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Calculating Productivity and Efficiency

Six Sigma – iSixSigma Forums Old Forums General Calculating Productivity and Efficiency

This topic contains 19 replies, has 11 voices, and was last updated by  Surendran 9 years, 9 months ago.

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  • #46793

    jimbo
    Participant

    Looking for away to calculate productivity and efficiency. Does the following make sense:
    Productivity = # of product completed x standard / # of employees x hours paid or 8
    Efficiency = # of Product completed x standard / # of employees x hours working on product (Subtract breaks)  
    Any help would be appreciated.

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    #155103

    Rpaul
    Member

    Dont wanna assume anything so want to get this clear:
    In your formula.. what exactly do you mean by “standard”??

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    #155104

    Rpaul
    Member

    Hardly any difference between the two formulae except for the breaks.
    Productivity formula seems simple and alright. Just that I would suggest you include break times in the formula for productivty.
    However, for “Efficiency” I think you should take into account the number of defects/defectives.

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    #155113

    Vidyadhar
    Member

    Productivity = no of items produced *(std time required to produce one item)/ total time spent to produce n items
    for efficiency — you would have to first decide as to what do you want to track as efficiency… is it based on time spent to produce goods or the efficiency of the output.

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    #155115

    jimbo
    Participant

    This would be the amount of time given to complete a task, job, etc.
    Thanks
     

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    #155116

    jimbo
    Participant

    Any input on how I could include defects / defectives in the efficiency formula?

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    #155117

    Vidyadhar
    Member

    In that case you %age efficiency could be calculated as
    standard time required to complete a job/ actual time taken(productive time) which would give a value no different from productivity.
     

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    #155119

    Allthingsidiot O
    Participant

    Does Productivity  stand  for  “Effectiveness”??

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    #155123

    Vidyadhar
    Member

    Ideally that could be calculated as:
    No of non defect free items produced*(standard time)/ total time taken to produce all items.

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    #155125

    Rpaul
    Member

    Calculating efficiency from units produced and defectives. 
     
    Let Total No. of Items be:                                    N         
    Let No. of Defective Items be:                              d         
    Let Standard time to produce one item be:           t          
    Let Total time to produce N items be:                  T
               
    Now let us calculate what ratio of our production is actually usable / selleable. Let’s call it Effective Production Ratio.
     
    Let Effective Production Ratio be:                        R         
    Calculate Effective Production Ratio (R)   as         = (Total No. of Items – No. of Defective Items) / Total No. of Items
    Therfore; Effective Production Ratio (R)                = (N-d)/N          
     
     
    Productivity (P) = (Total No. of Items * Standard time to produce one item) / Total time to produce N items
                              = ( N * t ) / T
     
     
    Efficiency (E)    = Productivity * Effective Production Ratio = P * R
    = (Total No. of Items * Standard time to produce one item * Effective Production Ratio) / Total time to produce N items
                            = ( N * t * R ) / T
     
    I used the symbols to avoid making mistakes. Excuse me if the above is a little too mathematical.

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    #155128

    Vidyadhar
    Member

    R Paul,
    Thats really, good. These metrics have to be expressed as mathematical equations…
     

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    #155135

    CT
    Participant

    I copied this from http://www.oee.com, since your wanting to include defects into the equation this is the best way to accomplish your goal. More information at the web site, but I think this will help. In your other post you mentioned a standard, I assume this already takes into account breaks, normal tool changes, and adjustments?

     

    Calculating OEE
    The Formulas
    As described in World Class OEE, the OEE calculation is based on the three OEE Factors: Availability, Performance, and Quality. Here’s how each of these factors is calculated.
    Availability
    Availability takes into account Down Time Loss, and is calculated as:

     Availability = Operating Time / Planned Production Time
    Performance
    Performance takes into account Speed Loss, and is calculated as:

     Performance = Ideal Cycle Time / (Operating Time / Total Pieces)
    Ideal Cycle Time is the minimum cycle time that your process can be expected to achieve in optimal circumstances. It is sometimes called Design Cycle Time, Theoretical Cycle Time or Nameplate Capacity.Since Run Rate is the reciprocal of Cycle Time, Performance can also be calculated as:

     Performance = (Total Pieces / Operating Time) / Ideal Run Rate
    Performance is capped at 100%, to ensure that if an error is made in specifying the Ideal Cycle Time or Ideal Run Rate the effect on OEE will be limited.
    Quality
    Quality takes into account Quality Loss, and is calculated as:

     Quality = Good Pieces / Total Pieces
    OEE
    OEE takes into account all three OEE Factors, and is calculated as:

     OEE = Availability x Performance x Quality

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    #155138

    Wayne Marhelski
    Member

    CT identified a very useful tool (OEE). While this measurement is usually applied on a piece of equipment, it works just as well for a workcell, assembly line, or even a single station on an assembly line. How you use it all depends on whether you want a micro or macro perspective.
    Wayne

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    #155167

    jimbo
    Participant

    Very interesting information. I will start plugging in numbers and see what happens. Much appreciated. Thanks to everyone who replied!

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    #155298

    Ronald
    Participant

    I my experience two metrics are used:
    1. Productivity= units per paid labor hour (a measurement of labor efficiency).  This should be compared to the standard rate per labor hour.  A labor efficiency % could be calculated by dividing the two numbers.
    2. OEE has described in the previous post to determine the machine effectiveness.
    The two numbers are needed especially if you can overstaff a line and produce higher efficiency.  It also helps to guide continuous improvements in terms of downtime reduction, speed improvements, line staffing, process delays, and lean activities such cell layout, SMED, and 5S.

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    #155316

    Alderman
    Participant

    Use the K.I.S.S. Method:
    Productivity = the number of units / number of units scheduled.
    Efficiency = the standard / the time it actually took
    with the quality efficiency you would want to take the total number defectives / by the total number of units
    just my 2 cents worth.

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    #187341

    Tonny
    Member

    What means standard in your formulas ? 
    When you say hours paid do you refer to the required hours to build the number of products ccompleted ?
    Thank you!
    Tonny

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    #187345

    Mikel
    Member

    It’s a 2 1/2 year old post. Go to Lean.org and read about OEE, it is a
    real simple concept.

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    #187799

    Tonny
    Member

    I want to find a suitable formula to express productivity at my work place.I need to use in my formula the number of labours, hours spent to bild the products. Any help is apprecciated

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    #189103

    Surendran
    Member

    What is meaning of std in productivity calculatuion

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