All manufacturing sites have some form of measure to indicate how well they have performed based on requirements and target set. This could be against budget, customer requirements, productivity or capability of the equipment. There may be several measures used to indicate performance against the various metrics. The most widely used measure to determine performance against capability of the equipment is Overall Equipment Effectiveness which is often referred to as OEE.
The overall intent is to maximise the use of the equipment to produce what it is capable of within the specified timeframe. Ideally the equipment should run at its required rate and make good quality product for the duration. In practice, this is rarely the case and there would be occasions when downtime occurs or inferior quality products are made. Some of this is planned stoppages due to product changeovers or equipment maintenance where as in other cases the stoppages have not been predicted and so unplanned downtime occurs. This can be due to equipment breakdown, inferior raw materials, sub-optimal conditions, etc. To be able to maximise the utilisation of the equipment it is worthwhile knowing what is causing the loss between actual performance and the ideal state. This can help target improvement efforts to minimise or eliminate the losses to get as close to the ideal performance as possible.