Sourcing Experts Reveal How to understand the supplier’s productivity?

By justchinait
December 19, 2020

Production capacity (capacity) is an important issue for all factories and buyers. It determines the maximum supply capacity of a supplier. When your supplier’s production capacity is lower than the procurement demand, you may face the risk of supplier delays, and the supplier will outsource your order to the foundry for processing.

Production capacity refers to the maximum that a work unit can handle at full capacity. The operation unit here can be a factory, department, machine or a single worker. The following should be grasped when calculating production capacity:

01. Determine the calculation unit of production capacity

Due to the wide variety of enterprises, the products and production processes of different enterprises are very different. Before calculating the production capacity, the production capacity measurement unit of the enterprise must be determined.

(1) Input and output

Production capacity is closely related to input and output. Different enterprises can choose input or output as the measurement unit of production capacity according to their nature and other conditions.

When a company uses output as the unit of measurement, it needs to consider how many types of products the company produces. If there is only one main product, the product can be used as the unit of measurement; if multiple products are produced, it is difficult to use one of them The output of each product is taken as the overall unit of measurement. In this case, the representative product measurement method can be used. Select the product that represents the company’s professional direction, the product with the largest product of output and working hours as the representative product, and other products can be converted to representative products using conversion coefficients.

The calculation formula of the conversion system Ki is as follows:


In the formula: Ki——The conversion factor of I product;

ti——the time quota of I product;

to——Represent the time quota of the product.

Sometimes companies use the output to calculate production capacity with low accuracy and cannot reflect production capacity well, so input can be used as a unit of measurement, such as the total number of equipment and installed capacity.

(2) Take the raw material processing volume as the unit of measurement

Some companies use a single fixed raw material to produce a variety of products. At this time, it is more appropriate to use the number of raw materials processed annually as the measurement unit of production capacity. The production characteristics of such enterprises are often decomposable, that is, using one main raw material to decompose to produce a variety of products.

02. Determine the factors affecting production capacity

(1) Product factors

Product design has a huge impact on production capacity. If similar products are produced, the operating system’s ability to produce such products is greater than the production capacity of subsequent products that are different. Generally speaking, the closer the output is, the more likely it is that the production methods and materials will be standardized so that greater production capacity can be achieved. In addition, the specific product mix designed must also be considered, because different products have different yields.

(2) Human factors

The tasks that make up a job, the various personnel involved in the activity, and the training, skills, and experience required to perform a task have an important impact on potential and actual output. In addition, the motivation, absence and rolling of related personnel are also directly related to production capacity.

(3) Facilities factors

The design of production facilities, including the size of the plant and the space left for expansion, is also a key influencing factor. Site factors, including transportation costs, distance from the market, labor supply, energy, and expansion space, are also very important factors. Similarly, the layout of the work area also determines whether the production operations can be executed smoothly.

(4) Process factors

Product process design is an obvious factor that determines production capacity, whether process design is reasonable to affect product quality. If the quality of the product cannot meet the standard, product inspection, and rework will increase, resulting in a decrease in output.

(5) Operational factors

An organization’s scheduling problems caused by the contradiction in the production capacity of different equipment or the contradiction in the work requirements, the inventory reserve decision, the delay of shipment, the desirability of the purchased raw materials and components, and the quality inspection and process control are all right Effective production capacity has an impact.

(6) Other factors

Product standards, especially the minimum product quality standards, can limit the options for managers to increase and use production capacity. For example, in order to meet the pollution standards of products and equipment, companies often reduce effective production capacity.

03. Calculate the production capacity of batch processing enterprises

In this type of enterprise, the organization of the production department adopts the principle of process specialization, and the product input and output have a long interval and obvious periodicity. Their production capacity calculations are closely related to the division of workshops and teams on the principle of process specialization.

(1) Calculate the capacity of a single device

Since the processed parts are not a single species, the number can reach hundreds of thousands. The shape and size of all parts are different, the processing steps are also different, and the processing time is different. At this time, the output cannot be calculated, but the effective processing time provided by the equipment can only be used for calculation, which is called machine time. Calculated as follows:


Among them: Ho——annual system working hours;

η——Planned utilization of equipment system working hours;

θ——Planned equipment repair shutdown rate;

S—Planned equipment repair downtime.

(2) Calculate team capacity

The workshop team is the smallest production unit. Each team is equipped with a certain number of equipment with the same processing technology, but their performance and capabilities are not necessarily the same. Therefore, the production capacity of the calculation team starts with a single device, and then the production capacity of these devices is integrated and calculated.

If the processing technical parameters of all the equipment in the team have little difference, the sum of the time of all the equipment is the production capacity of the team. If the technical parameters are very different, the machine time of the equipment with different parameters should be counted separately at this time, focusing on checking whether the equipment processing capacity of some large workpieces can meet the production requirements.

(3) Determine workshop capacity

Since the processing objects of the team are parts, their capacity should be measured by machine hour, and for the workshop, its production objects are often the number of products or parts, so its production capacity should be measured by output. The conversion between working hours and output is relatively simple.

(4) Determine factory capacity

The production capacity of the factory can be determined according to the capacity of the main production workshop, and workshops with insufficient capacity can be solved by adjustment measures.

04. Calculate the production capacity of the pipeline enterprise

(1) Calculate the production capacity of the assembly line

The production capacity of the assembly line depends on the production capacity of each process equipment, so the calculation starts from a single piece of equipment. Calculated as follows:

M single=He/ti

In the formula: M order-single equipment production capacity;

He——The effective working time (hours) of the single equipment plan period (year);

ti——the time quota for a single product to be processed on the equipment (hours/piece).

If the process is undertaken by a piece of equipment, the production capacity of a single piece of equipment is the process capability. When the process is undertaken by N equipment, the process production capacity is M orders×N.

(2) Determine the production capacity of the workshop

If it is a manufacturing workshop, it has both a parts processing line and a component assembly line. At this time, its production capacity should be determined by the assembly line. Even if the processing capacity of individual parts is lower than the assembly line capacity, it should be determined according to this principle.

If it is a parts processing workshop, each part has a dedicated production line, and all parts are matched with the company’s products, then the production capacity of the workshop should depend on the capacity of the production line with the smallest production capacity.

(3) Determine the production capacity of the enterprise

Due to the large differences in the processing objects and processing techniques between the various workshops, the performance of the equipment selected is very different, and the production capacity is inconsistent. Therefore, the production capacity of the basic production workshop is usually determined by the dominant production link. When the production capacity of the basic production workshop and the auxiliary production department are inconsistent, the enterprise should be determined by the production capacity of the basic production workshop.

Calculating production capacity is a necessary step for production capacity planning, and it is also an issue that enterprises must pay attention to. By calculating the production capacity of the enterprise, not only can we realize the actual ability of the supplier, but also know it well. The bottleneck and excess links in the production process can also be found, providing a basis for scientifically and rationally planning production capacity.

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