Overall equipment effectiveness

Seiichi Nakajima · 1982

One number combining how much of the time equipment runs, how fast, and how much of what it makes is good.

Its place in the frameworkBusiness Core›Manufacturing Operations

What it does

Availability times performance times quality. Multiplying rather than averaging is the design decision that makes it honest: three respectable-looking figures produce a poor one, which is usually a truer description of the line than any of them alone.

Reach for it when: When a line is believed to be running well and the output does not agree.
Where it stops: It measures the equipment, not the value. A machine can run at high effectiveness producing stock nobody ordered, and the number will approve.

Seiichi Nakajima, Introduction to TPM, Japan Institute of Plant Maintenance, 1982.

Why it sits at Manufacturing Operations

Where things are actually made — capacity, flow, quality and the maintenance that keeps all three possible. Applies wherever the organisation produces rather than only assembles.

A model is only useful when you reach for it at the right moment. This one answers a question that arises here — so it is filed here, and nowhere else. These are the working areas it serves:

Capacity planningGoldratt’s theory of constraints: identify the constraint, exploit it, subordinate everything else to it.
Production flowLean manufacturing and value stream mapping, which separate processing time from the far larger waiting time around it.
Quality managementStatistical process control and the quality management tradition from Deming and Juran on prevention over inspection.
MaintenanceTotal productive maintenance, and overall equipment effectiveness as the combined measure of availability, performance and quality.

All of Manufacturing Operations

What it touches elsewhere

Nothing in a business is decided on its own. A conclusion reached with this model at Manufacturing Operations lands in these other cores, whether or not anyone follows it there.

Business CoreProduction runs on assets, and the supply chain feeds it.
Goal CoreCapacity is a hard limit on what any growth goal can promise.
Data CoreYield, throughput and equipment effectiveness are among the most instrumented measures in any business.
Time CoreChangeovers, maintenance windows and lead times are all timing decisions.

Filed at the same place

These answer questions that arise at Manufacturing Operations too. Where they disagree with this one, the disagreement is the useful part.

Value stream mappingDraw the whole path a product takes, with the waiting included, and the waiting turns out to be most of it.
Six Sigma and DMAICReduce variation until defects are rare, working through a fixed five-step cycle with the measurements agreed up front.

Elsewhere in Business Core

These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.

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