In the current global competitive environment it is of immense importance for manufacturing companies tokeep track of, and improve the production performance of their production systems. One of the most widelyused performance measures is OEE, a powerful tool for production development if used correctly. Based ona theoretical analysis and a case study within a manufacturing company in the automotive industrychallenges associated with the implementation of OEE are identified and analyzed. Furthermore, the paperpresents conclusions of how to utilize the OEE measure for efficient management of improvement inproduction performance.