How much do we plan and how much do we leave (planned) "at random" ?
n our "Production Planning" courses, when we get to the capacity calculation of production capacity and especially how much we choose to fill capacity, many participants have the same frustration: WE KNOW (it is 100% sure) that we will have variations in customer orders , that there are problems with machines and equipment (it does not work at 100% capacity), that we do not have enough operators sufficiently prepared, but we insist on planning at theoretical capacity (maximum). "We know" and "We insist", meaning Management, of course.
The planning theory (regardless of the planned resource) tells us not to take into account more than 85% of the resources, so as to leave a reserve of 15% for the unforeseen. Sometimes managers will say (confirmed from practice): “15% unplanned? It's not possible! In a program of 15 shifts per week, 15% means that 2 shifts we pay in vain and do not produce value! ”
A healthy approach, some would say (more familiar with the figures that show results), a forced approach say many operations that know and what is below these figures (have you thought why 85% OEE is an exceptional result?).
As a definition, the maximum (theoretical) capacity is that which a process and equipment can reach, not taking into account the losses.
When we plan 100% of the theoretical capacity do we know or take into account the losses? Do we even know how big these losses are? Or do we just do what the boss says, tired of signaling that theoretically it doesn't mean real?
Theoretical capacity planning has a hidden and dangerous component: it decreases the motivation of employees in the production area (and not only in this area). How? Follow the table below and try to plan so that you can reach your target - (calculations have already started).
Day 1 2 3 4
Theoretical capacity (no. Pieces) 100 100 100 100
Real capacity (no. Of pieces) 85 85 85 85
Planned (no. Pieces) 100 100
Made (no. Pieces) 84 86
Difference -16 -30
Can't you succeed? No surprises, just plan to theoretical capacity! Now imagine that you are the production operators who will never succeed in reaching their target set by planning. Never! You feel very motivated to continue, don't you?
How do we still recover those planned percentages over the real capacity? Through additional hours and days of production. Who pays for these overtime hours? If your clients pay them, congratulations, keep planning at the theoretical capacity!
In conclusion, it must be emphasized that planning cannot be done at maximum capacity and can be achieved without being integrated into the system, ie in partnership with all other processes (operational, maintenance, quality, HR, ...) and without to consider the measurement and continuous improvement of performances!
The planning theory (regardless of the planned resource) tells us not to take into account more than 85% of the resources, so as to leave a reserve of 15% for the unforeseen. Sometimes managers will say (confirmed from practice): “15% unplanned? It's not possible! In a program of 15 shifts per week, 15% means that 2 shifts we pay in vain and do not produce value! ”
A healthy approach, some would say (more familiar with the figures that show results), a forced approach say many operations that know and what is below these figures (have you thought why 85% OEE is an exceptional result?).
As a definition, the maximum (theoretical) capacity is that which a process and equipment can reach, not taking into account the losses.
When we plan 100% of the theoretical capacity do we know or take into account the losses? Do we even know how big these losses are? Or do we just do what the boss says, tired of signaling that theoretically it doesn't mean real?
Theoretical capacity planning has a hidden and dangerous component: it decreases the motivation of employees in the production area (and not only in this area). How? Follow the table below and try to plan so that you can reach your target - (calculations have already started).
Day 1 2 3 4
Theoretical capacity (no. Pieces) 100 100 100 100
Real capacity (no. Of pieces) 85 85 85 85
Planned (no. Pieces) 100 100
Made (no. Pieces) 84 86
Difference -16 -30
Can't you succeed? No surprises, just plan to theoretical capacity! Now imagine that you are the production operators who will never succeed in reaching their target set by planning. Never! You feel very motivated to continue, don't you?
How do we still recover those planned percentages over the real capacity? Through additional hours and days of production. Who pays for these overtime hours? If your clients pay them, congratulations, keep planning at the theoretical capacity!
In conclusion, it must be emphasized that planning cannot be done at maximum capacity and can be achieved without being integrated into the system, ie in partnership with all other processes (operational, maintenance, quality, HR, ...) and without to consider the measurement and continuous improvement of performances!
