx requires the implementation of a Business Execution System that integrates these 4 building blocks.