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OEE: the first Manufacturing KPI

by Chris Johnstone

May 3, 2010

Having spoken at conferences on Manufacturing KPIs, normally the first question is "what KPIs should I be measuring" and the stock response is "well it depends". I'm honestly not trying to be difficult with that response because inherently your KPIs should be defined from your company goals. However, all things being equal, the first Manufacturing KPI to measure, and one that can provide you with a great deal of information, is OEE. OEE stands for Operational Equipment Effectiveness and in essence it measures the productivity of a manufacturing operation, taking into consideration availability, performance and quality. Using three factors and not just one guarantees a very powerful analysis.

Another trend I see is companies wanting to measure too many KPIs at once. As a benchmark, I would say 5 KPIs is a good starting point, any more and you start to lose focus on individual aspects. You should also reassess your KPIs regularly. Some KPIs maybe constant but most will change over time because your company focus will change. A great aspect to remember about KPIs is that by just measuring you are well on your way to improving.

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