Equipment cost efficiency: A comprehensive metric for evaluating operational and financial performance in manufacturing

This paper introduces the concept of Equipment Cost Efficiency (ECE) as a comprehensive metric for evaluating the operational and financial performance of manufacturing equipment. In contrast to the traditional approach of assessing equipment using Overall Equipment Effectiveness (OEE), the ECE considers the costs associated with non-productive added activities, providing a robust benchmark for comparison and facilitating targeted improvement initiatives. A practical case study illustrates the real-world application of the ECE in assessing equipment criticality and strategically planning improvement actions, highlighting its effectiveness in optimizing both operational performance and financial outcomes. By adopting the ECE, practitioners can significantly enhance operational efficiency and realize tangible financial benefits, thereby making it a valuable metric for identifying areas in need of improvement and maximizing the return on investment for manufacturing equipment. (c) 2023 Society of Manufacturing Engineers (SME). Published by Elsevier Ltd. All rights reserved.