If anyone’s time is gold, that of the production manager and the general manager is “pure gold.” Therefore, their attention should be focused on key and specific indicators for them.
For the production manager, the key indicator is OEE (Overall Equipment Efficiency).
For the general manager, the scope of action is broader, encompassing other areas of the company: Sales, Logistics, HR, etc. Thus, to better fulfill their responsibilities, they need an indicator that provides a greater perspective.
That indicator is TEEP (Total Effective Equipment Performance), which allows the general manager to evaluate current production against current production capacity, balancing the company’s efforts if necessary.
TEEP integrates OEE but also Utilization.
TEEP = OEE x Utilization
Example: A factory can make screws almost perfectly, with a very high OEE, and the production manager can be proud that together with their team, they produce very well. However, if due to sales reasons only 100 screws are produced per day, the machines will run for only a few hours or minutes, and the company is in serious trouble. This is where TEEP makes a difference. TEEP includes Utilization, defined as:
Utilization = Planned production time / Total time
Planned production time would be the work shifts minus those times when production finishes before the end of the shift: Example: (8h x 2 shifts/day x 5 days) – “End of production” time
Total time according to the books is defined as 24h x 7 days. But each company should define it according to what they feel comfortable with, for example, 24h x 5 days, etc.
The TEEP indicator will allow the manager or the executive committee to evaluate their current production against their current production capacity and balance the company’s efforts.