1. Guidance of Capacity, Utilization, Constraints

 

Capacity, Utilization, Constraints

Capacity and constraints are linked; as constraints are reduced then capacity will rise. Utilization is the relationship of how much capacity is used versus how much is available; but remember that usage depends on production scheduling as well as the availability of equipment to produce.

Let’s look at some theory, and many examples, for insight into the possible issues to be resolved.

 

In general,

1. Capacity will depend on Product Mix of output desired.
2. Capacity will be controlled by one or more constraints, which are wasteful in good times or bad. At the department or plant level, capacity may be limited by the lowest of the manufacturing constraints, such as equipment or process or people. But constraints occur across all sections of an enterprise.
3. Adjectives are often used to explain capacity, constraints, and utilization. Words such as total, actual, practical, 10-shift, and 24/7, will indicate what is intended.
4. Be careful to clarify the terms, and the units, of the discussions that you will have with your fellow participants. If one person visualizes the ideal situation at a tree farm where trees grow around the clock, and another considers the usage of a church sanctuary where most activity is on one morning of the week, there will be a serious disconnect.

 

A basic and effective way to raise capacity in manufacturing

1. Identify constraints, and quantify the values.
2. Reduce the cycle time for the lowest constraint until it no longer is the lowest. Micromanage all of the limiting factors carefully.
3. Reduce the cycle time for the next lowest constraint, and so on.
4. Consider and improve factors that contribute indirectly; reduce down-time and changeover; work more hours, improve methods, cut scrap.
5. Capacity of an operation will be governed by its index time. Index time may be controlled by the operator, or by the machine or process. Or it may be controlled by a combination, if operator action is necessary in addition to an equipment function.
6. Start with the formal, official documentation for the operation considered. Confirm that especially bill of materials, part or product specification and router for each product are correct. Be sure that units are stated correctly, such as the number of component parts per final assembly.
7. Determine pure capacity off machine cycle as if there were no interferences. Later, compare the pure capacity to the practical capacity to illustrate how much potential saving there is.
8. Compare work and machine elements on a Man / Machine chart.
9. For the operation make a chart. List the actions taken by the machine during the entire machine cycle, and the time required in the time column. Enter the manual elements on the same time scale; what the operator is doing as the machine performs.
10. Highlight the “external” time, when the machine is waiting on the operator. Reduce the external operator time to cut the machine cycle, either by using more operators, changing assignments, eliminating work, or doing the work during the machine cycle as “internal” time. Improve methods and organize work so it is done more effectively. Determine if the machine index time can be lowered.
11. Does overall cycle time vary by crew size, for instance is cycle shorter if more people are utilized? Determine the most cost effective crew size, depending on output required.
12. Is crew size set for minimum headcount or for maximum output? This is a very important question, so be sure to answer it correctly especially for equipment which is a constraint or bottleneck. As an example, consider an automatic parts machine. It indexes, forms parts, and ejects them without operator control except for stock feeding and to clear jams. A common practice is to have one operator for perhaps 3 or 4 machines. However, if more than one of the machines jams up at once, the operator is busy with one and can’t unjam the others so they sit idle. I have seen a situation where an entire product line was slowed because, incorrectly, one man was assigned to four machines. Theoretically, the machines were not the constraint but actually, with a high percentage of jams, they starved the entire product line, kept output down, and many operators were idled. Of course, the real answer may be to reduce the number of jams but sometimes that doesn’t happen.
13. Can short interval scheduling add control? Assign a small amount of work perhaps 30 minutes, tell the worker how long the work should take, and require the worker to report when the work is finished. Then assign the next work element. This is very effective with non-repetitive work.
14. Calculate a Reasonable Expectancy output level for repetitive work. With time study or work sampling, establish a rate that a trained operator working with good skill and effort can maintain for the work day. Include appropriate lunch, break, personal and delay times. Set up reporting, then calculate and post results daily. Apply Reasonable Expectancies and expected down time to calculate an hourly output for all equipment but especially for constraints. Plan to meet sales levels and the product mix with straight hours, overtime, weekends, another shift, crew size variations. Publish an official manning chart, to assign people to operations depending on output and product mix, for the time frame.
15. Study reports for production equipment, to spot and reduce downtime, low operator performance compared to Reasonable Expectancies, high scrap rates, excessive maintenance.
16. Focus attention on the constraint operations to see that they are kept in operation, have plenty of material, receive immediate attention when there is a maintenance problem, are changed over as seldom as possible, are relieved at break and lunch and shift change. Observe the machines to assure that all heads are loaded, all space utilized. Develop optimum machine speed, considering operator workload and scrap rate. If constraints are not scheduled 24 hours a day, be sure to start them early to have their output on hand for the rest of the line when that equipment starts. Place lights, or alarms, at bottleneck equipment to alert others when that equipment goes down. Analyze scrap rates, reduce losses.
17. One factor that often reduces capacity and productivity is a variable schedule. Require that the production schedule for the next period of time be “frozen” and not changed, so that materials will be on hand and changeover time can be minimized. Otherwise some parts will not be completed because not all components are on hand, and changeovers will cut into production time, reducing capacity.
18. Study changeovers and down time, to reduce the elapsed time for them. Be sure to stock change over and replacement parts. Analyze response time, crew size, sequence of events, methods, tools.

Now for the non-workplace constraints

 

The first thought when you hear the word “constraint” may well be that there is some machine on the line that’s broken down or not going as fast as it is supposed to. This can happen, and it is definitely a constraint. There are other constraints as well.

Capacity across the factory can be no higher than the lowest capacity of any one operation. Factory wide capacity is particularly related to product mix as mix affects different steps in the process differently.

In addition, there may facility constraints to capacity. Some of them are:

 

Imposed constraints from corporate strategy

 

Cash availability can be paramount. Although projects with the best payback will be the most easy to justify.  

Some corporate strategy is intended to optimize one particular factor, and while it may do this well, it can have a negative effect elsewhere. Such contradictions are discussed at length in other workshops, but for this section on theory, the following examples serve.

 

1. Inventory control choices may be at variance. Just In Time material control systems reduce the amount inventory, but at the same time will not provide adequate components to fill unexpected sales orders.
2. At the same time, international JIT purchases are more subject to delay because of political changes, disease, natural disaster, than are local suppliers. Parts delay will cause production down time.
3. Automation can reduce labor cost, at the expense of greater investment. Automation may add more reliance on skilled labor and technology.
4. Preventative maintenance, PM, requires a cost to apply, which will be shown as indirect labor and maintenance materials. But PM will save direct production labor and materials, and reduce machine downtime and scrap rates, through more pure capacity and fewer line interruptions.
5. Buying large volume of parts from a single source will result in low costs. But delivery is directly dependent on variables at the vendor locations, such as typhoons, tidal waves, pandemics, governmental disagreements, tariffs, shipping backups and drought, fuel prices, etc.
6. Normally, purchases at a lower volume from another vendor are accompanied by higher prices, and the buyer will have much less leverage with the vendor. The upside however is that another pathway to obtaining satisfactory components has been established.

Jack Greene, Jackson Productivity Research

 

What’s Next?

You have searched the web to understand how the principals of capacity, utilization, and constraints management can benefit your organization, but maybe don’t know quite how to proceed.  For more information, please click https://jacksonproductivity.

JPR will be glad to share what we know about the subject, and will welcome your call or email. Tell me as much as you’d like, confidentially, about your organization’s situation and objectives, timetable and budget, and I’ll describe some practical actions to accomplish your scope. You will have a better understanding of the options.

 

There’s no cost or obligation to contact Jack Greene at 843-422-1298  

jack@jacksonproductivity.com