What is OEE & TEEP?

In the world of manufacturing, measuring and improving equipment performance is critical for achieving operational excellence. To get a big picture as to where to focus on in your plant, you have to be able to see the whole plant as a large system. No matter your role, your job is to improve the plant processes, helping to produce the highest quality product, at the lowest price possible, in the safest manner as one is able.

Two key metrics that serve this purpose are Overall Equipment Effectiveness (OEE) and Total Effective Equipment Performance (TEEP). While both provide valuable insights into equipment performance and capacity utilization, they differ in focus and application. Understanding these metrics is essential for identifying improvement opportunities and maximizing the potential of manufacturing assets.

What are the 7 “Big” Losses?

Most of the losses that are affecting your ability to produce are the OEE-related losses, so these losses are where to focus first. The 7 Big Losses are the loss buckets that make up the biggest losses within a facility. These are equipment related losses that impede equipment performance (i.e., OEE Losses):

• Setup and Adjustments are losses that come after a changeover, PM, breakdown, or minor stop task has been “completed”. It is having to go back afterwards and stop a machine to tweak on it or taking longer to complete a changeover against the set standard. This is normally caused by a lack of standard work, poor practices, and poor discipline causing quality defects. It is time the machine is down.
• Breakdowns are losses normally 10 minutes or more and require a part for the machine to function again. These are normally caused by tweaking, poor maintenance practices, lack of maintenance strategy, poor planning, poor execution, and a lack of understanding.
• Process Failures are losses that are 10 mins or more and do not require a part for the machine or line to function again. These are normally caused by failures due to the process or lack thereof. An example would be a wrongfully located e-stop that gets hit accidentally and takes more than 10 minutes to recover from.
• Minor Stops are losses that are 10 minutes or less regardless of the need for a part. These are normally caused by design-related issues, lack of standard work, lack of operator PMs (CILs), bad incoming materials like boxes or cases, lack of incoming quality standards, etc.
• Speed Losses are losses due to underutilizing machines at design rate. It is the original design rated speed minus the current running speed. For example, the machine was designed to run 100 packages per minute. The current speed the machine is set at is 80 packages per minute due to some cause in the system. 
• In Process Rejects are rejects caused while in process or during production. This type of rejection could be caused by many different issues, but some of the most common would be under/overweight, bad packaging, bad seals, out of specification, etc. 
• Startup Rejects are caused at the startup of a line after a shutdown or changeover. Just like above, there could be many causes, but some of the most common would-be rejections due to a machine warming up, under/overweight, bad seals, etc.

What is Overall Equipment Effectiveness (OEE)?

OEE is a comprehensive metric used to evaluate how effectively equipment is utilized when it is scheduled to run. It is calculated as the product of three factors: Availability, Performance, and Quality. Each of these factors represents a distinct aspect of equipment utilization:

Availability: This measures the proportion of scheduled time that equipment is actually operational. It accounts for downtime due to breakdowns, process failures, or setup and adjustment losses. Formula:

Availability = Scheduled time minus breakdowns, process failures, and setup & adjustment downtime / Scheduled time

Performance: This reflects whether equipment is operating at its designed speed during production. Formula:

Performance = Actual output / Theoretical output at designed speed 

Quality: This assesses the percentage of products that meet quality standards without requiring rework or being scrapped. Formula:

Quality = Good units produced / Total units produced 

By multiplying these three factors, OEE provides a single percentage that represents the overall effectiveness of equipment:

OEE = Availability × Performance × Quality 

An OEE score of 100% indicates perfect production with no downtime, optimal speed, and zero defects. In practice, world-class OEE levels are around 85%, providing a benchmark for improvement.

What is Total Effective Equipment Performance (TEEP)?

TEEP extends the concept of OEE by including total calendar time in its calculations, not just scheduled production time. It evaluates how well equipment is utilized in relation to its full theoretical capacity.

Utilization: This measures how much of the total available time is used for production. Formula:

Loading = Scheduled time / Total calendar time 

OEE: As part of TEEP, the OEE metric remains the same, representing the effectiveness of equipment during scheduled production time. Formula:

TEEP = Loading × OEE

TEEP provides a broader perspective than OEE, helping organizations understand how much unused capacity exists, either due to non-production days or unscheduled downtime. TEEP specifically highlights long-term opportunities for better capacity planning and utilization.

Key differences and applications from OEE include:

• Scope: OEE focuses on improving the effectiveness of equipment during scheduled production, while TEEP provides insights into maximizing overall asset utilization.
• Strategic Insights: OEE is often used for day-to-day operations and short-term improvement initiatives, whereas TEEP informs long-term strategic planning and capacity analysis.
• Value: Together, OEE and TEEP offer a powerful toolkit for understanding and optimizing manufacturing performance.

By leveraging these metrics, manufacturers can identify losses, prioritize corrective actions, and ensure sustained operational excellence.