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blog | August 18, 2015

Production Efficiency – Measurement & Definition (Part 1)

How factory floors are run can either make or break a manufacturing enterprise. The efforts your company makes towards providing good customer service and inventory techniques won’t be successful...

By WorkWiseSoftware

How factory floors are run can either make or break a manufacturing enterprise. The efforts your company makes towards providing good customer service and inventory techniques won’t be successful unless the same cooperation extends to the factory floor.

Every manufacturer needs to make effective use of their assets. The investment in production capacity is often significant. Think about how much it costs to set up a factory; the production line with all its machinery and technology. Another good way to look at how efficiently a business operates is to look at “productivity”. Productivity measures the relationship between inputs into the production process and the resultant outputs.

What is Production Efficiency?

Production efficiency is when a company cannot increase the output of a specific good without increasing costs or lowering the production level of another product. This is when a business is operating along its production possibility frontier, which is a curve that illustrates how much of a product the business can produce given existing resources. When production efficiency is achieved, a product is created at a low average total cost. Ultimately, production efficiency measures whether a company is producing the largest amount of goods possible without wasting resources. Sustaining production efficiency is important for manufacturing companies to ensure they’re producing an optimal amount of goods.

Productivity can be measured in several ways:

• Output per worker or hour of labor
• Output per hour / day / week
• Output per machine
• Unit costs (total costs divided by total output)

The unit cost measure is particularly important. A falling ratio would indicate that efficiency was improving.

Why is achieving high productivity important?

What makes a manufacturing shop floor manager happy?

A stable schedule and lead time flexibility. Many ERP systems assume that lead time is like a yard stick, when in reality, lead time is more like a rubber band. In the world of manufacturing, everything from machinery and skilled laborers to management priority changes are constantly affecting lead time.

We have discussed in other articles how engineering techniques such as product configuration and operational techniques like Lean/Kanban can improve efficiencies. But at the end of the day, the Master Schedule must be translated into a production plan that is reasonable and has enough elasticity to allow your key production to use their skills and experience to adjust on the fly.

For purposes of this discussion, let’s stipulate that our planning system has provide a high level production plan with dates and quantities and due dates.

The science and art of translating that plan into a detailed daily production schedule involves operational scheduling, queue time compression, and resource assignment.

Operations scheduling is the process whereby a production requirement with either a due date or start date is translated into a step by step schedule in which each operation and its associated details such as machinery and labor skill required is considered.

Shop Order Scheduling Methods

A number of methods can be used to schedule shop orders. Some commonly used scheduling methods are:

Forward Scheduling: This method uses the order start date or the current date, whichever is later, or the date of the next open shop day as the date to begin the first operation. Using this scheduling method, operations cannot overlap (unless a negative queue time is entered). For example, if an operation of a shop order has begun, the next operation cannot begin prior to the completion time of the operation in progress. If the operation is started, the start date is the run date (today). Queue time is added to the due date of the previous operation to calculate the start date of the next operation.

Backward Scheduling: This method uses the order due date to as its basis for scheduling and schedules the last operation first. The start date for an operation is determined based on the due date of the following operation. Queue time is subtracted from the start date of each operation to calculate the due date of the previous operation. In this way, the start date of the order can be calculated accurately, by taking into account queue time from all operations.

Offset Scheduling (Repetitive): This is a refined form of backward scheduling. Each operation is assigned a positive queue time which equals the number of shop days to offset the operation’s due date from the shop order’s due date. The start date of the operation is calculated based on the number of hours required, the same as backward scheduling. No queue times will be calculated between operations. Since due dates and start dates are calculated as offsets of the shop order due date, it is possible to create offset schedules with out-of-sequence operations or with operations overlapping in such a way as to be impossible to execute. For this reason, the user must define sensible offsets which will control the reasonable placement of operation start dates and due dates.

Overlap Scheduling: This method allows downstream operations to be started before the prior operation is completed. Queue time takes on different meaning in this scheduling method because it is used to control the start date of the operation. The absolute value of all non-positive queue times is added to the start date of the previous operation. This is used as the start date of the next operation causing those operation dates to overlap. Note that a zero queue time allows both the current operation and the prior operation to start on the same date. However, all operations cannot start on the same date. Use Offset Scheduling to give all operations same start date. If the queue time is positive, the start date of the operation is calculated from the due date of the previous operation as is done in traditional forward scheduling.

Parallel Scheduling: This method is the similar to backward scheduling except that operations are assigned to paths and each operation is scheduled in relation to the previously scheduled operation in the same path. The last operation in the root path uses the order due date as that operation’s due date. Up to eight paths can be scheduled: path number 9 is the root path. All parallel paths must have the same due date which is the start date for the root path. The parallel paths must come first in the shop order.

In the above descriptions, the term queue time and its use is discussed. Queue time has had a clouded past and at times a bad reputation, primarily because of abuse and over use. It is our contention that although some production environments can drastically reduce or eliminate queue time, there are still many products and processes that require its use and we feel that it is better to educate our people on the proper use and measurement of queue times than to pretend they are not needed, and not fool the system, but fool yourself.

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