From measuring overall equipment effectiveness (OEE) to overall resource effectiveness (ORE)

Abstract

Purpose – Overall equipment effectiveness (OEE) provides a quantitative metric based on the elements availability, performance and quality for measuring the performance effectiveness of individual equipment or entire processes. Although these elements are important, other performance factors such as the efficient use of raw materials and the production environment (e.g. production system, logistics, labour, etc.) in which the equipment or process operates may also have a significant contribution to process performance. The purpose of this paper is to present an alternative measure derived from OEE, overall resource effectiveness (ORE), which considers these factors. Design/methodology/approach – The paper reviews the OEE’s background and explores its limitations. Then, it shows the conceptual and mathematical development of the ORE measure and the formulas used for its calculation. Empirical and simulation-based investigations and applications of ORE are carried out through two cases study for its validation. Findings – The results derived from both the empirical and simulation-based investigations demonstrate that OEE may not be an appropriate measure for some specific processes and that ORE may offer a more complete perspective on and information of key performance indicators. Practical implications – ORE can provide production managers with more complete information concerning the performance of their processes. This will allow them to take better decisions regarding the management and actions needed to improve their processes. Originality/value – This paper presents a novel and alterative approach to measure the performance of manufacturing equipment and processes.