The Emerald Research Register for this journal is available at The current issue and full text archive

ve of this journal is available at

http://www.emeraldinsight.com/researchregister http://www.emeraldinsight.com/1355-2511.htm

Cross-functional team working Cross-functional

team working
for overall equipment for OEE

effectiveness (OEE)
C.J. Bamber 223
COrE Research Group, The University of Salford, Salford, UK
and OLC (Europe) Ltd, Preston, UK, and
P. Castka, J.M. Sharp and Y. Motara
COrE Research Group, The University of Salford, Salford, UK
Keywords Performance measures, Team working, Maintenance
Abstract Overall equipment effectiveness (OEE) is being used increasingly in industry. This
paper defines OEE and explores the purpose of this concept in modern operations. The paper
discusses OEE as a total measure of performance that relates the availability of the process to the
productivity and quality of the product. Therefore, the concept of OEE is appropriate to all
operations containing plant and machinery. Research has shown that the most successful method
of employing OEE is to use cross-functional teams aimed at improving the competitiveness of
business.

Practical implications
In order to address effectively all the six big losses and hence improve overall
equipment effectiveness (OEE), cross-functional team working is necessary.
Cross-functional teams have the combined necessary skills and knowledge of
the entire system of manufacture to identify correctly the practices and
activities that relate to the six big losses. Furthermore, the fact that a cross-
functional approach is taken gives the opportunity to address immediately
identified improvements or to ensure that plans could be developed during the
team meeting. This ensures the best utilisation of operational and other
resources because of the authority and responsibility of team members, who
represent various departments and functions within the organisation.

Introduction
Organisations adopt various approaches to measure their manufacturing
performances, most of them with a large number of measures on different
hierarchical levels, some of which have been shown to be contradictory (Kaplan
and Norton, 1992; Nakajima, 1989; Jones, 1994). Many of the measures used are
considered obsolete and inconsistent for various reasons. Schmenner and
Vollmann (1994) showed in an empirical study that most studied companies
needed seriously to consider changing their performance measurements. They
Journal of Quality in Maintenance
argued that most organisations were both using wrong measures and failing to Engineering
use the right measures in correct ways. This is serious and it therefore seems Vol. 9 No. 3, 2003
pp. 223-238
important to identify the critical dimensions in a performance measurement # MCB UP Limited
1355-2511
system (what to measure) and the optimum characteristics of the measures DOI 10.1108/13552510310493684
JQME (how to measure). Measurement systems could then be evaluated and improved
9,3 with the dimensions and characteristics as comparative data.
Likewise, the usefulness of most cost accounting systems, individual
measures as well as more comprehensive activity-based costing systems, are
frequently questioned since they do not cover manufacturing performances
relative to the competitive capabilities (e.g. Dixon et al. 1990; White, 1996).
224 Another serious problem with most performance measurement systems used in
organisations is that they often include too many different measures, which
makes it difficult to understand the ``big picture'' (Keegan et al., 1989).
Integration between measures is often problematic, and many papers have
emphasised that organisations have no effective system that covers all
necessary performance dimensions (e.g. Caplice and Sheffi, 1995; Ghalayini and
Noble, 1996; Maskell, 1991; Schmenner and Vollmann, 1994). This is why it is
not always obvious how organisations should measure manufacturing
performance.
Nakajima (1989), the author of the total productive maintenance (TPM)
philosophy, advocates OEE as a metric for the evaluation of equipment
effectiveness. OEE is often used as a driver for improving performance of the
business by concentrating on quality, productivity and machine utilisation
issues and hence aimed at reducing non-value adding activities often inherent
in manufacturing processes. Recent research (Ericsson, 1997) reports that
accurate equipment performance data are essential to the success and
long-term effectiveness of TPM activities, however individual equipment
performance should never be considered in isolation because overall factory
performance may or may not be dependent on individual machine performance.
This paper discusses the concept of OEE, which is investigated through a
case study organisation. The focus is particularly given to use of
cross-functional teams (CFT) within the case study organisation, and the case
study demonstrates that this approach can significantly increase the successful
implementation of the concept of OEE.

Research methodology
The epistemology of the research presented in this paper can be classified as
humanistic and holistic (De Poy and Gitlin, 1998). Accordingly, the authors
used case study research design as advocated by Yin (1989) and studied the
area of OEE in real-world settings. The aim of the authors was to investigate
OEE while participating in the process of OEE implementation in a natural
context (a case study organisation) in order to capture the insights of people at
different levels and from different departments. Voss et al. (2002) assert that
management consultants who are working in close contact with multiple case
studies are developing new ideas, hence this research is a result of collaborative
work between consultants and academics.
Data have been collected using various methods: participant observation;
unstructured interviewing; and archival sources of data (Bryman, 1989). These
data have been regularly documented and coded from field note observations
and interviews. Consequently, those notes were discussed and analysed by Cross-functional
researchers using knowledge elicitation techniques (Firlej and Hellens, 1991). team working
Techniques for data analysis were used during the research process; i.e. putting for OEE
information to different arrays; tabulating frequency of different events,
putting information in chronological order (Miles and Huberman, 1984).
The case study approach is often criticised for the scarcity of measurability.
This is because of the qualitative nature of data, which are based on 225
perceptions, and subjective interpretations of the researcher. The authors
recognised this fact and designed the research in order to meet the aspects of
the quality of research in terms of validity and reliability as advocated by
Bryman (1989), Yin (1989) and De Poy and Gitlin (1998). Therefore, the authors
used multi sources of evidence and used informants (case study organisation
workers) for evaluation of the findings (construct validity). Therefore, data
analysis using methods as described above should support internal validity.
The experience of consultants (although not reported in this paper) contributed
to the external validity of the research. Finally, reliability of the study is
assured by the recording of the data.

The background of OEE

If the extent of equipment failures and reasons for production losses are not
entirely understood, then any TPM actions cannot be deployed optimally to
solve major problems or arrest deteriorating performance. Production losses,
according to Ericsson (1997), together with other indirect and hidden costs,
constitute the majority of the total production costs. Nakajima (1988, 1989)
therefore suggests that OEE is ``a measure that attempts to reveal these hidden
costs''.

The purpose of OEE

The OEE measure can be applied at several different levels within a
manufacturing environment. First, OEE can be used as a ``benchmark'' for
measuring the initial performance of a manufacturing plant in its entirety. In
this manner the initial OEE measure can be compared with future OEE values,
thus quantifying the level of improvement made. Second, an OEE value,
calculated for one manufacturing line can be used to compare line performance
across the factory, thereby highlighting any poor line performance. Third, if the
machine's processes work individually, an OEE measure can identify which
machine performance is worst, and therefore indicate where to focus TPM
resources (Nakajima, 1988). In this respect the OEE measurement system
within a company becomes the fundamental measure of TPM activities, and in
fact the basis of improvements for the TPM system.
Dal et al. (2000) said that by utilising largely existing performance data, such
as preventive maintenance, material utilisation, absenteeism, accidents, labour
recovery, conformance to schedule, set-up and changeover data, etc., the OEE
measure could provide topical information for daily decision making. However,
the role of OEE goes far beyond the task of just monitoring and controlling. It
JQME takes into account process improvement initiatives, prevents the
9,3 sub-optimisation of individual machines or product lines, provides a systematic
method for establishing production targets, and incorporates practical
management tools and techniques in order to achieve a balanced view of
process availability, performance rate and quality.

226 Chronic and sporadic disturbances in measurement

It is of vital importance to measure and understand how to conduct
measurements of disturbances in the manufacturing process. Disturbances can,
according to Tajiri and Gotoh (1992), roughly be divided into two categories,
chronic and sporadic, depending on how often they occur (see Figure 1).
Chronic disturbances are usually small, hidden and complicated because they
are the result of several concurrent causes. Sporadic disturbances are more
obvious since they occur quickly and as large deviations from the normal state.
They occur irregularly and their dramatic effects (see Figure 1) are often
considered to lead to serious problems, but instead there are chronic
disturbances that result in the low utilisation of equipment and large costs
because they occur repeatedly as shown in Figure 1. Chronic disturbances are
more difficult to identify since they can be seen as the normal state and are
inherent in the system of manufacture. Identification of chronic disturbances is
only possible through comparison of performance with the theoretical capacity
of the equipment.

The six big losses

Chronic and sporadic disturbances in the manufacturing process (see Figure 1)
result in different kinds of waste or losses. These can be defined as activities
that absorb resources but create no value. The objective of OEE is to identify
these losses. It is essentially a bottom-up approach where an integrated
workforce strives to achieve OEE by eliminating the six big losses (Nakajima,
1988):

Figure 1.
Production performance
losses as a result of
chronic and sporadic
disturbances
Downtime losses: Cross-functional
. Breakdown losses categorised as time losses when productivity is team working
reduced, and quantity losses caused by defective products. for OEE
. Set-up and adjustment losses result from downtime and defective
products that occur when production of one item ends and the
equipment is adjusted to meet the requirements of another item. 227
Speed losses:
. Idling and minor stoppage losses occur when production is interrupted
by a temporary malfunction or when a machine is idling.
. Reduced speed losses refer to the difference between equipment design
speed and actual operating speed.

Quality losses:
. Quality defects and rework are losses in quality caused by
malfunctioning production equipment.
. Start-up losses are yield losses that occur during the early stages of
production, from machine start-up to stabilisation.
Jeong and Phillips (2001) argue that loss classification schemes are ultimately
tied to the industry type. Based on their research, Jeong and Phillips (2001)
propose the following classification of losses in capital-intensive industry:
. Non-scheduled time: time duration for which equipment is not scheduled
to operate. This time may include holiday and leave, etc.
. Scheduled maintenance time: time spent for preventive maintenance of
the equipment.
. Unscheduled maintenance time: time spent for breakdown.
. R&D time: time spent for the purpose of research and development.
. Engineering usage time: time spent for an engineering check up.
. Setup and adjustment time: time spent for setup and adjustment for
operation.
. WIP starvation time: time for which equipment is operating when there
is no WIP to process.
. Idle time without operator: time for which WIP is ready, however, there
is no operator available.
. Speed loss: time loss due to the equipment that is operating under the
standard speed.
. Quality loss: time for which equipment is operating for the unqualified
products.
JQME When assessing an organisational OEE, it is not necessarily important that
9,3 Nakajima's (1988) six big losses are used explicitly or definitively. However, it
is necessary to develop an organisation's own classification framework for the
losses, which should be associated with the components of availability,
performance and quality as expressed in equation (1) and Table I.

228 OEE analysis

The six big losses are measured in terms of OEE, which is a function of
availability (A), performance rate (P) and quality rate (Q), as shown in
equation (1):
OEE ˆ Availability …%†  Performance rate …%†  Quality rate …%†: …1†

The exact definition of OEE differs between applications and authors.

Nakajima (1988) was the original author of OEE and De Groote (1995) is one of
several later authors. The summary of their view on OEE provides Table I. The
differences in both these approaches are subtle, however for an organisation
wishing to measure their OEE these differences could be significant in terms of
OEE resultant figures. Alternatively, data may not be available or feasible to
collect in the form required for each formula. For instance, often companies
struggle to define an ideal cycle time, particularly in non-machinery and less
well-automated manufacture. Therefore, it is suggested by the authors that
whatever formula is used, the key to improving OEE is constantly in the
approach of both data collection and component (A, P, Q) calculation.

Data collection process

In the experience of the authors there are as many differing methods of
collecting data for the six big losses, therefore measuring OEE, as there are
organisations applying the concepts of TPM. The important point is that the
quality of data collection determines the accuracy of OEE (Jeong and Phillips,
2001). OEE is always measured in terms of the six big losses, which as
discussed above are essentially a function of the availability, performance rate
and quality rate of the machine, production line, or factory, whichever is the
focus of OEE application.

Nakajima (1988) De Groote (1995)

Availability (A) Loading time ± downtime Planned production time ±

Loading time unplanned downtime
Planned production time
Performance (P ) Ideal cycle time  output Actual amount of production
Operating time Planned amount of production
Quality (Q) Input ± volume of quality defects Actual amount of production ±
Input non-accepted amount
Table I. Actual amount
Classification of OEE
variables Note: Where OEE calculation for both measurement methods = (A)  (P)  (Q)
The availability rate (A) measures the total time that the system is not operating Cross-functional
because of breakdown, set-up and adjustment, and other stoppages. It indicates team working
the ratio of actual operating time to the planned time available. Planned for OEE
production time (or loading time) is separated from theoretical production time
and measures unplanned downtime in the equipment, i.e. by this definition
unavailability would not include time for preventive maintenance. This
definition gives rise to planning of preventive activities, such as preventive 229
maintenance, but it might lead to too much maintenance of the equipment and
set-up times that are too long. If planned downtime is included in the production
time, the availability would be significantly lower, but the true availability would
be shown. That would create motives for decreasing the planned downtime, e.g.
through more efficient tools for set-up and more efficient planned maintenance.
The performance rate (P) measures the ratio of actual operating speed of the
equipment (i.e. the ideal speed minus speed losses, minor stoppages and idling)
and the ideal speed (based on the equipment capacity as initially designed).
Nakajima (1988) measures a fixed amount of output, and in his definition (P)
indicates the actual deviation in time from ideal cycle time. De Groote (1995), on
the other hand, focuses on a fixed time and calculates the deviation in
production from planned. Both definitions measure the actual amount of
production, but in somewhat different ways.
The quality rate (Q) only takes into consideration the quality losses (number
of items rejected due to quality defects) that happen close to the equipment, not
the quality losses that appear downstream. This is a very introspective
approach. A wider definition of Q would be interesting, but would complicate
the calculations and interpretations. It should be according to which process
has caused the quality fault (and therefore needs improving) and this is not
always easy to identify.

Data analysis
Thus, owing to different definitions of OEE and other varying circumstances
between companies, it is difficult to identify optimum OEE figures and to
compare OEE between firms or shops. Some authors have tried to do it though;
e.g. Nakajima (1988) has indicated that under ideal conditions organisations
should have A > 0.90, P > 0.95 and Q > 0.99. These figures would result in an
OEE > 0.84 for world-class firms, and Nakajima considers this figure to be a
good benchmark for a typical manufacturing capability. Kotze (1993), on the
other hand, argues that an OEE less than 0.50 is more realistic. This figure
corresponds to the summary of different OEE measurements presented by
Ericsson (1997), where OEE varies between 0.30 and 0.80. These disparate
figures indicate the difficulties of comparing OEE between processes, factories
and across manufacturing sectors. Nevertheless the authors of this paper have
seen dramatic improvements in operating performance from choosing a
consistent measurement method for the six big losses and a company-specific
principle of calculating OEE from that method, with the ultimate aim of
increasing OEE toward levels of 0.85 and above, if possible. From this it should
JQME be noted that to calculate each of the six big losses requires a cross-functional
9,3 knowledge of the defining attributes of each loss.

CFT
Modern maintenance practice and world-class manufacturing operations are
aimed at utilising the knowledge and resources, of personnel from across many
230 manufacturing functions. Likewise TPM is a discipline founded on the
principle of involvement and, according to Nakajima (1988), TPM is based on
three interrelated concepts:
(1) maximising equipment effectiveness;
(2) autonomous maintenance by operators; and
(3) small group activities.
Within this context OEE can be considered to combine the operation,
maintenance and management of manufacturing equipment and resources (Dal
et al., 2000). This relationship needs interrelated disciplines working together
toward a single goal that is aimed at increasing the operational OEE (i.e.
factory OEE) through the identification and reduction in the six big losses.
Clifford and Sohal (1998) report that one of the benefits of team working that
companies recognise is ``increased productivity through improved machine
efficiency, improvements in up time and improved preventive maintenance''.
The teams can be developed using the model of Tuckman and Jenson (1977)
who outlined the four key stages as: forming; storming; norming; and then
performing (FSNP stages). Workers in such CFT ``pull'' together in order to
improve the overall performance (Wellins et al., 1991). In the initial stage,
sufficient time has to be provided for the alignment of team members so that a
team can proceed towards higher levels of team development. Nevertheless,
this issue depends heavily on the maturity of teamwork culture in the
organisation.
The authors advocate developing OEE CFT using a conceptual model based
on seven factors for successful implementation (FASI) of high performance
teams (Castka et al., 2001):
(1) organisational impact;
(2) defined focus;
(3) alignment and interaction with external entities;
(4) measures of performance;
(5) knowledge and skills;
(6) need of the individual; and
(7) group culture.
To develop an effective CFT, it is argued to follow the implementation plan
based on Deming's (1986) plan-do-check-act (PDCA) cycle. The relevant steps
are hence considered as:
 (1) assess the current situation using 7 FASI as an assessment tool (plan); Cross-functional
(2) define the barriers and the enablers (do); team working
(3) create team development plan (check); and for OEE
(4) implement the development plan (act).
Nakajima also suggests that the most effective application of OEE is by 231
process teams in conjunction with the application of the basic quality control
tools, such as Pareto and cause and effect charting. The results of operating
shop floor teams have been reported by Irani et al. (1997). Such applications can
be an important complement to the existing factory performance measurement
system. Within this context OEE must, therefore, be considered an operational
measure, rather than strategic (Nakajima, 1988).
The fundamental premise of the OEE measure is that it measures
``effectiveness'' of equipment, and in manufacturing terms effectiveness as
opposed to ``efficiency'' is considered as meeting customer needs, e.g. the correct
quality product when they want it at the right price. Hence, OEE is
fundamentally appropriate in manufacturing environments as it directly
measures product quality, loss and the abilities to deliver to a schedule. The
holistic and customer facing nature of this measure, therefore, requires many
disciplines (quality, production, maintenance, etc.) to analyse the OEE-related
data. This need for a CFT is essentially drawn out of the likelihood that the
necessary solutions aim at improving OEE-wide regime input and action from
different departments.

A case study research

At the case study organisation (company A) machining times have been a
challenge for operations management and supervisors, and a great deal of
effort is afforded in monitoring and correcting machining time issues. Further
to this, innovative clamping arrangements have been created alongside
maximised tooling paths and increased cutting speeds, making the case study
organisation (company A) truly innovative in machining practice. However,
when calculating the true OEE rate it was noted that a lot of improvement
potential was certainly considered possible. The accuracy and availability of
data in company A was such that OEE could be calculated directly from
existing data capture methods such as their resource planning and control
software system.
Figure 2 shows that OEE rates are less than 30 per cent on three machines,
and no machine centre assessed operated at higher than 75 per cent, even
though according to Nakajima (1988) the world-class performance level for
OEE is approximately 85 per cent. Notwithstanding this, a great deal of
anecdotal experimental evidence from the research team (authors) indicates
that low levels of OEE performance (> 45 per cent) is not unusual within
manufacturing organisations that have not previously attacked the six
big losses.
JQME
9,3

232
Figure 2.
OEE charts for five
machine centres at case
study organisation

The supervisors and management initiated an improvement team (Table II)

and immediately discussed improvement potential in delivery performance,
from which a cause and effect diagram was produced (see Figure 3). The team
assessed this cause and effect diagram and it was noted that the main areas for
concern were the availability of materials, tooling, clamping jigs and fixtures,
which currently brought the OEE figures down to a low rate. This was cause
for concern by the organisation as their efforts, in terms of ``performance
measures, focus and action'' had been nearly entirely on productivity rates,
with little regard for availability issues, although they realised something was
wrong as delivery dates to customers were often missed. Additionally, the
management had previously realised that obtaining promised tooling from
their customer was very difficult, but did not realise that this was a major
contributor to the loss of effectiveness of the system of operations and hence
severely affected the customer delivery performance. After analysis of the
situation, the improvement team noted no autonomous, planned or preventive

Job title Name Primary skill and team role for OEE

Production supervisor Nick Responsible for co-ordinating improvement on

M/C operator
Purchasing officer
Tool designer
Production planning manager
Maintenance engineer
Table II.
Team formation chart Student researcher
for company A
shop floor and ensuring resource is available
for production
Bob To promote the operators' viewpoint and has the
greatest knowledge of machine condition
Sharon Liaison with suppliers of goods
Frank Engineering and design knowledge
Mick To ensure that customer focus is maintained and
liaison with customers
Sharif To provide engineering and maintenance
department input and resource for actions
Chris To facilitate team meetings and motivate
individuals
 Cross-functional
team working
for OEE

233

Figure 3.
Brainstormed cause and
effect diagram showing
issues related to the six
big losses at the case
study organisation

maintenance activities for the machine centres existed and consequently

maintenance operated on a breakdown basis.
Company A soon realised that although the quality and productivity rates
were at world-class levels, i.e. in excess of 95 per cent as described by Nakajima
(1988), they had very poor availability figures, i.e. average was 48 per cent
compared to Nakajima's world-class expectations of 90 per cent. This in
essence means that when the machine centres were operating they were
operating to world-class levels, however the machines did not operate to
planned arrangements. As mentioned earlier, chronic disturbances are usually
small, hidden and complicated because they are the result of several concurrent
causes such as those causes shown in Figure 3. Therefore, the chronic condition
of machine performance had been accepted as normal, while effort for
improvement had been previously misguided. This is reflected in the possible
list of causes shown in the cause and effect diagram.
The issues highlighted by the cause and effect diagram shows that a cross-
functional approach to solving the low OEE problem is necessary. For instance,
although the machine operators could tackle the issues relating to necessary
improvements in programming of jobs or procedure correctness of operations
they are not able to do anything about sub-contractor delivery performance.
Likewise, the maintenance department need to address machine downtime with
the help of the operators because of the operators' in-depth knowledge of the
machine operating conditions. After consideration of many of the issues related
to the manning levels and conditions of machine centres the operators also
realised that management had to be involved to address shift patterns and shift
change over issues related to downtime on certain machines (see Table II for
team formation).
The critical role played by the team during that root cause analysis exercise
leading to the cause and effect diagram is clear in the above discussions.
JQME Furthermore, the fact that a cross-functional approach was taken lead
9,3 immediately to some of the issues raise, as above, being addressed immediately
because the authority and responsibility for identified change in practice
procedure or engineering was at hand in the team. Additionally, where
immediate action could not be taken to ensure improvement was implemented,
it was noted that plans could be developed during the team meeting that
234 ensured the best utilisation of operational and other resources.

OEE as an improvement driver for CFT working

According to Ishikawa (1982), the reason for collecting data should not be to
present neat figures, but to create a base for action and development
(improvement) of processes. This is very much linked to what data are collected,
how the analysis is carried out and how the performance information is used.
The data source may be internal or external, the data type subjective or objective,
the focus may be on the process input or outcome, and the reference external
benchmark or internal target (White, 1996). In these respects the data sources are
from within the system of operation (manufacturing wide or at machine level),
while the data type is certainly objective; the focus is both on the process and the
output of machines. Additionally, and as in the case study example above, the
external benchmark is given by Nakajima (1988, 1989) as world-class OEE levels
of 85 per cent, while an internal improvement target should be set for each
machine depending on the machine criticality in the system of manufacture.
There are three aspects of future performance improvements that Ishikawa
(1982) discussed:
(1) The set of measures should cover those aspects that indicate potential
future improvements. Worker empowerment, job fulfilment and
managerial commitment are not directly linked to process outcome, but
are often considered vital conditions for improvement in performance
(Deming, 1986). These more or less subjective aspects could, therefore,
be used as indicators for potential future improvements, even if it is
difficult to directly link them to the final result.
(2) The measure should in itself identify and generate continuous
improvements, instead of working as a passive control. This is
especially true for operational measures focusing on non-value added
activities, such as OEE.
(3) When measuring long-term rather than short-term performance, on a
continuous rather than a periodic basis, the performance measurement
system can work as an important component of a continuous
improvement program.

Lessons learned: the recommendations for companies

implementing OEE measures
The first thing that the CFT at company A noted was the vast array of methods
and principles available for the calculation of OEE. However, the basic premise
agreed at company A was that OEE must be calculated with the components of Cross-functional
quality, availability and productivity multiplied out to provide a percentage team working
figure. That is to also say, whether you choose Nakajima (1988) or De Groote for OEE
(1995) as Table I shows, is not the main issue. The reality in practice is that a
method which suits the organisation is adopted and maintained. This view was
held by the case study company A because the precision and validity of
calculation was perceived to be less important than the improvement shown 235
using a consistent method.
In addition to this, the cross-functional team had to address the issue of who
would carry out the improvements necessary to raise OEE performance levels.
This in reality was not a major issue as members of the management team
where also members of that team and, therefore, decisions could be made
quickly. The use of fact-based decision making created a belief in two benefits
of proposed action and resistance to change was very limited. Likewise, the
willingness to be part of the change process was partly perceived possible
because many people and functions were involved in the planning process and
thus communication to others outside the team was effective, even though it
was informal. It was apparent that improvement became a challenge to the
team and that OEE was certainly seen as an improvement driver for
cross-functional activities.
As might be expected, employees where very willing to get involved, partly
because it helped with job enrichment and job expansion, but also the OEE
measures became important for them and the organisation. As Ishikawa (1982)
outlined, the three aspects of future improvement were satisfied, namely as
shown in Table III.
Finally, the method of using CFT of company A had a clear alignment with
the seven FASI of high performance teams. Much has been discussed
previously in this paper regarding FASI numbers 1-4:
. Organisational impact (improvement in manufacturing performance).
. Defined focus (OEE).
. Alignment and interaction with external entities (involvement of
cross-functions including all departments).
. Measures of performance (OEE = (P, Q, A) and six big losses).

Improvement aspects (Ishikawa, 1982) Relevance to OEE and cross-functional teams

Measures should cover those aspects that
indicate potential future improvement
The measure itself should identify and
generate continuous improvement
Can work as a long-term continuous
improvement program
Productivity, quality and availability relate
directly to the six big losses
Cross-functional input into data collection and
data analysis identifies and generates
Table III.
opportunities for improvement
Improvement aspects
The never-ending drive toward world-class and their relation to
performance levels of OEE OEE and CFT
JQME Nevertheless, the last three FASI (i.e. knowledge and skills, need of the
9,3 individual, and group culture) are considered of equal importance:
. The knowledge and skills of a team of cross-functional workers had
never before been tested at company A and this was certainly a
challenge. To get over the initial stages within team development,
training and seminars were given to help the understanding of TPM and
236 OEE issues, and once a common knowledge of the basic elements of
these were obtained the teamwork had a focus. Incidentally, the team
considered itself expert in improvement of OEE once the knowledge was
gained, because the engineering logistics and process skills were
inherent within members.
. The need of the individual was partially addressed with the involvement
in a fully supported improvement project. Additionally, the team
members themselves were able to facilitate the individual needs of
members as and when they arrived. Consequently, although not all
individual needs were addressed, it was recognised that this was a very
important factor that required consideration by all of the team.
. The group culture was noted as constantly changing and in particular
the friction present in early team sessions lessened considerably once a
common understating of the concept of OEE had been achieved. This led
to the development of a shared purpose that was to measure, analyse
and improve OEE in company A. Importantly, the CFT realised that
team meetings made the greatest progress when there was a designed
focus for that meeting.

Conclusions
Successful manufacturing improvement and control can only happen if an
appropriate production measurement system is used. OEE is considered within
this paper as an appropriate measure for manufacturing organisations as it
aims to identify the six big losses associated with the disturbances, inherent or
unexpected, present within the system of manufacture. These six big losses
affect, to varying degrees, the three factors of productivity rate (P), quality rate
(Q) and availability percentage (A).
This paper has shown that the product of these three factors (P  Q  A)
provides the calculation for the OEE that can be used at machine, process line
or factory levels and is therefore an operational measure but is not considered
as a strategic measure for manufacturing organisations. Nevertheless, the
usefulness of OEE is not in doubt as this measure can be used to control, but
more importantly, improve the performance of operations because of its focus
on identifying and measuring the effect of the six big losses within the system
of manufacture. It is discussed that OEE can therefore be used with an
internally focused benchmark where an organisation sets improvement
objectives, or it can be used with an external target that has been set by the
father of TPM (Nakajima, 1988) as an OEE figure of 85 per cent.
 This paper has discussed that to effectively address all the six big losses and Cross-functional
hence improve OEE, CFT is necessary. CFT accordingly has the combined team working
necessary skills and knowledge of the entire system of manufacture to identify for OEE
correctly the practices and activities that relate to the six big losses. Thus
effective improvement plans can be developed that ensure the best utilization of
operational and other resources aimed at improving the manufacturing
performance. Additionally, through the use of CFT, it is more likely that the 237
responsibility and authority to carry out improvements is gained from
management. Hence, OEE as an operational measure for manufacturing
organisations should be implemented and data gathered, analysed and
calculated by CFT that aim to control and effectively improve manufacturing
system performance.

References
Bryman, A. (1989), Research Methods and Organization Studies, Routledge, London.
Caplice, C. and Sheffi, Y. (1995), ``A review and evaluation of logistics performance measurement
systems'', International Journal of Logistics Management, Vol. 6 No. 1, pp. 61-74.
Castka, P., Bamber, C., Sharp, J. and Belohoubek, P. (2001), ``Factors affecting successful
implementation of high performance teams'', Team Performance Management: An
International Journal, Vol. 7 No. 7, pp. 123-34.
Clifford, G. and Sohal, A. (1998), ``Developing self-directed work teams'', Management Decision,
Vol. 36 No. 2, pp. 77-84.
Dal, B., Tugwell, P. and Greatbanks, R. (2000), ``Overall equipment effectiveness as a measure of
operational improvement: a practical analysis'', International Journal of Operations &
Production Management, Vol. 20 No. 12, pp. 1488-502.
De Groote, P. (1995), ``Maintenance performance analysis: a practical approach'', Journal of
Quality in Maintenance Engineering, Vol. 1 No. 2, pp. 4-24.
Deming, W.E. (1986), Out of the Crisis, MIT Press, Cambridge, MA.
De Poy, E. and Gitlin, L. (1998), Introduction to Research. Understanding and Applying Multiple
Strategies, Mosby, Carlsbad, CA.
Dixon, J., Nanni, A.J. and Vollmann, T.E. (1990), The New Performance Challenge: Measuring
Operations for World-class Competition, Irwin, Homewood, IL.
Ericsson, J. (1997), Disruption Analysis ± An Important Tool in Lean Production, Department of
Production and Materials Engineering, Lund University, Lund.
Firlej, M. and Hellens, D. (1991), Knowledge Elicitation: A Practical Handbook, Prentice-Hall,
Englewood Cliffs, NJ.
Ghalayini, A.M. and Noble, J.S. (1996), ``The changing basis of performance measurement'',
International Journal of Operations & Production Management, Vol. 16 No. 8, pp. 63-80.
Irani, Z.N., Sharp, J.M. and Kagioglou, M. (1997), ``Striving for TQM through self directed work
teams'', Proceedings of 2nd International Conference on TQM and ISO 9000, University of
Luton, 2-4 April.
Ishikawa, K. (1982), Guide to Quality Control, Asian Productivity Organization, Tokyo.
Jeong, K. and Phillips, D. (2001), ``Operational efficiency and effectiveness measurement'',
International Journal of Operations & Production Management, Vol. 21 No. 11, pp. 1404-16.
Jones, C. (1994), ``Improving your key business processes'', The TQM Magazine, Vol. 6 No. 2,
pp. 25-9.
JQME Kaplan, R.S. and Norton, D.P. (1992), ``The balanced scorecard ± measures that drive
performance'', Harvard Business Review, Vol. 70 No. 1, pp. 71-9.
9,3 Keegan, D.P., Eilar, R.G. and Jones, C.R. (1989), ``Are your performance measures obsolete?'',
Management Accounting, Vol. 71, June, pp. 45-50.
Maskell, B.H. (1991), Performance Measurement for World Class Manufacturing: A Model for
American Companies, Productivity Press, Cambridge, MA.
238 Miles, M. and Huberman, M. (1984), Qualitative Data Analysis, Sage, Newbury Park, CA.
Nakajima, S. (1988), An Introduction to TPM, Productivity Press, Cambridge, MA.
Nakajima, S. (1989), TPM Development Program, Productivity Press, Cambridge, MA.
Schmenner, R.W. and Vollmann, T.E. (1994), ``Performance measures: gaps, false alarms and the
`usual suspects''', International Journal of Operations & Production Management, Vol. 14
No. 12, pp. 58-69.
Tajiri, M. and Gotoh, F. (1992), TPM Implementation: A Japanese Approach, McGraw-Hill, New
York, NY.
Tuckman, B. and Jenson, M.A. (1977), ``Stages of small group developed revised'', Group and
Organisational Studies, pp. 419-27.
Voss, C., Tsikriktsis, N. and Frohlich, M. (2002), ``Case research in operations management'',
International Journal of Operations & Production Management, Vol. 22 No. 2, pp. 195-219.
Wellins, R.S., Byham, W.C. and Wilson, J.M. (1991), Empowered Teams, Jossey-Bass,
San Francisco, CA.
White, G.P. (1996), ``A survey and taxonomy of strategy-related performance measures for
manufacturing'', International Journal of Operations & Production Management, Vol. 16
No. 3, pp. 42-61.
Yin, R. (1989), Case Study Research. Design and Methods, Sage Publications, London.

Further reading
Kotze, D. (1993), ``Consistency, accuracy lead to maximum OEE benefits'', TPM Newsletter, Vol. 4
No. 2.
Raouf, A. (1994), ``Improving capital productivity through maintenance'', International Journal of
Operations & Production Management, Vol. 14 No. 7, pp. 44-52.
Shirose, K. (1994), TPM for Workshop Leaders, Productivity Press, Cambridge, MA.