Optimizing Manufacturing Capacity: Boosting Yield & Reducing Costs With Total Processing Management

Michael Greene
Continuous Improvement Coach at SafetyChain

In the intricate world of manufacturing, where precision and efficiency are paramount, capacity planning stands as a pivotal tool wielded by plant managers to navigate the complex landscape of production. Total Processing Management is a proactive approach that helps operations professionals leverage this tool correctly. 

The overarching goal is always the same: to meet or exceed target delivery metrics while keeping a tight rein on the profit and loss (P&L) statement. However, as any seasoned manufacturing professional knows, the path to achieving these objectives is riddled with challenges and trade-offs.

In this blog:

  1. The Importance of Capacity Planning in Manufacturing

  2. How TPM Can Improve Manufacturing Yield

  3. How to Implement a TPM-Based Capacity Planning Strategy

  4. Achieving Operational Excellence with TPM

The Importance of Capacity Planning in Manufacturing

One common conundrum faced by plant managers is how to respond effectively to production volume surges, whether they’re caused by unexpected spikes in customer orders or seasonal fluctuations in demand. The knee-jerk reaction typically involves resorting to overtime or bolstering the workforce through additional shifts. While these measures might provide temporary relief, they often come with hefty price tags. Overtime payments and increased labor costs can quickly eat into profit margins, and the time-consuming process of ramping up staffing levels may result in missed delivery deadlines. This reactive approach, driven by the immediate need to meet output quotas, can be myopic, failing to address the fundamental issue at hand: understanding and optimizing the plant's true capacity.

Total Process Manufacturing (TPM) serves as a prime example of how a proactive approach to capacity planning can drive efficiency. TPM is a comprehensive methodology that seeks to maximize production by minimizing losses and waste at every stage of the manufacturing process. It goes beyond simply keeping machines running; it's about ensuring that every minute of production time is optimized. For instance, TPM emphasizes proactive machine maintenance to prevent breakdowns, reducing unplanned downtime and increasing availability.

The critical, and often underestimated, first step in effective capacity planning is to accurately calculate the capacity of a specific value stream within the manufacturing process. Traditionally, many have relied on a simplistic output metric, such as the claim that a production line operates at 98% capacity throughout a shift. While this figure might instill a sense of confidence in output levels, it can be a misleading indicator. The consequence of this misperception can ripple through the entire production ecosystem, as it doesn’t provide a complete picture, leading to significant costs in terms of production scheduling, maintenance, and overtime demand.

How TPM Can Improve Manufacturing Yield

Bucketing losses, an integral component of Lean manufacturing principles, exemplifies how scrutinizing the finer points of production can enhance efficiency. By categorizing and quantifying losses, such as setup time, equipment breakdowns, or defects, manufacturers can pinpoint areas where improvements are most needed. This granular analysis allows for targeted interventions, whether it's reducing setup times through standardized procedures or implementing quality control measures to minimize defects. The cumulative effect of these improvements can be substantial, leading to increased performance and quality while curbing costs.

How to Implement a TPM-Based Capacity Planning Strategy

To gain a more precise and comprehensive understanding of a manufacturing plant's capacity, it's essential to deconstruct the concept into its constituent elements. Line performance, which measures the ratio of actual run time to planned production time, provides valuable insights into how efficiently a production line is operating. This metric serves as a foundational piece of the capacity puzzle. But it's not enough on its own. Availability offers a more holistic perspective, shedding light on the overall machine capability spectrum. Plant managers looking to optimize their operations must scrutinize these metrics carefully.

However, capacity planning isn't solely about measuring and maximizing the time machines are running; it must encompass the quality of production. The ultimate benchmark for a manufacturing plant's performance is Overall Equipment Effectiveness (OEE), a three-part metric that incorporates Availability, Performance, and Quality. While improving line performance by 10% may seem like a significant achievement, it's essential to assess its impact on the quality of the end product. If, in the pursuit of increased performance, quality has suffered a 15% decrease, the gain may be illusory. This underscores the importance of taking a holistic approach to capacity planning.

Achieving Operational Excellence with TPM

In today's hyper-competitive manufacturing landscape, where even a fractional improvement can make a substantial difference, a comprehensive capacity planning strategy is the key to not only increasing yield but also reducing costs. This involves scrutinizing every facet of production, from machine availability and performance to the quality of the output. By doing so, plant managers can make informed decisions that drive efficiency, bolster competitiveness, and ultimately steer their manufacturing facilities towards sustained success in an ever-evolving industry. Total Process Manufacturing and the practice of bucketing losses exemplify the power of proactive, detail-oriented strategies in this journey towards operational excellence.

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About the author: Michael Greene is a Continuous Improvement Coach at SafetyChain, and is a highly accomplished Supply Chain and Operations professional with a wealth of experience across multiple manufacturing industries. As a recognized leader in pharmaceuticals, injection mold plastics, and food and beverage, his expertise in logistics strategy has enabled manufacturers to optimize supply chain operations for the last 15 years.