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The following table provides examples of the labor information tracked by overall labor effectiveness organized by its major categories. Using this labor information, manufacturers can make operational decisions to improve the cumulative effect of labor availability, performance, and quality. [2] [3]
Total effective equipment performance (TEEP) is a closely related measure which quantifies OEE against calendar hours rather than only against scheduled operating hours. A TEEP of 100% means that the operations have run with an OEE of 100% 24 hours a day and 365 days a year (100% loading). The term OEE was coined by Seiichi Nakajima. [2]
Operational Excellence (OE) is the systematic implementation of principles and tools designed to enhance organizational performance, and create a culture focused on continuous improvement. It is intended to enable employees to identify, deliver, and enhance the flow of value to customers.
Improving operational efficiency begins with measuring it. Since operational efficiency is about the output to input ratio, it must be measured on both the input and output side. Quite often, company management is measuring primarily on the input side, e.g., the unit production cost or the man hours required to produce one unit.
Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad concept, internal control involves everything that controls risks to an organization.
Business processes must include up-to-date and accurate reports to ensure effective action. [30] An example of this is the availability of purchase order status reports for supplier delivery follow-up as described in the section on effectiveness above. There are numerous examples of this in every possible business process.
Operations management textbooks usually cover demand forecasting, even though it is not strictly speaking an operations problem, because demand is related to some production systems variables. For example, a classic approach in dimensioning safety stocks requires calculating the standard deviation of forecast errors.
In military science, effectiveness is a criterion used to assess changes determined in the target system, in its behavior, capability, or assets, tied to the attainment of an end state, achievement of an objective, or creation of an effect, [9] while combat effectiveness is: "...the readiness of a military unit to engage in combat based on ...