Introducing OEE as a measure of lean Six Sigma capability

Purpose – The current paradigm for assessing overall equipment effectiveness (OEE) is challenged as being anachronistic to the needs of businesses that now require a more holistic indicator of plant and process effectiveness. The purpose of this paper is to introduce a new framework that expands the original OEE measure to inform business performance at multiple levels focusing on adding benchmarkable indicators of asset management effectiveness and process capability. The ability to compare internal performance against external competition and vice verse is argued as being a critical attribute of any performance measurement system. Design/methodology/approach – The research methodology taken incorporated an action research approach using a pilot study combining case study research with an action research process of planning, observing and reflecting summarized as taking an action case research design. Findings – The OEE and related literature is replete with many different enhancements to the original OEE framework. Many of the revised OEE frameworks move away from a standard OEE format taking away the opportunity to benchmark against plant and process performance at multiple levels. Research limitations/implications – The enhanced OEE framework is developed and tested in situ at a single factory manufacturing large batches of similar products. Future research should look to further develop the OEE framework in both continuous process environments and asset intensive service industry environments. Originality/value – The enhanced OEE framework introduces a measure of Six Sigma process capability using extant data from the OEE framework. Similarly, indicators of plant reliability, maintainability and asset management effectiveness are calculated taking extant data from the OEE framework. This enhanced OEE framework combines measures of process effectiveness, asset management effectiveness, gross process performance, net process performance and Six Sigma process capability into a single lean Six Sigma key performance indicator of process/plant performance.