Capacity Planning explained | Use Asset Utilisation to check if you can produce budget volumes

OEE of a line isn't as important as what that does with the total Machine time needed to produce your budgeted volumes. What is your Asset Utilisation?
Total Machine time is not just the pure production time, but also the time lost to activities like Breakdowns, Cleaning, Maintenance, Quality Defects, etc.
If this total Machine time come close to your Available time, you're utilising your assets to their maximum. That might sound nice and efficient, but you're going to be in trouble if you catch a bad spell of breakdowns or plan to increase volumes. That's why we aim for about 95% Asset Utilisation as a rule of thumb.
Is is true that a high A.U. is efficient, and if you have buffer stock it shouldn't be a big problem for you. But this utilisation does give you a very important indicator for where to prioritise your OEE Improvement Efforts. Improving a line with low OEE is only useful for reducing Labour costs - that can be worth quite a bit, but usually it's worth more to improve a bottleneck line and be able to sell more products.
#continousimprovement #OEE #capacityplanning
• Capacity Planning expl...
You've got until 2 September to sign up for the free Capacity & Labour workshop that I'll be hosting LIVE! www.tommentink...
00:01 Introduction to Capacity Planning
01:12 Financial Value of Improving OEE
03:28 Analysing Machine Capacity and Asset Utilization
07:39 Planning for Increased Production Volumes
09:19 Setting OEE Targets for Capacity
13:17 Linking Operations with Strategic Planning