What is TEEP (Total Equipment Effective Performance)?
My security guard is willing to guard my house 24hours a day, but I tell him to guard my house for only 12 hours. OEE measures how effectively he is doing the job in 12 hours. TEEP, whereas, measures the same, and in addition, also measures the extent of my stupidity in stating him to work only 12 hours a day while he was willing to work for 24 hours straight.
Losses on the shop floor can be classified as Equipment losses and Schedule losses. Loss occurred when the machine is scheduled to run are called as Equipment loss. We can measured it by OEE.
Schedule losses are concerned to the period when the machine was not scheduled to run but was still available to do so. For example, Lunch and tea breaks, non-working shifts, holidays, and no orders. This is measured as Utilization.
OEE vs. TEEP
- TEEP considers both equipment and schedule losses, i.e. OEE & Utilization
- OEE measures how efficiently you spent your scheduled production time
- TEEP measures how efficiently you utilized the entire calendar time
TEEP calculation
- Utilization = Planned Production Time divided by Total Available Calendar Time
- TEEP = OEE and Utilization multiplied
Case 1
A machine’s OEE is 70 %. It runs 24 hours a day without a break, 5 days a week.
The Utilization is 5/7, or 71.42 %.
TEEP = 100 x ((OEE/100) x (Utilization/100)) = 50 %
Case 2
A machine’s OEE is 60 %.
It works 12 hours a day, with lunch and tea breaks totaling 1.5 hour, 6 days a week, the Utilization is (10.5 x 6)/(24 x 7) = 37.5 %
TEEP = 100 x ((OEE/100) x (Utilization/100)) = 22.5 %
Action point:
If I take out a bank loan to purchase a machine, the bankers expect to be paid the principle + interest on the loan every month. They don’t care how long I operate the machine. If I only run the machine for 12 hours a day, my revenue is half of what it might be if I operated it 24 hours a day. If orders are not a limitation, it makes sense for me to operate my machine for longer periods of time — 24 hours, across breaks, and so on. TEEP makes more sense as a measure of my capacity to repay the bank loan than OEE. The TEEP definition, TEEP computation and OEE vs. TEEP differences are therefore important to understand.