How Effectively Are You Using Your Resources? (0 > 1: Poor → Perfect)
- Hieu Do
- 3 days ago
- 5 min read
As a CEO, you constantly ask:
Are my teams and resources performing at their best?
How do we stack up against our past performance, competitors, and industry standards?
In manufacturing, Overall Equipment Effectiveness (OEE) is a trusted metric to answer these questions. But OEE is not just for factories—it can also be adapted to service sectors to give you a clear, actionable measure of how effectively your resources are utilized.
Why OEE Matters for CEOs Beyond Manufacturing
OEE measures the percentage of time that equipment is truly productive by combining three factors:
OEE = AxPxQ (all values 0 ->1)
A = Perfect Availability (how much time equipment is running)
P = Perfect Performance (how fast it runs compared to its ideal speed)
Q = Perfect Quality (how much output meets quality standards).
Availability= (Run Time/Planned Production Time)
Where Run Time = Planned Production Time − Stop Time (downtime due to breakdowns, changeovers, or other interruptions).
Performance=(Ideal Cycle Time×Total Count)/Run Time
Ideal Cycle Time is the shortest possible time to complete one unit of work under perfect conditions.
Quality=Good Count/Total Count
Multiplying these three gives you the OEE score, a number between 0 and 1 (or 0% to 100%), representing the overall effectiveness of your resources.
While traditionally used in factories, the concept of OEE is increasingly relevant for service sectors and knowledge work—where your “equipment” is your people, processes, and systems.
For CEOs in Vietnam’s dynamic business environment, where competition is fierce and margins can be tight, understanding and improving resource effectiveness is critical. OEE offers a straightforward, objective way to know your problem sources, keep track your performance and benchmark your team’s performance over time, compare it with competitors, align your operations with industry best practices.
Example:
Imagine a customer support team in a Vietnamese call center:
Planned working time per day: 8 hours (480 minutes)
Breaks and meetings (Stop Time): 60 minutes
Run Time: 480 − 60 = 420 minutes
Number of calls ideally handled per minute (Ideal Cycle Time): 1 call per 5 minutes
Total calls handled: 80 calls
Calls resolved without follow-up (Good Count): 72 calls
Calculations:
Availability = 420 / 480 = 0.875 (87.5%)
Performance = (5 minutes × 80 calls) / 420 minutes = 400 / 420 ≈ 0.952 (95.2%)
Quality = 72 / 80 = 0.9 (90%)
OEE = 0.875 × 0.952 × 0.9 ≈ 0.75 or 75%
This means the team is operating at 75% effectiveness compared to an ideal scenario with no downtime, maximum speed, and perfect quality.
Source: SleekFlow
What Lean Can Do for Your Business
Lean management is a proven methodology that helps organizations eliminate waste, streamline workflows, and continuously improve. It’s not a complex tool but about creating real value by making your operations more efficient and responsive.
For CEOs who’ve heard of Lean but aren’t experts, here’s what Lean can bring to your business:
Increased Efficiency and Productivity: Lean helps you identify and cut out non-value-added activities, so your teams can focus on what truly matters. This leads to faster turnaround times and better use of resources.
Improved Customer Satisfaction: By aligning processes with customer needs and continuously improving, Lean helps you deliver higher quality products and services consistently, boosting loyalty and reputation.
Empowered Employees: Lean fosters a culture where employees at all levels are engaged in problem-solving and continuous improvement, which increases motivation and reduces turnover.
Sustainable Competitive Advantage: Lean is not a one-time fix but a long-term strategy that embeds continuous improvement into your company culture, helping you stay ahead in a fast-changing market.
How Lean and OEE Work Together
By measuring OEE, you get a clear, quantifiable picture of how well your resources perform. Lean then provides the tools and mindset to improve those numbers systematically.
For example, if your OEE shows low availability due to frequent unplanned downtime, Lean’s problem-solving approach can help identify root causes and implement solutions to reduce disruptions.
In service sectors, OEE can be adapted to measure team productivity, process flow, and quality of output, offering CEOs a powerful metric to manage and improve operational performance.
Key Differences When Implementing OEE in Service vs. Manufacturing
While OEE originated in manufacturing, applying it to services requires understanding important differences:
Aspect | Manufacturing | Service Sector |
Human Factors & Variability | Machines run consistently with minimal variation | Employees need breaks, vary in skills, affected by motivation and fatigue; higher variability |
Output Nature | Tangible products, easy to measure quality | Intangible, customized outputs; quality harder to define and measure |
Process Variation | Relatively stable cycle times and processes | High variation in cycle times and outcomes; ideal cycle time needs frequent review |
Data Collection | Automated, sensor-based, real-time data | Often manual or subjective data collection; more challenging to capture accurate metrics |
What to Notice When Applying OEE in Your Business
Set realistic Planned Production Time that includes necessary breaks and meetings.
Define clear quality criteria relevant to your service (e.g., first-call resolution rate, customer satisfaction).
Use OEE as a comparative tool over time, across teams, or against industry benchmarks rather than expecting perfect scores.
Engage your employees in understanding OEE to ensure accurate data and foster a culture of continuous improvement.
Recognize that OEE in services is a guide to identify improvement areas, not a strict manufacturing-style metric.
Why CEOs in Vietnam Should Care
Vietnam’s economy is growing rapidly, with increasing demands for quality and efficiency from both domestic and international customers. Many businesses still operate with inefficiencies that limit growth and profitability. Implementing Lean and using OEE as a performance metric can help Vietnamese companies:
Identify hidden inefficiencies and bottlenecks
Compete better on quality and delivery speed
Reduce costs and improve margins
Build a Kaizen culture of continuous improvement that attracts and retains talent
Benchmark your operations against competitors and past performance
Make data-driven decisions that improve customer satisfaction and profitability
Take Action with SOSP Consulting Group
At SOSP Consulting Group, we bring practical Lean Six Sigma expertise tailored for Scaleups & SMEs in service sectors. We help CEOs like you understand and implement OEE in your service or manufacturing operations, providing:
Customized in-house training that demystifies Lean and OEE without jargon
Hands-on consulting to measure, analyze, and improve your operational effectiveness
Strategies to embed continuous improvement into your company culture
Book a consultation with SOSP Consulting Group today and discover how Lean and OEE can unlock your business’s potential in a real, measurable way.
OEE is more than a number—it’s a window into how well your resources perform and where you can improve. Adapted thoughtfully for service sectors, it offers CEOs a powerful tool to drive sustainable growth in Vietnam’s competitive market.
Don’t let inefficiencies hold you back.
Start measuring, start improving, and lead your company to operational excellence.
Stay connected!
Get 200+ free tools & SOP templates — straight to your inbox.
------
𝐸𝑚𝑝𝑜𝑤𝑒𝑟𝑖𝑛𝑔 𝑉𝑖𝑒𝑡𝑛𝑎𝑚-𝑏𝑎𝑠𝑒𝑑 𝐹𝐷𝐼 𝑆𝑡𝑎𝑟𝑡𝑢𝑝𝑠, 𝑆𝑀𝐸𝑠 𝑡ℎ𝑟𝑜𝑢𝑔ℎ 𝑒𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑛𝑑 𝑠𝑡𝑟𝑎𝑡𝑒𝑔𝑖𝑐 𝑐𝑜𝑛𝑛𝑒𝑐𝑡𝑖𝑜𝑛𝑠
CONTACT SOSP Consulting Group
🏢 Rep Office: 17th floor, Vincom Center Buildings, 72 Le Thanh Ton Street, Ben Nghe Ward, District 1, HCMC, VN
🏢 Headquarter: 3th floor, 126 Nguyen Thi Minh Khai street, Ward 6, District 3, HCMC, VN
Commentaires