Everything You Need to Know about Machine Utilization

Abby Baumann Oct 19, 2021

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.

Additionally, a world class facility runs at 80% utilizationand that takes into account breaks, lunches, machine breakdowns, setups, changeovers and more. So, it’s actually very impressive if a factory can get close to 80% utilization.

That’s why you can consider a good machine utilization rate as anything at or over 70%.

How to Track Machine Utilization

So, once you have a utilization goal, it’s important to ask yourself: how are you tracking your utilization? Do you feel confident that that process is giving you an accurate number?

After a recent Amper customer survey, we found that most manufacturers assumed their utilization was between 50-60%.

However, after implementing Amper to automatically track utilization, they found that on average, utilization was 26%

Just 26%!

However, the important thing here is that those customers were taking the first step to improving utilization. After all, you can only improve something if you’re actually measuring it in the first place.

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 ⬇).

machine utilization scoreboard
If you’re manually tracking your utilization today, check out Amper’s free  trial.

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.

Make More Informed Capex Decisions for Equipment

Have you ever won a big sale but were afraid you didn't have the capacity to run the product? Or have you had the suspicion that you needed more machines for your current workload, but didn't have a way to prove it? You can use utilization data to justify the purchase of new machines.

Improve Time to First Part/Time to Last Part

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.

These are just a few ideas, find out how our customers used utilization data to justify lights out production and improve paid labor utilization.

Getting Started with Machine Utilization

As you can see, machine utilization is an extremely important metric for manufacturers to be tracking. (Especially for any factory who has goals of tracking true OEE.) If you’re interested in learning how you can get real-time utilization data on your shop floor, check out Amper’s free trial or a request a demo today.

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