Overall Resource Effectiveness (ORE) - an improved approach for the measure of manufacturing effectiveness and support for decision-making

Overall Equipment Effectiveness (OEE) provides a quantitative metric, based on the elements Availability, Performance and Quality, for measuring the effectiveness of individual equipment and entire processes. This is significant but insufficient because not only those three factors have an impact on the overall performance of a machine or process but also some others such as the efficiency usage of raw materials, their quality and cost, as well as the environment (e.g. logistics, production system, labour, etc.) where the equipment or process operates. This paper presents an improved approach, Overall Resource Effectiveness (ORE), which considers those elements in the overall effectiveness evaluation. The paper shows the logical development of the concept and formulas used in the calculation of ORE. Then, a practical investigation of this approach is done through a case study. The case study demonstrates that OEE is not a “generic” measurement system appropriate for all types of processes as well as the broader perspective and information of performance that can be obtained from the use of ORE.