maji tools library
The Time Hierarchy
Every hour your factory loses has a cause and a cost. This framework makes both visible.
The problem with OEE
Traditional OEE (Overall Equipment Effectiveness) multiplies Availability × Performance × Quality into a single percentage. This has three problems:
- It obscures magnitude. A line at 65% OEE could have a 30% downtime problem and negligible quality losses, or moderate losses across all three. You cannot tell which from the number alone.
- It double-counts. Speed losses on waste units are counted in both Performance and Quality. The multiplicative structure makes this unavoidable.
- It cannot be valued in pounds. A percentage does not tell you what an improvement is worth. Time does: every lost hour has a financial value that depends on your constraint state.
- It cannot be summed across products. You cannot add OEE percentages from different SKU runs to get a meaningful total. Time-based measurement can: sum Potential Time and Actual Operating Time across any number of products (provided each has a SKU-specific bottleneck speed) and the ratio remains valid.
Time-based additive decomposition expresses every loss as a duration. Losses are directly comparable, mutually exclusive, summable across products, and convertible to financial impact.
How it works
Calendar Time is all time that exists. Through a series of subtractions (Non-working Time, Schedule Loss, Planned Downtime, Unplanned Downtime, speed losses and quality losses), we arrive at Potential Time: the theoretical minimum time needed to produce your actual Good Output at maximum bottleneck speed.
Everything between Calendar Time and Potential Time is a loss. The hierarchy classifies every loss into a mutually exclusive category so nothing is double-counted and every loss can be valued.
Key principle: The hierarchy is measured at the bottleneck: the process step that limits throughput. Non-bottleneck steps have excess capacity and are not the constraint.
Which metrics matter to you?
Before choosing a metric, identify your constraint state: can you sell more if you made more? Each metric widens the denominator one level up the hierarchy.
| Audience | Metric | Formula | Losses in scope |
|---|---|---|---|
| Shop Floor | Operating Efficiency | PT / Operating Time |
UPDT, LTSR, LTMW |
| Operations | OEE | PT / PPT |
Adds PDT |
| Management | OOE / Machine Efficiency | PT / Shift Time |
Adds Schedule Loss |
| Strategic | TEEP | PT / Calendar Time |
Adds Non-working Time |
| Strategic | Output per Labour Hour | Good Output / Labour Hrs |
Sales-constrained only |
Machine Efficiency and OOE are the same formula (PT / Shift Time). The name changes with strategic intent. OEE in majaco’s framework = PT / PPT (the additive equivalent of the traditional Availability × Performance × Quality). For full formula derivations and the acronym glossary, see the Efficiency Formulas reference.
The metrics
Click “Show me” to highlight the numerator (PT) and denominator in the cascade below.
Shop floor metric. UPDT, LTSR, and LTMW are in scope. Schedule Loss and PDT are not (planning decisions). World-class: ≥85%.
Operations metric. Adds PDT to scope - holds the team accountable for changeover time and planned maintenance efficiency. Since PT = Good Output / BNS, this equals Good Output / (PPT × BNS) = Good Output / Potential Output. This is the additive equivalent of the traditional A × P × Q, without double-counting speed losses on waste.
Management metric. Adds Schedule Loss: how well the operation uses all available shift hours. Same formula, different name: “Machine Efficiency” in sales-constrained contexts, “OOE” in production-constrained.
Strategic metric for production-constrained environments. Total asset utilisation including non-working time. Answers: “how much of the factory’s theoretical capacity are we using?”
Strategic metric for sales-constrained environments. Improving OOE or optimising crew size both increase this metric, reducing cost per unit.
Interactive Time Hierarchy
Every level is shown. Select a block to read more about it. The round buttons hide or show the levels below a block. The “Show me” buttons in the metrics section above highlight how each measure is built.
Swipe sideways to see the whole hierarchy.
Taken out of Calendar Time to give Shift Time. Still a loss in Total Effective Equipment Performance (TEEP), on production-constrained sites only.
- Weekends
- Nights, if the site does not run them
- Holidays
Taken out of Shift Time to give Planned Production Time. Still a loss in Machine Efficiency, also called Overall Operations Effectiveness (OOE).
- Paid breaks and meal periods
- Scheduled maintenance shutdowns (longer planned shutdowns)
- No customer demand
Taken out of Planned Production Time to give Operating Time. Still a loss in Overall Equipment Effectiveness (OEE). Counted at its planned length: an overrun is Unplanned Downtime.
- Changeovers
- In-shift maintenance on the line
- Start-of-shift checks
Stops longer than the classification threshold, plus overruns of Planned Downtime and Schedule Loss. Shorter stops stay in Up Time and show up as Lost Time Slow Running.
Time lost running below bottleneck speed while making Good Output. Stops under the threshold (Lost Time Short Stops) land here too.
Time spent making defective, rejected or unusable output, at actual speed.
Good Output divided by bottleneck speed. The only truly value-adding time in the hierarchy.
From time to money
The framework’s payoff: every lost hour has a pound value.
Every recovered hour produces additional saleable output.
Recovered time enables fewer people or fewer hours for the same output.
The difference matters enormously. The same 2.5 hours of UPDT per day can be worth £5.4M/yr (production-constrained, valued at throughput margin) or £82k/yr (sales-constrained, valued at labour cost saved): a 66× difference. Getting the constraint diagnosis right is not optional.
Formulas and glossary
All formulas, acronym definitions, the OEE equivalence proof, and diagnostic quick-reference are on the dedicated reference page:
Talk to majaco
See what your Lost Time is costing you
majaco can implement this framework in your facility, from data collection design through to live dashboards and financial valuation.