For years, efficiency
has been a curious parameter in manufacturing systems. But, there are soft
factors in the shop floor that are not considered for analyzing the system in a
more comprehensible manner. While, efficiency
has been replaced with productivity it
is still not able to come to terms with the way in which it has to be
implemented in the system. Before, going ahead it is important that we
understand the fundamental difference that differentiates the two manufacturing
jargons with focus on their specific and generic interpretation.
Efficiency
Efficiency is measured by actual output production to aggregate
capacity of resources in the manufacturing systems. Resources can be anything
that is involved in the manufacturing operation, be it human workforce (or
labor) and machines. Thus, we calculate efficiency as:
Efficiency = Actual output / Capacity
For
illustration purpose, say capacity of a machine is 200 units per day and the
output produced is 150 units per day on day 1 and 180 units per day on day 2. The
efficiency of the machine is 75% and
90% for day 1 and day 2 respectively. The machine is a part of an assembly line
with stated capacity of 120 units per day with assembled components into a
finished product and the production for same day 1 and day 2 are 110 units and
100 units. The efficiency of the
assembly line is 92% and 83% on day 1 and day 2. This doesn’t make more sense
here as 75% efficiency of machine resulted in 92% efficiency of the line, while
90% efficiency resulted in 83% efficiency of the line. The actual reason for contradictory
results will be explained later for better understanding. From, above formula
we calculate the efficiency in a generic sense by aggregation of resources for
a system and with single resource for a sub-system. The efficiency of a
sub-system may not always provide the right answer, but would certainly make
sense by determining efficiency of a system.
Determining
the system boundaries is essential to understand what is within and beyond the capabilities
of the system. The system has to operate within the stated external constraints and other resources are aggregated to work
towards achieving the output by exploiting the internal constraints.
Productivity
Productivity is
a rather better measure of the system performance as compared to efficiency, which is more like a
performance tracker used for hiding the actual performance. Productivity of a manufacturing system
is calculated as:
Productivity = Output produced / Inputs used
The
productivity provides a rather better
measure than efficiency which doesn’t
consider the impact on output produced by the system. But, is there a consideration
for difference between the system and sub-system for productivity calculation. To calculate the productivity of a sub-system, one has to build the link between
sub-systems and output. If, one identifies that there is no direct value
addition by a resource and it doesn’t contribute to output produced, than it is
a clear indication of deficiency of the system. This where the concept of work content (or labor content) comes into the picture and provides a better
understanding of direct labor, indirect labor, overheads, materials and
depreciation among others. The different factors involved in the manufacturing
must be tied together for a better understanding of the system capabilities. But,
how does one calculate aggregate production cost and tie it down with labor,
capital and materials in the system. It is wrong to compare a unit of
measurement with different unit of measurement. To, avoid this it is important
that everything is translated in the same scale for comparison of productivity
and it is done first at aggregate level and then move down the ladder for
identifying gaps in sub-systems for improvement opportunities.
No comments:
Post a Comment