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Q & A: Calculating Efficiency

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Q:
If a machining operation has a run-time standard of say, one hour per hundred parts produced and a setup time of also one hour, in order to calculate the efficiency for say, a work order of one thousand parts, should both the setup time and the run time be divided by one hundred (to get it down to one part) and then multiplied by one thousand to determine what the standard, expressed as a percent, should be for that particular work order? Or should the setup time be kept apart from the run-time (since the setup time will be the same no matter what the size of the work order)and remain at one hour and then added to the result of the calculation for the run-time standard? Thank you. Lee
- Lee
Steel Products, Marion, Iowa, U.S.
A:
Lee -

It depends on how you're looking at it. If you're trying to figure out the production rate once you've started running, it would simply be 100 parts per hour (or 1/100 = 0.010 hours per part). But if you want to know the production rate for a particular order, you need to know the total number of parts being produced (1000, in your example) and the total amount of time it would take to make them (1 hour setup + 10 hours run-time = 11 hours total). So the production rate for that particular order would be 1000 parts / 11 hours = 90.9 parts per hour. (Or 1/90.9 = 0.011 hours per part).

To figure this out in percent, you first have to know what the maximum possible is. In this case, we can say that the highest concievable rate of production would be 100 parts per hour. So we just divide the particular rate of production by this (and multiply by 100%) to get the percent efficiency for that particular order:

(90.9 parts/hr) / (100 parts/hr) * 100% = 90.9% efficiency

OR...

(parts/hr produced) / (max. parts/hr possible) * 100%

One thing that I think is interesting to notice is that because of your one hour set-up time, your percent efficiency will get higher and higher as the size of your order increases. Take, for example, orders of 100 parts, 1000 parts, and 10,000 parts:

For 100 parts, it will take 1 hour to setup and 1 hour to run, so the rate of production is 100 parts / 2 hours, or 50 parts per hour. So the efficiency is:

(50 parts/hr) / (100 parts/hr) * 100% = 50% efficiency

We already figured out that for 1000 parts, it's 90.9% efficiency.

And for 10,000 parts, it takes 1 hour to setup and 100 hours to run, so the rate of production is 10,000 parts / 101 hours, or 99 parts per hour. So we get:

(99 parts/hr) / (100 parts/hr) * 100% = 99% efficiency

And all together:
100 parts: 50% efficiency
1000 parts: 91% efficiency
10,000 parts: 99% efficiency

I hope this helps to answer your question!

-Tamara

(republished on 07/18/06)

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