As an organization begins its lean journey, improvements are expected to free up capacities such as machines, people, and space. That said, freed up resources are only useful if they can be accounted for, utilized to improve the business, and effectively communicated.
Box scores are a powerful tool for effectively tracking and communicating the positive impacts of continuous improvement efforts, such as freed capacity that can be reallocated to other value-added activities.
Figure 1. Capacity Box Scores Table
Figure 1. illustrates a typical box score table for tracking operational, capacity, and financial measures. Note that there is a column for the current state on the left and the future state on the right. While there are only three columns between the current state and future state columns in this example, there can actually be any number of columns for the various periods between the two states.
Because capacity is the link between operations and finance, capacity measures are located between the operational and financial section rows. Note in Figure 1 that only overall capacity is accounted for. In practice, capacity would be sub-categorized.
In the following example illustrated in Figure 2. we see employee and machine capacity for two periods (September and October). You can also see the target capacity of the future state of December 31st.
Figure 2. Capacity Box Scores
It’s important to note that capacity management need not only be limited to employee and machine time. Tracking the percentage of facility capacity used by a specific value stream or support function can also help guide an organization’s decision making and reveal huge areas for improvements, such as in the area of inventory management.
Figure 3. Value Stream Capacity
9 Step Box Score Decision Process
A 9-step process is a powerful tool for determining where to focus improvement efforts.
- Step 1. Acquire Period Data
Before we can improve, we must know what we’re improving. As such, our first step is to collect relevant data for each work area. Keep in mind that these metrics will be used in a later step to calculate capacity. On that note, a few metrics worth considering include average cycle time, units produced, and scrap rate.
|Common Capacity Metrics
- Staff size
- Idle time
- Working hours
- Working days
- Total units produced
- Average employee cycle time
- Average batch setup time
- Rework rate
- Scrap rate
- Average batch size
- Average inspection time
Next, using data collected, we must calculate the total available time, productive capacity time, and finally the productive capacity percent. We’ll tackle each of those measures over the next 3 steps.
- Step 2. Calculate Productive Capacity
Once we have data, we must calculate our productive capacity. To calculate productive capacity, first, we must quantify our total available time in terms of minutes, during a distinct period such as a month. Thus, our total available time for the month is equivalent to September’s total man-hours.
- Total Available Time = Daily Shifts x Workers per Shift x Shift Work Hours x 60
- Productive Capacity Time = Total Processed Units (including any rework) X Average Employee Cycle Time Seconds X Workers per Shift X [1 – (Scrap Rate + Rework Rate)] / 60
- Productive Capacity % = Productive Capacity Time / Total Available Time
In the example, work cell B has 126,000 minutes of available time and 83,300 minutes of productive capacity or about 66.1% productive capacity.
- Total Available Time = 2 Shifts x 7 Workers x 7.5 Production Hours x 60 = 126,000 minutes
- Productive Capacity Time = Total Units 85,000 X Avg Worker Cycle Time 12 7 Workers X [1 – (10% Scrap Rate + 20% Rework Rate)] / 60 = 83,300
- Productive Capacity % = 83,300 / 126,000 = 66.1%
- Step 3. Calculate Non-Productive Capacity
Next, we must calculate the non-productive capacity. To start, we must quantify the total amount of non-productive (i.e. set-up time, rework time, scrap time, inspection time, etc.).
- Total Available Time = Sum of all time not directly related error-free production (i.e. all time related to activities our customers aren’t willing to pay us for, such as maintenance, training, and meetings.)
- Non-Productive Capacity Percent = Non-Productive Time / Total Available Time
- Step 4. Calculate Available Capacity
After calculating productive and non-productive capacity, next, we calculate the available capacity.
- Available Capacity Time = Total Available Time – (Productive Time + Non-Productive Time)
- Available Capacity Percent = 1 – (Productive Capacity % + Non-Productive Capacity %)
Figure 4 illustrates a summary of the capacity measures for three distinct work cells.