Overall cost efficiency

Abstract

Considering the present state of the art among the production optimization frameworks, the Overall Equipment Efficiency methodology is the most popular one. However, this methodology approaches production optimization only from the technology point of view and ignore the economic perspective of optimization. This is why we developed a new key performance indicator Overall Cost Efficiency aimed at measuring the cost efficiency of a production process in real time. Its application is based on the Overall Equipment Efficiency measurements and is convenient for application in industrial management praxis. We have used an ordinary mathematical modeling approach combined with descriptive microeconomic analysis techniques.