OLE: Workforce Efficiency Indicator
Labor Force Efficiency Indicator
OLE (Overall Labor Effectiveness) is a powerful KPI designed to monitor and measure labor efficiency and performance in production environments.
By using this indicator, companies can evaluate how effectively a production line operates, identifying losses caused by downtime, slow cycles, or defects. A score approaching 100% reflects a highly efficient line.
The OLE KPI relies on three main components:
- Availability This accounts for the presence or absence of the workforce, including both justified and unjustified absences, along with other potential issues. Operator readiness also affects availability, as certain equipment requires certified personnel for proper operation.
- Performance This measures the actual time an operator spends producing and delivering a product, with initial machine setup playing a crucial role.
- Quality This reflects the percentage of output that meets the company’s quality standards.
Through this KPI, decision-makers gain insights into how labor impacts production performance and acquire tools to prevent inefficiencies that could hinder manufacturing productivity.
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Rapid identification of improvement areas
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better decision-making
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Increasing the performance of the workforce
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Rationalisation of human resource management costs
Just like the OEE indicator, the Overall Labor Effectiveness KPI is based on three core components: availability, performance, and quality of the workforce. But how are these values actually determined?
OLE = Availability × Performance × Quality
To effectively capture these three components, it is essential to adopt an MTM based software for labor time tracking. Only a structured and reliable system can ensure the acquisition of precise and consistent data.
By integrating the materialSUITE® MTM software on mobile devices within the production plant, operators can accurately record the start, any interruptions (e.g., due to downtime), and the completion of each task.
As a result, this data stream allows the company to automatically calculate the Overall Labor Effectiveness KPI, providing an accurate measurement of actual production costs while objectively identifying inefficiencies within the processes. This enables targeted interventions to optimize overall operational performance.
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Quantify and predict workforce performance
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Identifying the causes of production inefficiency
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Timeliness in taking corrective action
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Identify opportunities from the production system
What advantages do I get from the OLE analysis?
The OLE indicator is particularly important in that it shows the cause-effect relationship of labor force factors and shows how actions taken can have an impact on improving a given production area. It is important to note that this KPI highlights that internal staff training can improve company productivity.
