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Capacity Utilization in a BPO(Non-Voice)

Six Sigma – iSixSigma Forums Old Forums General Capacity Utilization in a BPO(Non-Voice)

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  • #37582

    Chanda
    Participant

    Hi!
    In my company a product is outsourced to India.The same is processed by team A, reviewed by team B and finally by team C before shipment.Employees work minimum 8 hrs per day and 5 days in a week .This includes tea ,lunch break etc.Sometimes they work more than 8 hrs.My COO has asked me to calculate % capacity utilization of employees. I don’t have any logical clue.Please help.

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    #110907

    murali
    Participant

    Chanda,
    Step1. Find out the standard time used per unit (a+b+c)… Lets say 2 hours
    Step2. Find out actual time used = lets say 100 hours
    Step3. Standard unit = (100/2=50 units should have been processed)
    Step4. Find out actual units processed  = lets say 40 units
    Step5. Capacity utilized = (40/50)*100 =80%
    Capacity utilization formula = (Actual/planned)*100
    Good luck
     
     
     

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    #111320

    Manjusha
    Participant

    Capacity  or Agent utilization = login hours -break time/paid hours.

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    #111322

    BG
    Participant

    Well interesting enough I would hazard that throughput would be your target as you have A,B and C in the process loop.  If you set metrics for each of those groups and define what a defect is, i.e. incomplete customs documentation or invoicing or picking order errors, you can provide a percentage of error or rework (always costly) i.e. if 100% is the target and  98% is the achieved in A, 95% in B and 90% in C then you have a 83.79% sequential throughput on your process (or efficiency rating) I use the six sigma calculator and calculate how many defects over PPM occur

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    #111326

    jediblackbelt
    Participant

    Chanda –
    The way I have always done utilization is a little crossed from the other responses.  It looks like one gave you efficiency, the other gave you utilization and the third gave you what looks to be rolled throughput yield.
    The way I have always seen and done utilization is work hours / clocked hours on job.  So if you worked 6 hours on the job and clocked in for 8 the utilization was 6/8=75%.
    If you want to find productivity out for the operation you multiply utilization and efficiency.  You calculate efficiency by finding your standard hours for a job multiply by pieces produced.  Take that combination and divide by manhours used.  So if your standard is 1 minute and you made 480 pieces you have 480 standard minutes.  If you used 2 people for 8 hours you now have 2*8*60 man-minutes or 960 man-minutes.  So you take 480/960 = 50% efficiency. 
    For productivity you take the efficiency and multiply by utilization.  So 50% * 75% = 37.5%.
    Hope this helps. 

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    #111329

    Yadav
    Participant

    Hi
    The requirement given by ur COO is to find the current capacity utilization. In this case the resource is ur manhours.
    You may have to find out if there are any other resources that contribute to your final product like any eqpmt etc.
    I would liek to recommend the following process :
    1. Capacity utilization = Manhours available(excluding breaks) / products made.
    Note: The manpowers availability should be at actuals i.e. actual manpower available for that particular day. So you may collect the data for manpower present for each shift and find the capacity utilization for your process. You may go in further depth by find the capacity utilization for process A, B & C independently. This will give u further insight on how your utilization is distributed across differnt process steps. Also, you may identify which is the bottleneck process for improving ur final utlization.
    Hope this helps.
     
     

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    #146504

    Ramesh Chandra Mandal
    Participant

    Hi Chanda,
                   This is Ramesh requesting you to consider my willingness to work with you.
    Thanks and regards
    Ramesh
               

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    #165299

    abhijit
    Participant

    Hi,
    I saw all your calculations regarding Capacity Utilization, but I have a question in mind regarding the same. What if my human resources remain unutilized due to no work available to them or system downtime or I have some people engaged in training, then how would we go about calculating the Capacity Utilization.
    Regards,
    Abhijit

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    #167657

    narayanan
    Member

    Hi,
    In that case, the billable and non billable becomes an issue. If the employers are not occupied without any work, we should find out the status of the project like is it in pipeline, or pilot phase and so on.
    sathya

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    #167739

    Abhijit Saha
    Participant

    Hi,
    Capacity Utilization is always calculated on the contractual headcount, no shrinkage is allowed.
    Abhijit

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