Capacity Planning

Schedule
• Understanding of capacity planning – line –
factory section (attendance/efficiency)
• Operation breakdowns, independent and
dependent processes, flow diagrams.
• Machine, equipment and manpower
requirements.
• Line and production balancing.
• Production control
• Role of the supervisor
 Factory capacity
• 500 operators working 48 hour week.
• Work content of 30 minutes per garment

Therefore

capacity = 500 x 48x 60 = 48000 garments/week

30

Ok? Any problems?

 Reasons for lost output
• Absenteeism
• Poor work methods (affects performance
& efficiency)
• Low operator performance
• Poor operator utilisation
• Style change (not only a cause of lost
output itself, but can cause all or some of
the above!!)
 Definitions
• On – Standard : Time the operator spends
on “measured” work, earning standard
minutes (SM).

• Off – Standard : Time the operator spends

on “un-measured” work or “measured”
work that is classified as “off-standard”.
 Definitions- “Measured work”
• That work to which a standard measure
(SMV, SAM) has been applied.

• Example of “measured work” that may be

classified as “off-standard”. An operator
may whilst learning a new operation be
taken off standard for payment purposes
but will still be contributing SMS as the
operation they complete will have SMV
applied.
 Off standard time
• Should be reported • Repairs (not known)
on “Labour cost • Paid average (for
control sheet” balancing)
• Waiting for work • Under re-train
• Machine breakdown • Indirect work –
• Unmeasured work – covering for
operation not yet supervisor
allocated SMV. • Supervisor/manager
• Sampling should be targeted to
stay within budget.
 SMV/SAM?
• Standard Minute Value (S.M.V.) is the time
allocated through work measurement for
an operation to be completed at a 100
rating. (Basic Work Content)
• Standard Allocated (Allotted) Minute
(S.A.M.) is an S.M.V. + any policy
allowances added.
 Definitions:
Operator Performance
• Primarily a measure of the effectiveness of
the individual operator

• SM’s earned “on standard” x 100

Time spent “on standard”

Sometimes referred to as “Pay” performance

as it is usually measured within an
incentive scheme.
 Definitions
Operator Utilisation
• A measure of how well the
supervisor manages to keep the
operators “on – standard”

= time “on-standard” x 100

time attended
 Definitions
Efficiency
• A measure of how well the
section/factory is run.
SM’s earned x 100
time attended.
• A measure of both the operator and
the supervisor
• Incorporates elements of operator
performance & utilisation into the
single measure
 Definitions
Absence / attendance

total operator time attended x 100

total contracted time
= attendance.
• Absence = 1/attendance
 Measures
factor/section/operator
• Standard hours (minutes) produced.
• Operator performance
• Operator utilisation
• Section efficiency
• Off – standard time
• Absence (attendance)
 Measures
Examples
• Section = 20 operators working 9 hour/540
minute day
• 2 operators are absent all day
• Attendance = 18 x 540 x 100
20 x 540

= 9720 = 90% (or) 10% absence

10800
 Measures
Examples
• An operator attends for 540 minutes
• Produces 1500 pieces @ SMV of 0.30
• Waits 60 minutes for work
• Waits 20 minutes machine breakdown
 Measures
Examples
• Sms produced = 1500 x 0.30 =
450.
• Time “on-standard” = 540 –
(60+20) = 460 minutes
• Performance = 450 x 100
460
= 97.8 or 98%
 Measures
Examples
• Operator Utilisation

= 460 x 100 = 85.2%

540
Not acceptable ?
 Measures
Examples
• Efficiency = 450 x 100
540
= 83%

Borderline ?
 Exercise
Section 1
Operator cont Att op. production SMV offStd Perf Uti Eff
min min
Alison 540 540 1. 1000 0.37 30
Betty 540 480 2 1120 0.30
charlie 540 0 3 0 0.26
Dorothy 540 540 4 950 0.23
3 350 0.26 75
Ethel 540 540 5 1070 0.45 15
Freda 540 540 6 1250 0.40 30
Gail 540 540 7 1200 0.21
3 880 0.26
Heather 540 540 8 600 0.85 30
Irma 540 540 8 600 0.85 45
June 540 540 9 1275 0.38 30
Totals
 Exercise
• Section 1
Operator cont. Att op production SMV OffStd Perf Uti Eff
mins
Alison 540 540 1. 1000 0.37 30 72.5 94 68.5
Betty 540 480 2 1120 0.30 70 100 70
charlie 540 0 3 0 0.26
Dorothy 540 540 4 950 0.23 66.5 86 57.3
3 350 0.26 75
Ethel 540 540 5 1070 0.45 15 91.7 97 89.2
Freda 540 540 6 1250 0.40 30 98 94 92.5
Gail 540 540 7 1200 0.21 89 100 89
3 880 0.26
Heather 540 540 8 600 0.85 30 100 94 94.4
Irma 540 540 8 600 0.85 45 103 92 94.4
June 540 540 9 1275 0.38 30 95 94 89.7
Totals 5400 4800 3.22 255 87.6 94.7 83
 Exercise
• Attendance = 4800/5400 = 89%
• total sms earned = 3982.30
 Capacity planning
• Factory
• Department
• Section
• Machine
• Skill
• Restricting or defining factor
 Capacity planning
• What is the starting point?
• How many garments can a section
produce?
• How many operators/machines do we
need to produce a given number of
garments?
• Same calculation – just reversed!
 Information!!
• Labour content (SMVs/SAMs/Std. hrs)
• Available operators
• Contracted hours
• Absenteeism levels
• Efficiency levels
 Capacity planning
• Information
• Information
• Information
• Obvious but where does it
come from?
• How accurate is it?
 Work content. SAMs, SMVs
• Are they accurate? (can self correct in
capacity planning)
• What operations do they cover?
• What operations are unmeasured or
performed by indirect operators. Be clear!
 Capacity planning - people
• How many garments can a given number
of people produce?
• Number of operators
• SMV (Labour content)
• Absenteeism
• Efficiency/ inefficiency!
 Capacity planning - people
• 500 direct operators working 48 hours/week
• S.M.V. = 25 per garment
• Absence level of 8%
• Average efficiency of 85%
• Contracted time
1. Calculate standard hour/minutes that can be
produced by operators.
2. Calculate how many garments that represents
 Capacity planning - people
• 500 operators x 48 hours = 24000 contracted
hours
• 24000 – 8% (1920 hours) absence = 22080
attended hours (absence costs 40 operators)
• At efficiency of 85% std. hours produced =
22080 x 85% = 18768 std hrs.
• 5232 hours lost to absence & inefficiency.=
21.8% of original contracted hours
 Capacity planning - people
• 18768 std hrs produced
• S.M.V. = 25 mins. or 0.417 std. hrs.
• Garment capacity = 18768
0.417
= 45007 garments.
 Capacity planning
• Under the same conditions how many
people are need to produced 70000
garments per week.?

• 70000 x 0.417 = 29190 standard hours

required.
• Each operator will produce 39 hours @
85% efficiency
= 39 x 85% = 33.15 std. hrs/week
 Capacity planning
• 29190 standard hours required.
• Each operator will produce 33.15 std.
hrs/week
• Number of operators = 29190
33.15
= 880.54 people.
• + Absence of 8% = 880.54 +8%.= 951
 Capacity planning
• Capacity planning is only as
accurate as the information it is
based upon!
 Capacity planning
• Limiting factors
• People X
• Machines?
• Department?
 Capacity planning-machines
• Auto pocket set machine
• S.M.V. 0.60
• Efficiency = 95%
• 15 machines available
• 8.50 hour day
• How many garments can they supply to
sections?
 Capacity planning-machines
• 15 machines x 8.50 hours = 127.50 hours/day.
• @95% efficiency std. hrs produced = 121.13 hrs
• SMV = 0.60 = 100 per hour at standard
• Output = 100 x 121.13 = 12113 garments
• Absence ignored as decision taken to ensure
absence cover (15 machines + 8* absence = 17
operators. 1 spare shared with pressing
 Capacity planning-machines
• Capacity must be increased to 25000 per
day.
• Each machine does 100 x 95% = 95 per
hour. 25000/95 = 263.15 hours. In 8.5
hour day = 31 machines
• However machines cost $75000 each and
have a six month delivery lead time.
• Try again!!!
 Capacity planning-machines
• Each machine will produce 95 per hour
worked.
• 25000/95 = 263.15 hours
• 263.15 hours / 15 machines = 17.54 per
machine per day
• 2 shifts
 Capacity planning
• Limiting factors
• People X
• Machines X
• Department?
 Capacity planning- Department
• Cutting room using semi-auto spreading
machines and computerised cutting head.
• SMV for spreading = 0.1584 per metre
• SMV for cutting = 0.050 per metre
• Average fabric content per gmt. = 90 cms.
• Standard working day= 8.50 hours (39 week)
• 3 spreading machines on 4 tables
• 1 cutting machine.
• Department runs at 90% efficiency and 8%
absence
 Capacity planning- Exercise
• How many people are needed to supply
the factory with 50000 garments per
week?
• What is machine requirement for 50000
garments per week?
• What do you recommend if production cut
to 24000 garments per week?
• All operators are able to use both spread
and cut equipment.
 Capacity planning-spreading
• 50000 garments x 0.90 metres = 45000
metres to be cut each week.
• Each metre Smv = 0.1584 therefore 45000
x 0.1584 = 0.1584 x 45000
60
= 118.80 std.hrs required
@ 90% efficiency = 132 operated hours./
3machines = 44 hour week
 Capacity planning- cutting
• 50000 garments x 0.90 metres = 45000
metres to be cut each week.
• Each metre Smv. = 0.05 therefore 45000 x
0.05 = 0.05 x 45000
60
= 37.5 std.hrs required
@ 90% efficiency = 41.70 operated hours
Capacity planning –cutting room
• Spreading 132 hours needed over 3 machines
• Cutting 41.70 hours needed.
• Total operating hours = 173.9
• Absence = 8% = 187.18 contracted hours
needed = 4.8 (5) people at 39 hour week.
• 4 operators work 8.50 hours (when all
attending). 1 operator works 2 hours early
and through lunch break = 14 hour extra machine
time per week. Helps on non-machine elements.
 Capacity planning-spreading
• 24000 garments x 0.90 metres = 21600
metres to be cut each week.
• Each metre Smv = 0.1584 therefore 21600
x 0.1584 = 0.1584 x 21600
60
= 61.60 std.hrs required
@ 90% efficiency = 68.40 operated hours./
3machines = 22.80 hour week
 Capacity planning- cutting
• 24000 garments x 0.90 metres = 21600
metres to be cut each week.
• Each metre Smv = 0.05 therefore 21600 x
0.05 = 0.05 x 21600
60
= 18.0 std.hrs required
@ 90% efficiency = 20 operated hours
Capacity planning –cutting room
• Spreading 68.4 hours needed over 3
machines
• Cutting 20 hours needed.
• Total operating hours = 84.4
• Absence = 8% = 91.2 contracted hours
needed = 2.3 (3) people at 39 hour week.
• 2 operators to be released.
• Can 1 operator be redeployed for part of
the day?