Capacity Planning

Factory capacity
500 operators working 48 hour week.
Work content of 30 minutes per garment
Therefore capacity of 500 x 48x 60
30
= 48000 garments per week!!!!
Ok? Any problems?

Reasons for lost output

Absenteeism
Poor work methods (affects performance
& efficiency)
Low operator performance
Poor operator utilisation
Style change is not itself a cause of lost
output, it can cause all or some of the
above!!

Definitions
On standard : that time the operator
spends on measured work earning
Standard Minutes.
Off-standard : that time the operator
spends on un-measured work or
measured work that is classified as offstandard.

Definitions- Measured work

That work to which a standard measure
(SMV, SAM) has been applied.
Measured work sometimes may be
classified as off-standard. An operator
may be learning a new operation may be
taken as 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
on Labour cost
control sheet
Waiting for work
Machine breakdown
Unmeasured work
operation not yet
allocated SMV.
Sampling

Repairs (not own)

Paid average (for
balancing)
Under re-train
Indirect work
covering for supervisor
Supervisor/manager
should be held
responsible 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.
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
= SMs 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.
= SMs earned x 100
time attended.
A measure of both the operator
and the supervisor

Definitions- Efficiency
Incorporates elements of operator
performance & utilisation into the
single measure.

DefinitionsAbsence/attendance
= total

operator time attended x 100

total contracted time
= attendance.
Absence =reverse

Measures factor/section/operator

Standard hours (minutes) produced.

Operator performance
Operator utilisation
Section efficiency
Off-standard time
Absence (attendance)

ABSENCE CALCULATION

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

PERFORMANCE, UTILISATION,
EFFICIENCY

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- definitions
Section 1
Operator cont. Att
mins
Alison
540 540
Betty
540 480
charlie
540 0
Dorothy 540 540
Ethel
Freda
Gail

540 540
540 540
540 540

Heather
Irma
June
totals

540 540
540 540
540 540

op production SMV OffStd Perf Uti

1.
2
3
4
3
5
6
7
3
8
8
9

1000
1120
0
950
350
1070
1250
1200
880
600
600
1275

0.37 30
0.30
0.26
0.23
0.26 75
0.45
15
0.40 30
0.21
0.26
0.85 30
0.85 45
0.38 30

Eff

Exercise- definitions
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
255 87.6
94.7 83

Exercise- definitions
Attendance = 4800/5400 = 89%
total sms earned = 3982.30

CAPACITY PLANNING

Capacity planning
How many garments can a section
produce?
How many operators/machines do we
need to produce a given number of
garments?

Capacity planning

Limiting factors X
People
Machines?
Department?

Information!!

SMVs/SAMs/Std. hrs
Available operators
Contracted hours
Absenteeism levels
Efficiency levels

SAMs, SMVs
Are they accurate?
What operations do they cover?
What operations are unmeasured or
performed by indirect operators. Be clear!

Capacity planning

Limiting factors
People X
Machines?
Department?

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-1

500 direct operators working 48 hours/week

S.M.V. = 25 per garment
Absence level of 8%
Average efficiency of 85%
1. Calculate standard hour/minutes that can be
produced by operators.
2. Calculate how many garments that represents

Capacity planning people-1

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-1

18768 std hrs produced
S.M.V. = 25 mins. or 0.417 std. hrs.
Garment capacity = 18768
0.417
= 45007 garments.

Capacity planning People-2

S.M.V. = 25 per garment
Each operator will produce 39 hours @
85% efficiency
How many people are need to produced
70000 garments per week.?

Capacity planning People-2

70000 * 25 / 60 = 29166.67 standard hours
required.
= 39 x 85% = 33.15 std. hrs/week
29166.67 standard hours required.
Each operator will produce 33.15 std. hrs/week
Number of operators = 29166.67
33.15
= 879.84 people.
+ Absence of 8% = 879.84 +8%.= 950

Capacity planning

Limiting factors
People
Machines? X
Department?

Capacity planning-machines-1

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-1

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 if decision taken to ensure
absence cover (15 machines + 8% absence =
16.2 operators. 1 spare operator required

Capacity planning-machines-1
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-2
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
Machines
Department? X

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 or (39 hrs/
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.

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% = 189.02 contracted hours
operator req =189.02/39 = 4.8 (5) people at 39
hour week.

Capacity planning cutting room

Available spreading m/c = 3

spreading m/c untilisation/wk =3 x 39 = 117
Required standard hours = 132 hrs
Extra hours required
= 132-117 = 15hrs/wk

Available cutting m/c = 1

Cutting m/c utilisation / wk = 1 X 39 =39
Required standard hours = 41.70
Extra hours required
= 41.7039 =2.7hrs/wk
Total extra hours required = 15 + 2.7 = 17.7 hrs/wk

SOLUTIONS???

Capacity planning-spreading-2
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
= 57.02 std.hrs required
@ 90% efficiency = 57.02/ 0.9 = 63.36
operated hours.
@ 8% Absent
= 68.87operated hours

Capacity planning- cutting -2

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
@ 8% Absentism = 21.74 operated hours

Capacity planning cutting room

Spreading 68.87 hours needed over 3
machines
Cutting 21.74 hours needed.
Total operating hours = 90.61
No of operators req = 90.61 / 39 =2.32 = 3
2 operators to be released.
Can 1 operator be utilised for part of the
day?

PLANT CAPACITY
Maximum capacityTotal hours
available under normal conditions in a
given period of time
Potential capacityMaximum capacity
adjusted for efficiency
Committed capacityTotal hours
previously allocated for production
during a certain time period

PLANT CAPACITY
Available capacityDifference between
potential capacity and committed
capacity for a certain time period
Required capacitySAHs (standard
allowed hours) necessary to produce a
specified volume in a certain period of
time
Excess capacityDifference between
potential capacity and required capacity

PLANT CAPACITY
CASE STUDY
Stitch Taylor operates a small apparel
contract sewing business that employs 10
operators who work 7 hours a day. The plant
has a 90% efficiency factor.
A customer brought in an order for 6,000 units
of style A that needs a 10-day Lead time. The
plant has the appropriate equipment and skills
available to make the style.

PLANT CAPACITY
The plant has a committed capacity of 300
hours for the 10-day period. Style A has a
production time of 5 SAMs.
The order for 6,000 units requires 30,000
SAMs or 500 SAHs.
Which factors should be considered in
deciding whether to accept the order?

PLANT CAPACITY
What is the potential capacity of Stitch
Taylor's plant for the 10 working days?
630 hours
70 working hours per day x 90% efficiency
= 63 potential production hours per day 63
potential production hours per day x 10
days = 630 hours potential capacity

PLANT CAPACITY
What is the required capacity for the
order?
5 SAMs per unit x 6,000 units = 30,000
SAMs/60 minutes per hour = 500 SAHs for
the complete order
Is there adequate potential capacity for the
order? Yes
630 hours potential capacity - 500 hours
required capacity = 130 hours excess capacity

PLANT CAPACITY
What is the available capacity in the
specified time frame? 330 hours
630 hours potential capacity - 300 hours
committed capacity = 330 hours available
capacity
Is available capacity adequate to accept
the order? No
330 hours of available capacity - 500 SAHs
of required capacity = -170 SAHs

PLANT CAPACITY
What adjustments might be made to
make adequate capacity available?
1. Expedite the new order so it would have
priority over previously committed orders.
2. Require operators to work overtime to
get order completed.
3. Offer operators a bonus if the group can
average over 100% efficiency for 10 days.