Combined with throughput, you have two ways to track production line efficiency. This allows you to immediately identify problems in your production line when throughput is not up to par on certain machines.Īdditionally, you can track capacity utilization.īy calculating what each factory’s total manufacturing output capacity is, at any given moment, you can see what production lines are performing at their highest possible output. It essentially measures the average number of units being produced over a specific period of time. Throughput is the most important metric to track when studying your production lines. The production lines in your facilities are your bread and butter. This could mean anything from adopting new equipment that requires fewer materials to designing new parts that improve yield. While identifying where you are creating the most waste, you will find operations that in the long-term, can be improved upon.Long-term: Create less waste with new operational practices and equipment.Even if that isn’t the case, you could turn a profit by selling it to someone who can make use of it. Your excess waste can be recycled into new materials.Short-term: Identify scraps and factory returns for recycling.Identify which processes are creating the most waste and optimize them to bring waste down to an acceptable level. Each of your processes creates some variation of waste.Short-term: Identify material processes to catch excess material.Here are a couple ways you can identify and eliminate ways: Specific to manufacturing, one of the biggest sources is material waste. It can mean anything from employee hours, energy, materials, etc.
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You must weigh what is most important for your business.ĥ Ways to Improve Manufacturing Efficiencyīelow, we explore five areas of your business that you can improve upon in order to improve manufacturing efficiency.Ĥ Big Disadvantages of Lean Manufacturing – A Criticism of Six Sigma’s Approach
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But, you may also see an increase in defects and returns as a result. From then on, they understand that any bonuses or performance indicators are subject to that standard.īy making that decision, you may see production output increase by a significant amount. However, production efficiency in practice may mean something different for two different firms.įor example, you may believe that production efficiency means that your production lines are completing more projects, and you relay that information to your employees. “Efficient production is achieved when a product is created at its lowest average total cost production efficiency measures whether the economy is producing as much as possible without wasting precious resources.”
PRODUCTION EFFICIENCY HOW TO
How to Define Manufacturing Efficiencyįirst, you must define what manufacturing efficiency means to your individual firm.Ĭonsider this definition of production efficiency from Investopedia: In fact, since 1987, output per hour for workers in the manufacturing sector has increased by over 2.5 times.īut the landscape is always changing, and firms looking to stay ahead of the competition must constantly reinvent themselves. Regardless of your industry, improving efficiency is of paramount importance.Īfter all, it can mean cutting down on costs, maximizing employee time, and in the case of manufacturing, improving throughput.Ĭutting-edge manufacturing firms have always sought new methods for boosting efficiency in order to improve their bottom lines.