Machine utilisation & efficiency, only half the story.

 

Machine utilisation and machine efficiency are probably the most commonly used KPI’s used to measure the performance of factory management. Both serve a purpose, but they do not by any means describe the “whole”.

The factor that completes the picture is “flow”, the state where product “flows” uninterrupted from one process to another, at a rate dictated by demand from the market.

Most factory managers know instinctively, if not by data, that their factories run best when there is uninterrupted flow  through the processes, but if they are measured on machine efficiency, (production units/time) as they often are, they will be pushed to maximise the efficiency of individual machine points, building up inventory elsewhere, and interrupting the flow, and compromising the productivity of the factory.

The measurement of efficiency of individual points of a production process is ingrained, it is a fundamental part of the cost accounting and investment disciplines we all take for granted, but badly needs to be re-thought and taught to emerging operations and general management.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
This entry was posted in Management, OE, Operations and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s