Monthly Archives: July 2014

Three keys to unlocking production capacity…

…little-known “secrets”… hidden in plain sight!

Like other complex systems, factories don’t always behave in the way that we might expect them to. It’s not that factories are capricious, or that the people who work in them are bloody-minded. It’s just that “common sense” approaches to increasing throughput often overlook the complexity. The keys to unlocking capacity are actually very simple, but simple solutions do not come from glossing over the complexity… they come from understanding it.

Let’s look at what’s going on here:

1. Constraints to capacity are real…

Understanding this provides the first key to maximising throughput. Why? Common sense tells us that asking for just a little bit more than we want out of the system will create the incentive to do more. But because capacity constraints are real, this simply overloads parts of the process or areas of the factory, creating bottlenecks. The effect of bottlenecks is delay – almost always disproportionate delay.

So, the first key to unlocking production capacity is this:

The factory will produce most if it is loaded just below its demonstrated maximum capacity – which will typically be between 80% and 90% of its theoretical maximum.

2. Resources are valuable – so use them well…

Which means maximising utilisation, right? Larger batch sizes, to keep those machines and operators busy… think of those utilisation “KPIs”! Well… maybe not! What if the batches are too big? What if batch sizes are bigger than the numbers actually needed? Tying up machines and operators on work that is not yet needed creates a bottleneck of a different sort. Everyone is busy, but they’re not producing what’s wanted right now. So choose batch sizes that fit with what is actually required.

Which means that the second key to unlocking production capacity is this:

Choose the right batch sizes. Even if machine and operator utilisation is lowered, smaller batches sometimes increase throughput.

3. Lead times are also real…

But do the lead times that you use for planning match the lead times that you actually experience? When supply or throughput of a particular area is not keeping up with demand, the reaction is often to increase the planned lead time for the related item or process, to give more time to the activity. But this creates an immediate increase in planned demand, burdening procurement or the workload in the related area. The problem is not about time, it is about capacity and no amount of extra time will make up for lack of capacity. Worse still, if the original delay was caused by a planned lead time that was already longer than necessary, then the existing problem has just been made even worse!

Leading to the third key to unlocking production capacity, which is this:

Planned lead times need to be long enough to get the job done and ensure people don’t keep running out of work – but not longer!

The common link between these three keys is that they are subtle and counter-intuitive. You may be imagining the potential responses: “What? You’re saying we should plan to make less!” or “This component is always takes ages and you want to shorten the lead time” or “How can we possibly make more, if we lower utilisation?”… and those are just the polite versions!

Taking counter-intuitive action requires trust and confidence, especially when others are sceptical. Evidence, sound theory and examples of successful practice will all help with this, as will effective personal and communication skills. MML emphasises the importance of all these areas in its Production Planning and Control Course – next date 16-18 September – click the link to find out more. Alternatively, if you would just like to know more about these ideas, or share your own with us, please contact us through our website, give us a call on 0870 438 1201 or post a reply to this blog. We hope to hear from you soon!