OVERALL TEAM EFFECTIVENESS

In Lean Manufacturing, the Overall Equipment Effectiveness (OEE) is the usual standard parameter to measure a process. Simply put, it identifies the percentage of manufacturing time that is truly productive. The rational for the indicator is a set of three different parameters: availability, performance and quality.?

Availability takes into account the total time available for production minus the planned and unplanned stops. For instance, if someone is trying to measure the availability of an equipment that can be used for 12 hours per day during 5 days per week, we have a total of 60 hours available for production. However, if you have a planned setup that lasts 2 hours per week. Also, at the end of the week you noticed that you had to stop for 3 hours the referred equipment for fixing un unexpected malfunctioning. Thus, the total available time for the equipment is only 55 hours. In this case, the?availability score?is 55/60 = 91%.

Performance is the parameter that measures the amount of real production related to planned in the same timeframe used to measure availability. If at the end of the week it was planned a production of 100 parts and actually only 75 were produced, due to any reason, the?performance score?is 75/100 = 75%.

Quality?considers the relation between the perfect parts and the ones with any defect or any rework necessary to have perfect parts. If from the cited 75 parts produced only 50 are considered perfect to move to another process or to be released to the market, the?quality score?is 50/75 = 67%.

The OEE is calculated by multiplying the three scores. In this case 91 x 75 x 67 = 45%, which represents less than 50% of the perfect desired state. An OEE of 100% means that we are producing always perfect parts, with no stop time, and in our maximum speed. It is clear that an OEE of 100% is utopic, but OEE is an excellent indicator to help as make decisions on which element of the process we can take actions to increase our production. In manufacturing context an OEE of 85% is considered an excellent number.?

Where?A?is the availability score,?P?is the performance score, and?Q?is the quality score.

Now let’s bring OEE for the context of a project or even an administrative process. In this article I am proposing another indicator called Overall Team Effectiveness (OTE). The same scores will be uses as in OEE, but with some minor adaptations. Let’s consider a fictitious project where you are interested in measure your team effectiveness per week, but it can be per month or any other timeframe deemed appropriate.

In this project your team can work 8 hour per day, 5 days a week and your team is composed by 10 people. Therefore, you have a maximum of 40 x 10 = 400 hours of available to produce work packages, user stories, use cases, documents or any other item you consider useful for your context. However, you have a daily (15 minutes) meeting and also a review meeting, a retrospective meeting, break times, unplanned meetings to discuss problems, and so forth. Considering all these planned and non-planned stops, and assuming that all your team has the same time of availability to work, we can come, for example, to a total available time per week of approximately 30 x 10 = 300 hours of effective work time. In this case your?availability score?is 300/400 = 75%.

Let’s suppose now that the number of the cited work is measured by story points, and in this case could be 200. But, as said before, it could be any other metric. At the end of the week your team has affectively produced 180 story points. Thus,?your performance?score is 180/200 = 90%, which is great, but not perfect.

Regarding the quality score, we are going to test everything that was perfectly produced at the end of the week and, therefore, needing no rework and can effectively be transferred to another phase of the project or delivered to your client. Let’s suppose that from the 180 story point produced, 150 were considered perfect. Therefore, your?quality score?is 150/180 = 83%.

Finally, you can calculate your OTE, that is 75 x 90 x 83 = 56%. We can clearly observe that your team is slightly over the average effectiveness of 50%, which is not ideal and, therefore, something must be changed to improve this number.?

Where?A?is the availability score,?P?is the performance score, and?Q?is the quality score.

The same reasoning can be used for an administrative process, since you are able to define a metric for the work that must be done. For example, let’s suppose you are working in a procurement department, your metric could be the number of processes concluded in a month. Another example is for your human resources, where you can measure the effectiveness of the recruitment process. Also, in a healthcare institution, the OTE could be used to measure the effectiveness of patients care.?

As a conclusion, OTE is a simple, effective and useful indictor that can be used for everyone, regardless your business type or size. Also, it provides you with a lot of information on where you can act or adapt you process to increase your production.