Utilization, productivity and efficiency.
One of the responsibilities of the Director of production is carrying out monitoring of KPI’S Utilization, Productivity and Efficiency.
These KPI’s are important because they help make the planning of master production plan budget and monitoring during the year by tracking the productive and unproductive hours.
The KPI’s mentioned above can be applied globally to the plant or focus: a chain or assembly lines, work cells, processes, machines and people
Use: Of the means that we have what percentage we efficiently, productive versus unproductive hours hours used to perform a service or a product.
Example: Hours of direct labor to perform work available:
Suppose in our plant have 100 employees and production planning master plan is weekly 40 hours a week.
Data available week starting hours 4000 hours a shift.
Depending on the nature of the organization considered as productive hours or unproductive can vary, I bring my personal experience and as I did.
Breakdown unproductive hours:
First group I define as staff needs.
Second group I define as technical requirements.
Scheduled and planned stops.
Unscheduled downtime and unplanned.
Other departments work.
Third group I define as quality needs.
Incidences of quality.
Incidences of the production process.
You can see the breakdown in this chart.
So we have broken down unproductive hours versus hours starting Use available.
Productivity: the percentage of hours planned to perform a service or product and the actual hours.
Efficiency: The ratio between the use and productivity.
Once we have the report of use and have enough data to perform weekly monitoring and develop an action plan aimed toward the area we want to improve:
Dimension of current or future workforce
Dimension of the line and current or future work cells
Dimension of the current and future machinery.
Master Production Plan
Preparation of monthly and annual budget.
We will be more efficient when we are able to fulfill the production plan or service with minimal means available.
I am personally in favor of having a high productivity against low utilization