Surprisingly, a number of manufacturers don’t know how to calculate their productivity rate in manufacturing. Because of this, they have a hard time reconciling the production volumes emerging from individual work cells and across their entire shop floor. As such, they can’t put plans in motion to improve their cycle times and production throughput. So, why does this happen? Better yet, how do you figure out your manufacturing productivity rate?
Your Employees Don’t Work the Full 8 Hours
The most important aspect of calculating your productivity rate is to first realize that while you pay your employees for a full 8 hours, they can’t possibly work that full 8 hours. I’ve often had clients who were astonished at their production volumes and wondered why they were so low relative to the 8 hours of paid work time.
Their problem was that they didn't clarify how much work their employees actually performed. Without a clear understanding of actual hours worked, there is no way to eliminate down time in manufacturing. So, to clarify the process, I've included the criteria to be aware of when looking at your productivity rate.
- Employees take breaks in the morning and afternoon.
- Employees don’t work at lunch.
- How much time are they allowed for both breaks and for their lunch?
- Take that time and deduct it from the 8 hours.
While some of you may think this is rather obvious, for others, it’s easily forgotten. Let’s assume that both breaks are 15 minutes each, and lunch is 1 hour. When you take that 1& ½ hour away, it leaves you with 6 & ½ hours of available work time. Now you have the amount of available time your production employees work, but they don’t work at 100% productivity, and therefore don’t work a full 6 & ½ hours– that’s not realistic. So, what is your productivity rate?
This is how you figure it out. Remember, this is a simple example, but the basic rules apply.
Example of Productivity Rate
To make the example easier, I’ve provided the calculation based on minutes.
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1 hour = 60 minutes, so 6 & ½ hours = 390 minutes
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Lost time during analysis: 135 minutes (this time is captured throughout the day)
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Available work time in minutes: 390 – 135 = 255 minutes
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Productivity rate% = 255 minutes divided by 390 minutes
Setting up a lean work cell is just one portion of adopting lean manufacturing principles. The above video explains how to design and layout these work cells, while also showing how to determine the productivity rates emerging from these cells. You can learn more by going to: Simplifying Lean Manufacturing: Work Cell Output, Cycle Time Variances & Production Volumes
Determining Manufacturing Productivity Rates:
When you do this exercise, you really have to be there analyzing the time with the production employee. Granted, it is somewhat of an uncomfortable situation, so it’s important to explain to the employee why this is being done. The intention is not to time them. The intention is to capture lost time, that’s all. While many companies have systems in place and can track cycle times through work orders, it simply doesn’t compare to being there and witnessing the problems yourself. Welcome lost time, it is absolutely needed to make this exercise work. It will help you pinpoint reasons for that lost time, improve your productivity rate, decrease your cycle times, and improve your production throughput.
Tracking Cycle Time Variances:
Perhaps the best reason why this exercise is so important, is because production employees often state that they know what the cycle time is. That’s fantastic. However, knowing what the cycle time is now means nothing when compares to what it should or could be. In this case, it's about tracking the cycle times and their variances from individual work cells. Once you've defined your manufacturing productivity rate, it's important to move forward and track the variances in cycle times emerging from that particular work cell. I've included a link below to help you do just that.
The above video, table and graph are taken from the article: Cycle Time Tracking & Variance Analysis in Excel for Small Manufacturers. The article includes a sample excel sheet that allows you to track the cycle times and variances from individual work cells. You can then graph them to see what is causing high and low times.
To close the book on this, let’s assume your cycle time for the operation is 5 minutes. Therefore, your employee did 51 operations in 255 minutes. Every improvement you make in eliminating lost time will increase that number of operations. If you find ways to eliminate 25 minutes of downtime, then you’ve increased your operations at this work station by 5%, or 10%.
I’ve used simple and straightforward applications here to make it easy to follow. Several of you may understand this completely, while others may not. Over time, I will add more in-depth examples of where I have done projects to improve productivity rates for clients.
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