TEEP (Total Effective Equipment Performance) is a performance metric that provides insights as to the true capacity of your manufacturing operation. It takes account both Equipment Losses (as measured by OEE) and Schedule Losses (as measured by Utilization).
Let’s briefly contrast OEE and TEEP:
If your TEEP score is 100% then you are making only Good Parts, as fast as possible, with no stops, around the clock (24/7). In other words, you have no Schedule Losses and no OEE Losses.
|Plan Not Open
|TEEP takes into account Schedule Losses.
|Production Not Scheduled
|Setup and Adjustments
|Six Big Losses
|OEE takes into account the Six Big Losses, which map to OEE Losses as follows:
|Fully Productive Time
|OEE and TEEP
OEE is the ratio of Fully Productive Time to Planned Production Time. It takes into account the Six Big Losses.
TEEP is the ratio of Fully Productive Time to All Time. It takes into account Schedule Losses and Six Big Losses.
OEE is improving. Great job! Or is it? Dig a little deeper and the picture is less clear. Most companies would not want to increase Availability by 5.0% at the expense of decreasing Quality by 4.5%.
Now let’s work through a complete example using the preferred OEE calculation. Here is data recorded for the first shift:
|8 hours (480 minutes)
|(2) 15 minute and (1) 30 minute
|Ideal Cycle Time
TEEP is calculated as:
Utilization is calculated as:
Here is a simple example, based on a manufacturing operation with a 65% OEE score, that is running two 8-hour shifts per day, five days per week.
|How to calculate OEE
|Planned Production Time
|8 hours × 2 shifts × 5 days
|24 hours × 7 days
|80 hours / 168 hours
|0.6500 × 0.4762
TEEP indicates how much capacity is waiting to be unlocked in your “hidden factory”. In other words, it shows how much potential you have to increase throughput with your current equipment. In many cases, reclaiming time from your hidden factory is a faster and less expensive alternative to purchasing new equipment.
TEEP can also be used to get a sense of your potential sales capacity as it takes into account the full capacity of your manufacturing plant. Keep in mind though, that even a world-class manufacturing plant operating around the clock typically achieves only 80% to 90% Utilization of total capacity.
Capacity can be defined as “the amount that can be produced”. From a discrete manufacturing perspective, we can define capacity as “the maximum number of parts that can be manufactured”. Capacity is fundamentally a part-based metric (e.g., our current capacity is 24,000 red widgets per hour).
Utilization can be defined as “how much something is used”. From a discrete manufacturing perspective, we can define utilization as “the proportion of time that manufacturing equipment is used”. Utilization is fundamentally a percentage-based metric (e.g., our current utilization is 47.62%).
As stated above, TEEP takes into account both Schedule Losses and OEE Losses. Interestingly, losses can be viewed from three perspectives:
All three perspectives can be useful – depending on whether you are thinking in terms of sales/capacity (part units), labor/utilization (time units), or manufacturing performance (percentage units).
Measuring TEEP reveals these losses in full so that you can begin to understand and utilize the entire capacity of your plant.
To learn more about manufacturing losses, visit the Six Big Losses.
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