Total Effective Equipment Performance: What Is It and Why Does It Matter?

The reality of manufacturing is that most equipment isn’t used for anything at full capacity, despite the fact that under-utilized machinery has a clear impact on the bottom line. Total effective equipment performance, or TEEP, is a method of measuring performance against total capacity, enabling manufacturers to understand and improve utilization.

What is total effective equipment performance?

TEEP is one of the two closely-related measures indicating how well a manufacturing operation is utilized:

• Overall Equipment Effectiveness, or OEE, measures the percentage of scheduled production time that is fully productive.
• TEEP measures the percentage of total calendar hours that are fully productive.

The difference between the two is simply the maximum time that is available for production, which for TEEP is 24 hours a day, 365 days a year. Its advantage is that it provides an insight into the true potential of a manufacturing operation.

How is TEEP calculated?

To calculate total effective equipment performance, you first need an overall equipment effectiveness (OEE) score which is based on the following three factors:

•  Availability: also known as uptime, this is the percentage of scheduled time when production is actually taking place.
• Performance: the speed at which production takes place as a percentage of the intended speed.
• Quality: the number of products of acceptable quality as a percentage of the total products started.

Using the factors above, you would calculate an OEE score as follows:

Availability x performance x quality = % overall OEE

To understand what those percentages mean in the real world, you can measure it against the metrics listed below:

60% - 65% = typical
85% = world-class
100% = perfection. No downtime, operating at optimum speed, and no poor products.

Using the OEE score above, you would calculate TEEP as follows:

TEEP (scheduled production as % of calendar time) = OEE x utilization

Why does TEEP matter?

OEE is useful in demonstrating how productive a manufacturing operation is while it’s running, during scheduled working hours. TEEP takes things a step further and highlights the impact of scheduled downtime—primarily the hours the factory is closed. It demonstrates the untapped potential in a manufacturing plant, or the "hidden factory," showing how much more capacity a manufacturer has available to increase production without spending a single dollar on new equipment or property.

How to use OEE and TEEP formulas

Using the OEE and TEEP calculations set out above, a typical factory with an OEE of 65% operating two standard shifts only on weekdays might have a TEEP of just 30%. Machinery not being utilized for two-thirds of the time represents a huge wasted opportunity. TEEP offers more than just a stark insight into the extent of untapped capacity in a manufacturing operation; it can help with business planning, providing an indication of sales capacity based on the full production capacity of the plant. TEEP is also useful for looking at the scheduling effectiveness of production lines, in particular, allowing manufacturers to model the impact of changes to opening times or shift patterns.

How industry 4.0 can help

Neither TEEP nor OEE are new concepts, but with Industry 4.0 well upon us, there's no doubt that it enables more effective, reliable, and efficient monitoring of machine utilization. Solutions powered by the industrial internet of things (IIoT) allow manufacturers to view utilization metrics in real time from anywhere in the world. Data is collected across different machinery, collated, analyzed, and presented back, offering precise and up-to-the-minute visibility on production performance. IIoT-driven analytics also provide an accurate baseline when assessing production schedules, helping companies optimize the manufacturing process, forecast demand, increase product quality, and prevent equipment failure—all of which helps manufacturers take another step closer to the holy grail of peak asset utilization.

Meeting factory potential relies on total effective equipment performance

The reality for most manufacturers is that assets are under-utilized. Total effective equipment performance is a useful tool in measuring performance against the maximum possible capacity and demonstrating the bottom-line utilization of assets. TEEP offers manufacturers the opportunity to understand and meet the full potential of their factories–without spending any money on new equipment. Ultimately, monitoring and improving TEEP offers the most cost-effective method of increasing asset utilization, throughput, and profit.