Hi Majesty, I would say both utilization and efficiency are important. Utilization helps determine effective an operation is and if the investment made in the operation is not wasted. Low utilization results in higher idle time which is wasteful. Now just because an operation or resource is utilized, that doesn't mean the operation is efficient. For example, having an employee fully engaged 8 out of 8 hours indicates that employee is 100% utilized. However, if half the time the employee is fixing mistakes, engaging in rework, or performing less useful tasks, that suggests the efficiency of the operation is low. Hope this helps. Mark
I use queuing theory in manufacturing environment.. Capacity is designed taking into account change equpiement (its part of the service time). In Your casae S7.1 system utilization is 100%, not 85%. 85% utilization is only possible if the factory had the capacity to produce 7,000 hammers and planned to produce only 6,000, leaving 1,000 as a idle capacity. In your case, there is no idle capacity because it is used for equipment set-up`s .Utilization = (full capacity-idle capacity)/ full capacity.
Hi there. I see what you’re saying here although the question isn’t specific on the cause of the delays in setup which could be the result of extremely inefficient setup processes or procedures that have nothing to do with the machine. The spirit of the problem is to illustrate that the machine is capable of producing 7000 hammers but is only producing 6000 and is thus under-utilized for some reason.
@@The_Business_Doctor Hello. The utilization rate results from averages and if changeovers take longer than they should, they still are an element of the process and at most reduce the efficiency rate, but not the utilization rate. If you meant that the machine was scheduled for 7,000 and performed 6,000 and remained idle for 15% (waiting time waste), the utilization rate was actually 85%. Greetings from Poland.
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Which (if any) is the most useful measure for an operations manager?
Hi Majesty, I would say both utilization and efficiency are important. Utilization helps determine effective an operation is and if the investment made in the operation is not wasted. Low utilization results in higher idle time which is wasteful. Now just because an operation or resource is utilized, that doesn't mean the operation is efficient. For example, having an employee fully engaged 8 out of 8 hours indicates that employee is 100% utilized. However, if half the time the employee is fixing mistakes, engaging in rework, or performing less useful tasks, that suggests the efficiency of the operation is low.
Hope this helps.
Mark
I use queuing theory in manufacturing environment.. Capacity is designed taking into account change equpiement (its part of the service time). In Your casae S7.1 system utilization is 100%, not 85%. 85% utilization is only possible if the factory had the capacity to produce 7,000 hammers and planned to produce only 6,000, leaving 1,000 as a idle capacity. In your case, there is no idle capacity because it is used for equipment set-up`s .Utilization = (full capacity-idle capacity)/ full capacity.
Hi there. I see what you’re saying here although the question isn’t specific on the cause of the delays in setup which could be the result of extremely inefficient setup processes or procedures that have nothing to do with the machine. The spirit of the problem is to illustrate that the machine is capable of producing 7000 hammers but is only producing 6000 and is thus under-utilized for some reason.
@@The_Business_Doctor Hello. The utilization rate results from averages and if changeovers take longer than they should, they still are an element of the process and at most reduce the efficiency rate, but not the utilization rate. If you meant that the machine was scheduled for 7,000 and performed 6,000 and remained idle for 15% (waiting time waste), the utilization rate was actually 85%. Greetings from Poland.
thank you very much.i understand now😇
You're very welcome -- I'm glad it help you.
Dr. Mark