OEE vs. TEEP: What’s the Difference and Why Does It Matter for Manufacturers?

The more insight manufacturers have into production line equipment performance, the better positioned they are to improve it. Metrics make this possible. One of the most common is overall equipment effectiveness (OEE), which benchmarks equipment uptime, overall output, and output quality. By tracking OEE, manufacturers are better prepared to identify efficiency issues, carry out capacity planning, and optimize operational decision-making. 

But OEE isn’t the only metric that matters. An often-overlooked measurement is TEEP, or total effective equipment performance. While similar to OEE, it provides a different perspective on machine uptime and usage, which can help improve overall productivity. 

In this piece, we’ll break down OEE and TEEP basics, explore how they differ, discover how they work together, and offer practical advice to make the best use of both metrics to improve your manufacturing operation. To understand how these metrics impact your bottom line, let’s start with how each is calculated. 

OEE vs. TEEP formulas

Before you can effectively use OEE and TEEP, you need to know what measurements underpin each and what formulas they use.  

The OEE formula 

OEE measures the amount of planned production time that is effective. It uses this formula: 

Availability x Performance x Quality x 100 = OEE 

• Availability is calculated by dividing the actual run time by the scheduled run time: 

Actual run time / Scheduled run time = Availability 

• Performance is calculated by dividing the total piece output by the standard or expected output: 

Total piece output / Standard output = Performance 

• Finally, quality is calculated by dividing right-first-time output with actual total output: 

Right-first-time output / Actual total output = Quality 

Here’s an example. Over the course of one week, measurements of Machine A are as follows: 

• Availability – 0.90, for an availability loss of 0.10 

• Performance – 0.87, for a performance loss of 0.13 

• Quality – 0.85, for a quality loss of 0.15 

Therefore, the OEE calculation is: 0.90 x 0.87 x 0.85 x 100 

This yields an OEE of 66.55%.  

The higher your OEE, the better. For example, an OEE of 60% or higher indicates good output, with room for improvement. Anything over 85% is outstanding. While OEE can climb into the 90% range, it likely will never reach 100%. 

The TEEP formula 

TEEP uses the same measurements as OEE, plus one more: Utilization. The TEEP calculation formula is as follows: 

Availability x Performance x Quality x Utilization x 100 = TEEP 

• Utilization is a measure of the amount of time equipment is scheduled to produce, divided by the total available time: 

Scheduled production time / Total available time = Utilization 

Here’s an example. A piece of machinery has 102 total hours of scheduled production time per week, out of 168 total available hours (24 x 7). This gives the following result for utilization: 

102 / 168 = .6071 

If we integrate this data with our OEE calculation above, we get the following TEEP value: 

0.90 x 0.87 x 0.85 x 060 x 100 = 39.93%. 

This value is much lower than OEE because it includes a measurement of the total time a machine could be available, which is 24/7/365. As a result, TEEP is a performance indicator often used to help companies identify fully productive time and find opportunities for increased efficiencies that incrementally increase utilization. 

Pro tip: Make sure you’re using the same timeframe for availability and utilization.  

With the formulas in mind, let’s explore how OEE and TEEP differ in practical application. 

OEE vs. TEEP: Key differences

While OEE and TEEP are similar, they have differences in three key areas: Time frame, purpose, and usage. 

• Time frame: OEE measures scheduled production time effectiveness, while TEEP measures effectiveness over total calendar time. 

• Purpose: OEE is used to improve production performance, while TEEP is used to uncover new capacity potential.  

• Usage: Companies typically use OEE to fine-tune operations, and TEEP to inform strategic decisions such as adding shifts or expanding production runs. 

Example comparison chart

How do OEE and TEEP work together?

With the proper approach to measurement and planning, OEE and TEEP can work together to improve productivity. This is because TEEP helps determine if equipment is being underutilized, while OEE improves processes that are already running. Tracking both makes it possible to improve operations. 

Consider the example above, which reported an OEE of 66% and a TEEP of 39%. Of the three metrics measured in OEE, quality came in last at 0.85. This suggests the need for improved quality control processes at earlier production stages to boost the number of right-first-time outputs. By increasing the quality value, companies can increase their OEE. 

The TEEP, meanwhile, shows a total performance of 39%. By increasing utilization from 102 hours to 115 hours per week, companies can bump up their TEEP to 45%.  

When to focus on OEE vs. TEEP

While both metrics are valuable, knowing when and where to focus your efforts can help optimize production. As a general rule, plant managers tend to focus more on OEE because it allows them to identify and improve current operational issues. Business leaders and capacity planners, meanwhile, often use TEEP to pinpoint opportunities for company-wide continuous improvements. 

In certain situations, companies as a whole should prioritize one metric or the other. For example, if businesses are faced with significant operational inefficiencies or production gaps, OEE is the quickest way to identify and resolve issues. If companies are considering expansion, looking into schedule changes, or exploring equipment investment, TEEP is the top priority. 

Once you’ve identified which metric to prioritize, the next step is implementing tools and strategies to improve them.  

Technologies and tactics to measure and improve OEE and TEEP

Knowing you have to measure and improve OEE and TEEP is just the beginning. The real challenge is improving them consistently and accurately. The right technologies and tactics can help. Technologies to help measure OEE and TEEP include: 

• CMMS and MES platforms: Computerized maintenance management systems (CMMS) and manufacturing execution systems (MES) often include tools that track and display OEE on demand. 

• Production monitoring systems with integrated sensors: Integrated sensors such as temperature, pressure, and vibration, paired with programmable logic controllers (PLCs), provide real-time data that inform both OEE and TEEP. 

• Dashboards that track both OEE and TEEP: Solutions that provide CMMS, MES, and ERP integration may provide dashboards that track OEE and TEEP side-by-side. 

Companies can also benefit from tactics such as: 

• Predictive analytics: Predictive analytics in manufacturing offers information about what may happen and what’s likely to happen based on current and historical data. This helps anticipate shifts in OEE and TEEP. 

• Automation: Task automation, such as the collection of performance, availability, quality, and utilization data, reduces the manual effort required to calculate OEE and TEEP. In addition, automated processes reduce the risk of data duplication or errors. 

• Proactive maintenance: Companies can also use predictive analytics to inform proactive maintenance. The sooner potential issues are addressed and equipment is repaired, the more stable OEE and TEEP values will remain. 

Next steps

OEE and TEEP are two sides of the same coin. One helps boost efficiency, while the other identifies opportunity. Used in tandem, they provide a cyclical approach to optimization that enables companies to both maximize current performance, find new pathways to productivity, and deliver long-term cost savings. 

ATS offers expert operational insights, machine health monitoring tools, and predictive maintenance solutions to help your teams maximize performance and capacity, both now and over time. Ready to optimize OEE and take on TEEP? See how ATS can help. 

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