AboshOEE measures loss inside the time you scheduled to produce. Utilization measures how much of the calendar you scheduled at all. TEEP combines them: TEEP = OEE × utilization, so it measures productive output against all calendar time. A plant that runs two 8-hour shifts a day at 75% OEE has 66.7% utilization and 50% TEEP. Low TEEP is not automatically bad. Compare it with demand, how the asset is used, and the cost of adding capacity before deciding what to change.
One example showing all three metrics on the same day
A decision matrix that links each metric to a question
A clear warning about chasing utilization for its own sake
Three metrics, three slices of time
The three metrics use different time boundaries. OEE looks only at the time you planned to produce. Utilization compares that planned time with the calendar. TEEP, total effective equipment performance, measures good output at the ideal rate against every hour on the calendar.
Definitions of utilization vary between companies, so state yours. In this article utilization means scheduled production time ÷ calendar time.
- OEE: loss inside planned production time.
- Utilization: how much calendar time was scheduled for production.
- TEEP: fully productive time ÷ calendar time, which equals OEE × utilization.
Use OEE to find losses inside scheduled time, utilization to see how much time is scheduled, and TEEP to measure ideal-rate good output against the full calendar.
A one-day example
A line has 1,440 minutes of calendar time in a day. It is scheduled for two 8-hour shifts, or 960 minutes. Inside those shifts it achieves an OEE of 75%, which means 720 fully productive minutes.
Utilization is 960 ÷ 1,440, approximately 66.7%. TEEP is exactly 720 ÷ 1,440 = 50%. Multiplying 75% by the rounded 66.7% is approximately 50%; retain the unrounded ratio for the calculation.
Which question each metric answers
The table connects each metric to a decision. None can tell you, on its own, whether recovering capacity will improve customer output.
| Question | Metric |
|---|---|
| Why did scheduled production lose time or output? | OEE |
| Are we scheduling enough of the available asset time? | Utilization |
| What share of calendar time became good output at the ideal rate? | TEEP |
| Will recovering this capacity increase customer output? | None alone. Analyze the system constraint. |
A low TEEP is not automatically bad
If demand only needs one shift, unused calendar time is a choice, not a loss. A plant that adds work to lift a utilization number builds inventory it cannot sell. The healthy use of TEEP is to size an investment decision: before buying a second line, check how much fully productive time the first one leaves on the table.
Use OEE to find the losses inside scheduled time, and use the constraint to decide whether recovering them matters. The theory of constraints and bottleneck analysis guides show how.
- Demand
How much good output does the customer require?
- Capacity
How much can the constraint produce in the scheduled time?
- Loss
Which OEE losses stand between the two?
- Calendar
Only then ask whether more scheduled time is worth its cost.
Check how targets and definitions affect the reported score
Check whether the team changed planned time, built unwanted inventory to raise utilization or set a TEEP target without matching demand. Each choice can improve a reported score while leaving customer delivery unchanged.
Pair all three with throughput at the constraint, lead time and on-time delivery. Vrolen’s operational excellence metrics article explains how to connect them into one hierarchy.
Practical checklist
- State the definition of utilization you are using.
- Calculate OEE only inside scheduled production time.
- Calculate TEEP against the full calendar for the period.
- Check demand before treating unused calendar time as loss.
- Use TEEP to size capacity decisions, not to set shift targets.
- Look at the constraint before deciding which loss to recover.
- Report throughput and delivery next to all three metrics.
- Never compare plants that define scheduled time differently.
FAQ
FAQ
Sources and further reading
Authoritative references used to research and verify this guide.