Available Time: Calendar Time − Non-working Time
Planned Production Time: Shift Time − Schedule Loss
Planned Run Time: Planned Production Time − Planned Downtime
Actual Run Time: Up Time + Unplanned Downtime
Up Time: Potential Time + Lost Time Slow Running + Lost Time Making Waste
Potential Time: Good Output / Bottleneck Speed
Categories marked as "SUBTRACTED" are removed to arrive at narrower time definitions. However, they represent loss opportunities in broader efficiency metrics because equipment is not producing during these periods:
Critical Distinction:
- Planned Downtime is subtracted from PPT to define Run Time (the operational window), but when calculating OEE = Potential Time / PPT, the PDT remains in the denominator as a loss opportunity. Equipment is not producing during PDT, so it reduces OEE.
- Schedule Loss works identically — subtracted from Shift Time to define PPT, but remains a loss in Machine Efficiency = Potential Time / Shift Time.
- Run Efficiency excludes both PDT and Schedule Loss from its denominator, focusing purely on execution within the operational window.
Accountability Principle: Denominator choice determines scope. Narrow denominators (Run Time) measure execution only. Broad denominators (PPT, Shift Time, Calendar Time) include planning decisions as improvement opportunities.
majaco uses absolute time with additive loss decomposition rather than OEE's multiplicative percentage framework (A×P×Q). This design choice is mathematically necessary for cross-product comparison, facility-level aggregation, Pareto prioritisation, and direct financial valuation. Product-specific percentages create fundamental analytical barriers that time-based metrics eliminate.
Key Advantages:
- Cross-Product Comparison: Time allows direct comparison of losses across different products without percentage distortion
- Facility-Level Aggregation: Absolute time values sum naturally across lines and products; percentages do not
- Pareto Prioritisation: Lost time quantifies opportunity directly in hours, enabling accurate financial valuation
- Financial Valuation: Lost Time × Bottleneck Speed × Unit Margin = P&L Impact (immediate business case)
Production-Constrained: Market demand exceeds production capacity. Every unit of additional capacity translates to additional sales at full margin. Strategic focus: Throughput maximisation.
Sales-Constrained: Production capacity meets or exceeds market demand. Additional capacity does not translate to additional sales. Strategic focus: Cost optimisation whilst maintaining current output.
Note: Machine Efficiency and OOE are mathematically identical; terminology reflects strategic context. Labour Efficiency formula: Machine Efficiency × (Potential Crew / Actual Crew). TEEP formula abbreviations: PT=Potential Time, RT=Run Time, ST=Shift Time, CT=Calendar Time, PDT=Planned Downtime.
Run Efficiency = Potential Time / Run Time
Critical distinction: Measures shop floor execution within the operational window provided by planning. Shop floor teams control UPDT, LTSR, and LTMW but cannot influence Schedule Loss or Planned Downtime standards. World-class target: ≥85%.
Machine Efficiency = Potential Time / Shift Time = Run Efficiency × (Run Time / Shift Time)
Critical distinction: Extends accountability beyond shop floor to include Schedule Loss design and Planned Downtime standards. Hierarchical decomposition separates shop floor execution quality from planning effectiveness. Terminology varies by constraint state: "Machine Efficiency" (sales-constrained cost focus) vs "OOE" (production-constrained throughput focus). Formula identical.
Purpose: Measures labour productivity relative to theoretical minimum labour requirement. Used for workforce optimisation in sales-constrained environments.
Accountability: Site Managers, Operations Directors (workforce deployment strategy)
Sphere of Control: All operational losses (via Machine Efficiency) PLUS crewing levels
Formula (via Machine Efficiency):
Labour Efficiency = Machine Efficiency × (Potential Crew / Actual Crew)
Note: Labour component (Potential Crew / Actual Crew) not shown in time cascade
Alternative Formulation (direct):
Labour Efficiency = Potential Labour Hours / Actual Labour Hours
Where: Potential Labour Hours = Potential Time × Potential Crew; Actual Labour Hours = Shift Time × Actual Crew
Interpretation: Labour productivity reflects both machine efficiency losses (equipment time optimisation) and crewing efficiency (labour deployment optimisation). Improving Labour Efficiency creates value through reduced labour cost whilst maintaining output.
Sales-Constrained Valuation:
Annual Labour Cost Saving (£) = Reduced Labour Hours × Fully Loaded Labour Rate
Purpose: Measures equipment effectiveness against theoretical maximum (24/7/365). Used for strategic capacity planning in production-constrained environments.
Accountability: Site Managers, General Managers, Operations Directors
Sphere of Control: All operational and strategic decisions including shift patterns, capital investment
Basic Formula:
TEEP = Potential Time / Calendar Time
Expanded Form:
TEEP = Potential Time / (Potential Time + LTSR + LTMW + UPDT + PDT + Schedule Loss + Non-working Time)
Hierarchical Decomposition:
TEEP = OOE × (Shift Time / Calendar Time)
This separates: (1) OOE (operational effectiveness during scheduled shifts), (2) Facility Utilisation Factor (shift pattern deployment)
Why Calendar Time Denominator? In production-constrained environments, every hour of idle equipment represents foregone sales at full margin. Weekend closures, night-shift gaps, and holidays are legitimate strategic capacity opportunities.
⚠️ Critical Error — Sales-Constrained: Never use Calendar Time as denominator in sales-constrained businesses. When production capacity exceeds market demand, unutilised weekend time has zero financial value (cannot convert idle capacity to incremental sales).
Typical Values (Production-Constrained): TEEP: 30-50% | OOE: 50-70% | OEE: 60-85%
Production-Constrained Valuation:
Annual Opportunity (£) = Lost Time × Bottleneck Speed × UMP × Operating Weeks/Year
Where: UMP = Unit Sales Price − Unit Raw Material − Unit Processing − Unit Distribution (excludes labour)
Note: Labour cost excluded from UMP because labour already present during Lost Time — eliminating losses increases output without reducing labour cost.
Scenario: Crisp factory reveals: Run Efficiency = 82% (good shop floor), Machine Efficiency = 56% (poor overall), Labour Efficiency = 39% (very poor labour productivity)
Root Cause Analysis:
Step 1 — Calculate Time Allocation Factor:
Time Allocation Factor = Machine Efficiency / Run Efficiency = 56% / 82% = 68%
Interpretation: Problem is planning effectiveness (68% time allocation), NOT shop floor execution (82%). Run Time represents only 68% of Shift Time, indicating excessive Schedule Loss or Planned Downtime.
Step 2 — Calculate Crewing Factor:
Crewing Factor = Labour Efficiency / Machine Efficiency = 39% / 56% = 70%
This means: Potential Crew / Actual Crew = 70%, or equivalently, Actual Crew / Potential Crew = 143%
Interpretation: Line is overstaffed by 43% relative to theoretical minimum. Combined with low Machine Efficiency, this creates compounded labour cost waste.
Improvement Priority Cascade:
- Time Allocation (68% → 90%): Reduce Schedule Loss and Planned Downtime to increase operational window from 68% to 90% of Shift Time (break optimisation, SMED for changeover reduction, campaign length optimisation)
- Shop Floor Execution (82% → 90%): Reduce UPDT, LTSR, LTMW through TPM, operator training, quality control improvements
- Crewing Optimisation (70% → 90%): Right-size crew from 143% to 111% of theoretical minimum (assuming Machine Efficiency reaches 81%). Requires line reconfiguration analysis
Financial Impact (Sales-Constrained):
Assuming Shift Time = 80 hours/week, Actual Crew = 12 FTE, Fully Loaded Labour Rate = £25/hour:
- Current Labour Cost: 80 hours × 12 FTE × £25 = £24,000/week
- Target Labour Cost at 81% Machine Efficiency + 90% Crewing Factor: Target Crew = 8 FTE / 0.9 = 8.9 FTE → Cost = 80 × 8.9 × £25 = £17,800/week
- Annual Saving Opportunity: (£24,000 - £17,800) × 52 weeks = £322,400/year
