Published On: October 6th, 2023Categories: Machine Shop

Metrics That Matter

Most manufacturing shops have two primary focus points when considering metrics: efficiency and performance. Understanding efficiency and performance is essential to increasing productivity, operations effectiveness, and competitiveness. Uncovering just what is holding your shop back from high performance and efficiency can drastically improve the shop flow and prevent unnecessary expenses in the hope of artificially correcting these numbers. For shops that want to increase efficiency and performance, they must utilize two key metrics: TEEP (Total Effective Equipment Performance) and OEE (Overall Equipment Effectiveness). Utilizing these metrics through machine monitoring provides shops with an intuitive understanding of performance and efficiency. 

What are TEEP and OEE

While TEEP and OEE might sound like similar metrics, they are significantly different and best used together. Understanding TEEP and OEE as two separate yet equally important metrics can completely revise your machining operations for the better. 


As mentioned earlier, TEEP stands for Total Effective Equipment Performance. TEEP is calculated by multiplying four measured factors: availability, performance, quality, and utilization. It also takes into account equipment losses and schedule losses. Because of this, it is impossible to have a 100% TEEP because that would mean that your shop would have to produce flawless parts every hour of every day. You can also think of TEEP as calculated by multiplying OEE by Utilization, which is planned production time divided by all possible time.


Alternatively, OEE, which stands for Overall Equipment Effectiveness, is calculated by multiplying three of the same factors as TEEP. Availability, which is the percentage of actual production time the machine has scheduled availability. Performance, the machine’s operation speed compared to maximum capacity. And quality, which measures the rate of successful production. This allows shops insight into potential improvements for uptime, speed, and production quality.

What’s the Difference Between Both Metrics

To fully optimize these metrics, shops need to understand the differences between TEEP and OEE so they can utilize them both to their full potential. As highlighted above OEE only is calculated using only three of the same factors as TEEP whereas TEEP also includes utilization. The utilization factors allow TEEP to provide insights on whether machine optimization is being hindered by a lack of scheduled availability. A shop that is trying to ensure that all CNC machines in the shop are being fully realized would greatly benefit from tracking TEEP, as it would show them which machines would benefit from scheduling another shift so that all machines can be run to their full potential. However, if a shop is not concerned with downtime they might prefer to utilize OEE as it excludes downtime from its calculation and instead allows stakeholders to hone in on the efficiency of the machine during scheduled production. Overall, the key difference between these two metrics is a factor of utilization.

Selecting a Metric: TEEP vs OEE

Choosing between TEEP and OEE can be a difficult choice, requiring stakeholders to consider their shop’s short-term objectives and long-term goals. For the shop that wants a more in-depth view of machine optimization during production and the quality of the parts produced, OEE might be the better option. However, shops that want a more holistic view of machine utilization and can create flexible scheduling would greatly benefit from using TEEP as their metric of choice. It is also worth noting that for shops with the time and availability it could be beneficial to track both metrics to create the most balanced understanding of the shop’s CNC machining operations and overall operations effectiveness. This allows stakeholders to have the most comprehensive view of efficiency and performance throughout the shop leading to continuous growth and improvement throughout the shop.

About the Author: Katie Ruffing