What is production capacity? How to improve production capacity efficiency
Production capacity is one of the essential business performance measures of an enterprise, allowing to determine the ability to produce a volume of products in a specific time. The greater this capacity, the higher the level of efficiency in production. In the article below, let's learn with 1C Vietnam what production capacity is as well as how to improve production capacity.
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1. What is production capacity?
Production capacity is the maximum output that a company can produce using its available resources during a specified period of time. This metric is important because it informs the manufacturer's critical business decisions in both the short and long term.
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2. Types of current production capacity
2.1 Design capacity
Design capacity (also known as maximum capacity/standard capacity) is the maximum limit on production capacity that an enterprise can achieve under standard design conditions of machinery, equipment, and raw materials. material,...
2.2 Expected production capacity
Expected production capacity is the total maximum output capacity that an enterprise hopes to achieve under the conditions of compliance with standards, technological processes, production management capabilities, maintenance plans, and balance activities.
However, businesses are not always able to organize conditions according to the set standards and norms, and unusual problems often occur, causing the volume of products produced to not meet the expected standards. expected and expected.
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2.3 Actual production capacity
Actual production capacity is the actual number of products that an enterprise achieves under real conditions, this number has been verified after a period of time. This concept is commonly used by businesses in reporting, accounting and evaluating production capacity.
3. Factors affecting production capacity
3.1 Human resources
Human resources are an important factor in determining the production capacity of an enterprise. To meet work requirements, production units need to have a sufficient number of employees with a reasonable structure. This ensures that work is done efficiently and meets the growth and expansion of the business.
3.2 Facilities
If people are the prerequisite for the production process, then facilities are the condition to ensure that the production process runs smoothly. Facilities include machinery, equipment, lines, modern technology,...
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3.3 Organize and manage the production process
The role of the management team includes planning, organizing, leading and controlling skills. These skills ensure that the production process is carried out in accordance with the overall goals of the business as well as promptly corrected when errors occur.
4. How to improve production capacity
For businesses looking to expand their scale of operations, there are a number of solutions to increase production capacity below:
4.1 Reduce downtime in production
Downtime (also known as downtime) affects every aspect of a manufacturing plant, including raw material management, human resources, production scheduling, etc. Therefore, reducing Downtime will free up total plant capacity to better meet service level requirements. These improvements will reduce downtime, improve line efficiency, increase the number of units produced per hour and total factory capacity.
4.2 Optimize production process
Similar to reducing downtime in manufacturing, optimizing production processes will promote labor efficiency and increase capacity. This can be done by applying two traditional process improvement methods, Lean and Six Sigma. Additionally, businesses can start using just-in-time (JIT) to optimize production, cutting redundant processes and manufacturing overhead costs.
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4.3 Increase employee working hours
A common approach to increasing total factory capacity immediately or in the short term is to have employees work overtime. This solution may be feasible when production is seasonal or during interruptions.
However, adding overtime or overtime is often made under the assumption that the average efficiency of the factory is optimized and that the production process has undergone process improvement to maximize real output. every hour. Extending hours or shifts with inefficient processes is costly and does not increase machine capacity.
4.4. Invest in machinery and production equipment
If the budget allows, businesses can invest in buying new machinery to increase output. This solution is more feasible when existing machinery and equipment are operating at full capacity but still do not meet production capacity requirements.
4.4 Application of production management software
The best way to increase production capacity is to use production management software. The system will rely on real-time data and advanced cloud analytics. Production capacity can now be continuously measured to unlock machine capacity across the entire workshop. The software will use digital technology to calculate capacity, helping managers know exactly how much capacity is available at any time.
Thus, production capacity is one of the factors that shows the ability and level of efficiency in business. To improve this capacity, businesses can build and deploy necessary activities as analyzed above. In addition, if you need advice on solutions to improve your business's production capacity, please contact 1C Vietnam immediately for support.
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