What?
Production capacity refers to the maximum amount of product or output that a manufacturing facility, plant, or company can produce within a specified period of time. It is a measure of a company's operational efficiency and can impact its competitiveness in the market.
Production capacity can be influenced by various factors, such as the number of production lines, the availability of raw materials, the level of automation, and the availability of skilled labor. A company with high production capacity is able to meet customer demand, reduce lead times, and lower production costs. Measuring and managing production capacity is an important aspect of production planning and control, as it helps companies optimize their production processes and meet their business goals.
Ideally, every business wants to function at full capacity to maximize every opportunity to make money. However, the reality is that there are often inefficiencies and areas of improvement in the manufacturing process that lead to a drop in production output compared to the potential capacity.
Time Commitment: Medium
Features Required: Tally Sheets
Notes: Can
How?
- Determine your Machine-Hour Capacity
- Manually Measure your Capacity
- You can manually measure your production capacity by calculating the number of machines you have, then multiply that number by the output they have over a specific period of time. Depending on your preference this can be in hours or number of parts.
- Rough-Cut Capacity Planning
- Rough-cut capacity planning, otherwise known as RCCP, is a method of calculating production capacity. It looks at the productive hours on a given day and a product's throughput time — or the entire time it takes to make a product from start to finish.
- Capacity Planning and Scheduling
- While both manual calculations and rough-cut capacity production can work for a business, to really understand production capacity you need to dive into detailed planning and scheduling for every product that you make.
- Key metrics to track to understand production capacity
- Utilization: Utilization = Up Hours / (Total Hours = Up Hours + Down Hours)
- OEE : Overall Equipment Effectiveness = Availability X Performance X Quality
- Our new OEE Dashboards captures all aspects of this for you.
- TEEP: Total Effective Equipment Performance = OEE X Utilization
- Short term
- Optimize production processes: Streamline production processes by eliminating waste, reducing set-up times, and increasing machine utilization. Consider using tools such as lean manufacturing and Six Sigma to improve efficiency.
- Increase machine utilization: Increase machine utilization by reducing idle time and maximizing machine performance. Consider implementing a preventative maintenance program to minimize downtime.
- Long Term
- Invest in technology: Invest in new and advanced technology to increase machine performance, reduce downtime, and improve production speed.
- Implement flexible manufacturing systems: Implement flexible manufacturing systems that allow the production of multiple products on the same machine, reducing the need for additional machines and increasing production capacity.
- Train and develop employees: Provide training and development opportunities for employees to improve their skills and increase their productivity.
- Improve supply chain management: Enhance supply chain management processes to ensure timely delivery of raw materials and reduce production delays.
- Monitor and measure performance: Regularly monitor and measure production performance, and use data analysis to identify areas for improvement.
- Collaborate with suppliers: Collaborate with suppliers to improve the delivery of raw materials and components, reducing production delays and increasing capacity.
The machine-hour capacity refers to the number of machines that are in operation on a daily basis and the number of hours that they are in use.