Calculating Manufacturing efficiencies



Hello again everyone,

The company that I work for is really bad at monitoring and tracking, reporting and acting. I swear they are not more sophisticated than to wet the tip of their fingure and hold in the wind to which way it is blowing.

I would like to start them on watching how efficiently they are or aren't running their manufacturing processes. I have never calculated efficiencies, but I have an idea of some of the variables. Can someone explain to how they calculate and that may help to get me started. I do track spc data and run calcualtion for capabilities (as some may recognize me from other postings), but have never done this.



Bean Counting

Since accounting is what's it's ultimately about, departmental efficiency is simply this:

Standard Direct Hours Earned / Actual Direct Hours Worked,

expressed as a percent.

e.g.: all stations withing a given dept: (paint, door assembly, machining, etc) direct hours earned= 14,499. actual direct hours worked is 13,513. efficiency for Assy Dept= 107.3%. Good !

Anything 100% or above is good. Below means too many direct hours are being spent compared to the standard (i.e. waste, OT, etc.)

Hope this help ! Anyone else ? :bigwave:

Rick Goodson


Well, it depends on how you define efficiencies. Efficiency is usually a measure of performance against a standard, typically labor hours. You determine the time it takes to do an operation and then measure actual performance against the standard resulting in a percentage. Any good industrial accountant knows how to do this. However, if you are interested in measures of quality you could measure first pass yield. In essence, if you start 100 units down a product line how many make it to the end without having to be "fixed" in route. What does your organization make and what type of processes do you use to do it?



I am after more of a O.E.E. calculation.

You know amount of down-time, scrap. etc. factored as variable for OEE.

Without reading a ton of material and attending hours of seminars, I was hoping to shortcut and see what other companies are doing successfully.
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