Understanding Teep vs OEE

180 N Riverview Drive No. 300
Anaheim, CA 92808
United States
+1 714 996 5302
marketing@parsec-corp.com
www.parsec-corp.com
TM
Understanding
TEEP Versus OEE
for Proﬁtable
Manufacturing
by Robert Hansen
Robert Hansen is the author of ‘Overall Equipment Effectiveness: A Powerful
Production/Maintenance Tool for Increased Profits’ and is the founder of RC Hansen
Consulting, LLC.

A simple definition would be:
OEE is the amount of perfect
production time relative to the
actual scheduled time used,
while TEEP is the amount
of perfect production time
relative to “Total Calendar
Time”.

To ensure profitable manufacturing, two
important aspects for developing a strategy
for a long-term successful OEE program must
be explored. These would be:
• Understanding Total Effective Equipment
Performance (TEEP) versus OEE
• Speed to Proficiency
A simple definition would be: OEE is the
amount of perfect production time relative to
the actual scheduled time used, while TEEP
is the amount of perfect production time
relative to “Total Calendar Time”.

The importance of
understanding your TEEP
number is to emphasize
the gap between current
operations and the world-
class future state.

Understanding OEE and TEEP
Therefore, about 2.5 days
are used for planned
maintenance and seven
days for experiments
for a total of 9.5 days of
planned downtime per
year. Assume that world-
class OEE is 75 percent for
this pharmaceutical work
center’s type of operation,
which means that perfect
production occurs for .75 ×
(365 - 9.5) = 266.6 days per
year. World-class TEEP would
be 266.6 ÷ 365 = .73 or 73%.
This is just 2% less than
world-class OEE.
The importance of
understanding your TEEP
number is to emphasize
the gap between current
operations and the world-
class future state. The
business case for action
should be developed with
world-class TEEP as the
target for the life cycle
performance. Often when
the overall benefits are
computed, organizations
“discover” that capital
additions for capacity
require $10.00 for every
$1.00 invested in achieving
capacity via world-class
TEEP1
.
Another approach to
understanding the TEEP
value would be to compare
the actual amount of good
product produced relative to
the amount of product that
could have been produced if
everything worked perfectly,
with 100 percent first pass
yield and at ideal rate for 365
days per year.
A simple “back of the
envelope” calculation can
be done, and usually the
number is significantly
lower than the current OEE
value. TEEP measures the
overall use of the asset, and
world-class levels would
be nearly equal to world-
class levels for OEE in the
pharmaceutical industry. It
measures the performance
of all planned work and
pushes support services
such as maintenance and
process engineering towards
excellence.
For instance, assume a
work center has planned
maintenance of one shift
(eight hours) every seven
weeks and an allowance
for planned experiments of
seven days a year. All other
efforts are to maximize the
use of the equipment for
planned production.

Speed to
Proficiency
The second understanding
is epitomized by “Speed to
Proficiency”, which comes
from the book “Breakaway”2
.
What this thrust brings to the
table is the revelation that
every day your operations
are not performing at world-
class OEE, (your) money
is being lost. Picture your
operation consuming raw
materials and providing
finished goods via a system
that has many different
conduits and pipelines that
are constantly leaking. The
gap between current state
and world-class is the level of
unnecessary leakage every
day.
By eliminating the leaks,
product can be provided
on time, in full, without
errors, and at the lowest
cost; which is the promise to
the customer that initiates
Breakaway results (growing
market share and refilling
the factory).
World-class TEEP is the
metric used to determine
the full capability of the
asset and helps to develop
the financial business case
between current state and
“what could be”. When the
total organization (including
marketing and sales)
understands the amount
of income that is being lost
daily, collaborative support
and a complete strategy
for quick action usually
develops.

Certainly, the most important step is to improve
fundamental OEE of the key product value
streams. This allows the growth wheel to cycle
by lowering prices; as demand increases and
refills the factory, another cycle occurs. TEEP
becomes the measure to expand availability and
maximize income from operations. Speed to
proficiency just means that the prize of survival
and job security will go to those who are first to
learn and put the tactical plans into action.

Sources
1. Hansen, Robert. Overall Equipment Effectiveness: A Powerful
Production/Maintenance Tool for Increased Profits. New York, New York:
Industrial Press, 2001, pages 56 – 65.
2. Fred, Charles. Breakaway, Deliver Value to your Customers–Fast.
San Francisco, CA, Jossey-Bass, 2002

TM
About Parsec
Parsec is the developer of TrakSYS™, a proven operations management
software application and solution platform designed to significantly improve
manufacturing processes. Parsec is committed to providing best-in-class
products and solutions to our worldwide community of clients to assist them in
optimizing their manufacturing operations. There are thousands of TrakSYS™
licenses in use around the globe in a wide variety of Industries.
TrakSYS™ helps manufacturers to maximize asset utilization and efficiency,
increase capacity with no new capital equipment, reduce production costs,
decrease lead time, and improve profitability. For more information about Parsec
and TrakSYS™ please visit the corporate website at www.parsec-corp.com.
Copyright Parsec Automation Corp. 2016
All trademarks are the property of their respective owners

Understanding Teep vs OEE

More Related Content

Viewers also liked (12)

Similar to Understanding Teep vs OEE (20)

Recently uploaded (20)

Understanding Teep vs OEE