Assessment of equipment financial performance in overall equipment effectiveness metric for gauging manufacturing equipment criticality

This paper introduces equipment cost effectiveness, a metric for evaluating the financial performance of equipment in manufacturing. While overall equipment effectiveness is widely used to assess operational performance, its limited focus on financial aspects necessitates a more comprehensive approach. Equipment cost effectiveness addresses this limitation by quantifying the wastage of equipment acquisition cost and maintenance cost at any overall equipment effectiveness level. Real-world data from the medical device, tyre flap, and semiconductor industries validate equipment cost effectiveness through correlation analysis, revealing a negative relationship between overall equipment effectiveness and both equipment acquisition cost and maintenance cost. Equipment cost effectiveness provides a holistic evaluation of equipment, enabling better decision-making and cost optimisation. By bridging the gap between operational and financial evaluations, equipment cost effectiveness offers valuable insights for enhancing equipment efficiency and resource allocation in manufacturing operations. [Submitted: 22 April 2023; Accepted: 10 November 2023]