In manufacturing, time is money. There are costs that a factory must pay, simply to be in business—whether you're making a product or not—labor, rent, utilities, raw material, etc. If you're not offsetting those costs by producing parts to be sold, you're losing it. This is why machine utilization is so important.
What is machine utilization?
Machine utilization is pretty simple. It’s essentially: actual time a machine is in operation over a specific time period divided by the total number of available hours in that same time period (x 100).
How to calculate machine utilization
Calculating machine utilization requires you to know how many available hours you have. To get the total number of available hours, you must look at how many hours a machine is supposed to or is available to run.
Example: A machine that is scheduled to run 16 hours a day (over 2 shifts) for 6 days a week is available 96 hours a week.
So, if a machine runs for 68 hours in a given week, it would have a utilization rate of 71%.
(68 hours/96 hours) x 100 = 71
What is a good machine utilization rate?
Utilization cannot exceed 100%. Why?
Well, think about it. It's mathematically impossible for a machine to be up and running more than the available time.
Plus, while some automated machines are capable of running at 100%, most manufacturers have machines that require human intervention. That’s why your utilization goals should never be set at 100%. You simply can’t expect that from your machines or operators.
And it probably goes without saying, but it is even more important to be tracking machine utilization in real-time. Even more so, if you give operators a utilization goal to reach, you should empower them with the tools to hit that goal.
That’s why using visual management tools on the factory floor are so important, things like dashboards or in the case with Amper, our Scoreboards feature (check it out below ⬇).
What to do with your Machine Utilization Data
By now we’ve established that having access to real-time utilization data is essential. But what can you actually do with the data once you start measuring it? We’ve outlined just a few ideas below.
Improve Sales & Make Better Supply Chain Decisions
Generally speaking, production data won't help you "sell" more products. But, it could be used to make more informed decisions around sales and what products you run in your plant.
To maximize uptime and profit margins, you want to avoid unnecessary late starts and early stops of your equipment. With real-time utilization data, you can measure these late starts and early stops to see, on average, how much time you are losing each week, month and year.