Application of Overall Labor Effectiveness (OLE) and Root Cause Analysis for Workforce Performance Improvement

Authors

  • Benyamin Sojdeh ei * Department of Industrial Engineering, Karaj Branch, Islamic Azad University, Karaj, Iran.

https://doi.org/10.48314/apem.v3i2.73

Abstract

This study evaluates workforce performance using the Overall Labor Effectiveness (OLE) index in the cleaning workshop of an investment casting factory over a one-year period. OLE was calculated monthly across availability, performance, and quality components and compared against global benchmarks. The annual average OLE of 81.44% fell below the benchmark of 85%, with Quality identified as the primary limiting factor. Root Cause Analysis (RCA) using the 5 Whys technique revealed two systemic issues: a misaligned incentive system that prioritized production volume over quality, and inadequate production planning leading to end-of-period overworking. Redesigning the incentive system and adopting risk-based production planning are proposed as primary improvement interventions.

Keywords:

Overall labor effectiveness, Operator performance, Root cause analysis, 5 whys, Performance improvement, Investment casting

References

  1. [1] Natsir, I., Ode, H., Irfana, T. B., Pulungan, D. R., & Sihite, M. (2024). An analysis of the role of human resource management in enhancing organizational efficiency and effectiveness. International Journal of Economics (IJEC), 3(2), 1089–1097. https://doi.org/10.55299/ijec.v3i2.1097
  2. [2] Neumann, W. P., Winkelhaus, S., Grosse, E. H., & Glock, C. H. (2021). Industry 4.0 and the human factor--a systems framework and analysis methodology for successful development. International Journal of Production Economics, 233, 107992. https://doi.org/10.1016/j.ijpe.2020.107992
  3. [3] Taylor, F. W. (1911). The principles of scientific management. NuVision Publications, LLC. https://strategy.sjsu.edu/www.stable/pdf/Taylor,%20F.%20W.%20(1911).%20New%20York,%20Harper%20&%20Brothers.pdf
  4. [4] Parmenter, D. (2010). Key performance indicators (KPI): Developing, implementing, and using winning KPIs. John Wiley & Sons. https://kpiacademy.uk/wp-content/uploads/2022/04/Key-Performance-Indicators-KPI-Developing-Implementing-and-Using-Winning-KPIs-David-Parmenter-z-lib.org_.pdf
  5. [5] Nakajima, S. (1988). Introduction to TPM: Total productive maintenance. Productivity Press, Inc. https://openlibrary.org/books/OL2064937M/Introduction_to_TPM
  6. [6] Bowen, D. E., & Lawler III, E. E. (1992). Total quality-oriented human resources management. Organizational Dynamics, 20(4), 29–41. https://doi.org/10.1016/0090-2616(92)90073-V
  7. [7] Deepak, V., Bhaskar, S., & Balaji, M. (2021). Enhancing overall labour effectiveness of CSD warehouse by adopting lean tools in construction equipment manufacturing process. Industrial Engineering Journal, 14(1), 40–48. https://iejournal.in/assets/pdf/1) IEJ Jan 2021-40-48.pdf
  8. [8] Braglia, M., Castellano, D., Frosolini, M., Gallo, M., & Marrazzini, L. (2021). Revised overall labour effectiveness. International Journal of Productivity and Performance Management, 70(6), 1317–1335. https://doi.org/10.1108/IJPPM-08-2019-0368
  9. [9] Brabec, Z., & Jáčová, H. (2022). Overall labor effectiveness as a tool for measuring performance in a given company. ACC Journal, 28(2), 7–18. https://doi.org/10.15240/tul/004/2022-2-001
  10. [10] Maharani, A. T. P., Sugarindra, M., & Antyolin, A. V. (2024). Overall labor effectiveness (OLE) method for analyzing employee performance in the musical instrument industry. Journal of Industrial Engineering and Halal Industries, 5(2), 32–40. https://doi.org/10.14421/jiehis.4968
  11. [11] Nurprihatin, F., Ayu, Y. N., Rembulan, G. D., Andry, J. F., & Lestari, T. E. (2023). Minimizing product defects based on labor performance using linear regression and six sigma approach. Management and Production Engineering Review, 88–98. https://doi.org/10.24425/mper.2023.146026

Downloads

Published

2026-07-27

Issue

Vol. 3 No. 2 (2026): Annals of Process Engineering and Management

Section

Articles

License

Copyright (c) 2026 Annals of Process Engineering and Management

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Sojdeh ei, B. (2026). Application of Overall Labor Effectiveness (OLE) and Root Cause Analysis for Workforce Performance Improvement. Annals of Process Engineering and Management, 3(2), 77-85. https://doi.org/10.48314/apem.v3i2.73

Similar Articles

21-30 of 41

You may also start an advanced similarity search for this article.