The Importance of Efficiency Manufacturing Metrics in Improving Production Output
Efficiency Manufacturing Metrics and Production Optimization
Three months ago, the new operations manager at Acme Fastener and Tool's manufacturing plant implemented a system for measuring the total volume of output each week. He discovered that the plant's weekly capacity was averaging about 83%, which he would like to raise to closer to 90%. What type of metric is this manager concerned with at the moment?
- a. Efficiency manufacturing
- b. Quality manufacturing
- c. Inventory
- d. Costs and profitability
Final answer:
The operations manager at Acme Fastener and Tool is focusing on the efficiency manufacturing metric known as capacity factor, aiming to optimize output to reach 90% of the factory's weekly capacity and improve costs and profitability through economies of scale.
Therefore the correct answer is: a. Efficiency manufacturing
Explanation:
The operations manager at Acme Fastener and Tool's manufacturing plant is primarily concerned with a type of metric referred to as capacity factor. This metric measures the ratio of actual production over a period of time to the peak possible production.
In this context, the manager is noting that the factory's weekly output averages around 83% of its capacity and aims to increase this to 90%. This concern is linked closely with the concept of efficiency manufacturing, which is about optimizing the use of resources to maximize output and minimize waste, thereby increasing productive efficiency.
By improving this measurement, the manager is effectively looking to get more product out of the existing capacity, which is often a more cost-effective alternative to increasing capacity through capital expansions.
This endeavor ties back to the principles of economies of scale, where as production increases, the cost per unit should decrease, further improving overall costs and profitability.