Stochastic overall equipment effectiveness

This article focuses on the overall equipment effectiveness (OEE), a key performance indicator typically adopted to support Lean Manufacturing and Total Productive Maintenance. Unfortunately, being a deterministic metric, the OEE only provides a static representation of a process, but fails to capture the real variability of manufacturing performances. To take into account the stochastic nature of the OEE, an approximated procedure based on the application of the Central Limit Theorem is presented: the OEE is considered as a stochastic random variable and its probability density function (pdf) is generated through the aggregation of the pdf of the basic causes of waste. Notwithstanding its approximated nature, the procedure can be applied in most practical cases, since the accuracy is assured provided that the average OEE is lower than 90% and the variability of the losses is high. The validity of the approach has also been confirmed by an industrial application included in this article. The results obtained demonstrate that the stochastic OEE can help in battling variation, for it allows one to identify the hidden losses that account for most of the variability and to estimate the impacts of potential corrective actions in terms of both efficiency and efficacy.