OEE as a Leading KPI

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    Dean O’Keefe


    I am currently looking into system capacity improvements at Hamad International Airport, Qatar.

    I was tasked with revsing the KPIs on which we are measured as the incumbent O&M services provider and one such KPI which i will use to measure the system capability is OEE (the A*Q*P factors being agreed with the client).

    So, i begin measuring data and get a mean of 85.90% and a Std Dev of 0.9583.

    I am vastly experienced in baggage sysyem engineering/improvements etc so know a realistic target for my work is 90% so i am now posed the question….To benchmark the system as is, what lower and upper spec limits should i use….

    I ran a benchmark capability analysis in Minitab using (this is the bit where i need help) the mean minus 3 Std Dev as my lower limit and 90% as my upper. Is this a good way of doing this? i am left with approx. 82.15 LSL and 90 USL and get a Zbench of 3.87. Am i way off the mark or is using 3 Std Dev from the mean a good way off seeting my LSL. This is important as although i am using this for analysis, we will be measured on OEE as a contractual KPI.

    Please help…..



    Are you sure you aren’t confusing spec limits with control limits? Spec limits are determined by the customer, i.e. what are their upper and lower tolerances? Statistical tools such as Minitab cannot tell you the spec the limits. You have to get these from the customer, external or internal. Control limits only help you to determine whether or not the process is in statistical control. They say nothing about whether or not the process is meeting customer specifications.



    @DeanOK1969 – as @straydog identifies, Spec Limits have nothing to do with control limits. Your spec is what the customer will find acceptable. Thus, why would your customer not be more satisfied with outcomes above 90%? There should be no upper limit on the spec in this case. The data itself will determine your control limits, you don’t “set” them.

    I think a more salient question should be whether OEE is the proper metric. Is it sufficiently forward looking to be a good metric? Taking measurements on a mechanical/production process is typically good practice as the physics are constant and the system is stable. In the case of an airport, are the components of OEE constant and predictable? I think not. You have weather that can be highly variable and unpredictable, and airlines that have varying policies and standards that are also not standardized and uniform. I think you need different metrics. Just my humble opinion.


    Mike Carnell

    @deanok1969 I agree with MBBinWI conclusion but maybe for a different reason. As you said OEE is the calculated value of 3 other calculated values (A,Q & P). If you want to control this then it makes much more sense to control at the lower level (the whole idea of dependent variables which all of these are versus independent variables which none of these are so what are you actually controlling). This is like that commercial on television where you have a guy monitoring the bank for bank robberies).

    That part is pretty basic. The part that bothers me is now that you have it what you believe is industry average you want to do the benchmarking BS and say that is good enough. Is it? What if nobody in the industry is satisfying the customer? You just become the fastest pig in a pig race. It doesn’t really make you fast.

    Just my opinion.

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