Waste Reduction through Overall Equipment Effectiveness a Lean Manufacturing Principle in Small Scale Industry: A Review

Small scale sector play a vital role in Indian economy, and contributes more than 50% of industrial production in value addition term. Small scale sectors generates one third of export revenue and employs largest manpower next to agriculture. In India, the survival and growth of small-scale industries are quite competitive and largely depends upon its ability to innovate, improve operational efficiency and enhance productivity. Indian industries have been trying to adopt new business initiative in order to stay competitive in the fierce market place. Lean manufacturing is one of these initiative that focus on the cost reduction by eliminating non-value added activities (Muda or waste). Overall Equipment Effectiveness (OEE) is one of the Lean manufacturing principle that helps an organization to identify the non-value adding elements in the targeted process and brings a product or group of produces that uses the same resource through the main flow, from raw material to the arms of customers. OEE is already selected as best lean manufacturing principle for case company using Analytic Hierarchy Process (AHP). This paper discussed the method of OEE and its benefits to different industries. This paper also presents a Literature review to summarize the various applications of this principle and improvement achieved by various industries. The paper concludes with highlighting OEE s important contribution to revealing and curtailing extravagances in the target process.