A Service Management Metric with Origin in Plant Management

The discipline of industrial engineering (IE) was originated in the US by Frederick W. Taylor, who first applied what he termed scientific management to machine shop management in the 1880s. IE expanded world-wide with applications of work measurement to all manner of manufacturing, then to services. A century later, as the Japanese practice of Total Productive Maintenance (TPM) became known in the US, the associated equipment management metric Overall Equipment Effectiveness (OEE) became well-known as a production metric that could be applied to individual manufacturing machines, production lines, and the overall production system. In this chapter, illustrations of the calculation of OEE are provided, along with modification of the three OEE inputs (availability, performance efficiency, and quality rate) to create a new service management metric Overall Service Effectiveness (OSE). Definitions and measures of service quality are reviewed. The first published application of OSE was to a city public transportation system, and is reviewed as a prototype. Essentially, applications of OSE require the industrial engineer to define service-specific measures of availability, processing rate, and quality at the management’s level of interest: work station, process, or system. The data collected to calculate OSE will also point toward actions that would improve OSE.