Many organizations operate well below their desired or theoretical capacity, often in the 60%-80% range. There can be several reasons for this, and it is critical to understand the root causes so you can release untapped potential.
After conducting value stream mapping exercises, I always review the cycle time rate for each step in the process, which are then compared to the overall customer demand rate to determine which steps in the process are operating below demand requirements. This approach identifies capacity constraints and will direct the focus of the overall improvement effort. By improving the cycle time at the required steps, you improve overall system capacity.
The analysis begins with understanding the desired output rate of the system and developing solutions that will allow each step in the process to meet or exceed required demand. Often there is a need for additional work stations to meet capacity, or are efficiency and productivity concerns. Defects or rework may be impacting capacities as well.
Understanding the right problem to solve and prioritizing your improvement efforts is crucial to achieving the desired results. After you have identified the issues, use your “Lean Toolbox” to help ensure the ability to deliver to the customer in a timely manner.
