Purpose – The purpose of this paper is to describe the overall equipment cost loss (OECL) methodology and an implementation of this methodology, to compare the outcomes of OECL with those of overall equipment effectiveness (OEE), and finally to identify the benefits offered by this new methodology. Design/methodology/approach – The proposed methodology, OECL, combines six large loss models and a financial model in the performance evaluation of equipment. The six large losses are converted into monetary units. OECL is a new way of evaluating equipment performance that differs from the original OEE methodology and overcomes some of the limitations of OEE. This new methodology can be used to rank problematic machines by accounting for production elements together with finance elements. Findings – The OECL and OEE methodologies rank problematic machines differently. Research limitations/implications – Efforts were made in this research to identify factors affecting OECL outcomes, but it was found that it was not possible to apply OECL to all scenarios. Practical implications – The OECL model can be implemented in a real manufacturing company to help decision-makers better determine the magnitudes of equipment problems and rank problematic pieces of equipment appropriately. Originality/value – This OECL method is able to overcome some of OEE’s weaknesses. It can properly prioritise problematic machines by considering both cost and losses.

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Abstract. This research has an objective to create the new indicator for evaluating the performance and efficiency of the machine. This indicator is built as purpose to solve the problems that occurred in Overall Equipment Effectiveness (OEE) indicator. OEE is the main indicator of TPM, which focuses on machine maintenance. This indicator emphasizes how to find loss in the machine with no consideration of production cost. As considering the priority between the machine without regarding the machine capacity, production cost and value of the products, it could cause the improper priority to the machine. Therefore, the researcher has built a new indicator and also implemented with fibre cement manufacturing company. In the case study that the machine had been implemented, the result represented that the machine which had the highest OEE at 76.7%, was not the machine that had the lowest production cost loss value. The machine's overall production loss value costs 25.01 million baht. The machine that has even the least production loss value costs 2.28 million baht has the OEE only 71.7%. This OEE is the lowest in all of machines. The data represents that the OEE cannot sequence the problems appropriately because of the differences of the machines, including production capacity, production cost and the value of the products. These all differences will directly affect to the production loss value of each machine. Consequently, the new indicator in this research has been built to solve these OEE problems. This indicator can sequence the problems of each machine by calculating the production loss and represents the results as the monetary unit.

This research has the objective of improving indicators for evaluating losses of equipment. It also proposes a newly developed computing methodology for estimating the quantitative losses in monetary unit. The presented methodology is to calculate losses following overall equipment effectiveness (OEE) consisting of opportunity and production cost losses and also from cost of quality (COQ) approaches. This method eliminates some of OEE's weaknesses and expands scope from overall equipment cost loss (OECL). The proposed calculating methodology is demonstrated by applying to a real manufacturer of equipment. This newly improved model can prioritise problematic equipment more appropriately than OEE and OECL.Keywords: performance measurement; overall equipment effectiveness; overall equipment cost loss; cost of quality; total preventive maintenance 1. Introduction Nowadays, business organisations are confronted with a complex and competitive environment. This circumstance forces manufacturers to improve their quality, price and also delivery time in order to have an advantage over their competitors. In these circumstances, increased competiveness and demand stimulate manufacturers to increase production capacity by replacing human labour with automatic machines. Machines have greater reliability, capacity, and also lower error and operating costs, than humans. Nevertheless the advantages only arise when the machines perform with higher effectiveness and efficiency. Therefore to attain higher prosperity a management system is required and one of the management systems commonly used is total preventive maintenance (TPM). TPM is adopted in order to strengthen the manufacturing business performance and to achieve world-class performance (McKone et al. 2001, Swanson 2001. However, a management system necessarily requires an appropriate information system to evaluate operating performance. The information gathered from operating machines is crucial for sustaining organisations. Management levels are able to make better decisions from these and also manage their production systems more effectively and efficiently. Appropriate measurement is necessarily established for these purposes (Nachiappan and Anantharam 2001). Ericsson (1997) indicated that accurate equipment performance information is essential to the success and long-term effectiveness of TPM activities. One of the important and widely used metrics of performance in manufacturing is overall equipment effectiveness (OEE), especially for firms applying TPM. OEE is a valuable tool that can help management to unleash hidden capacity and therefore reduce overtime expenditure and allow deferral of major capital investment (Muchiri and Pintelon 2006). Furthermore, it is not only as an operational measure, but also as an indicator of process improvement activities within a manufacturing environment (Dal et al. 2000). OEE is a simple indicator but still comprehensive. Moreover, it is an effective way of analysing the efficiency of a single machine and also an integrated machi...

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