Throughput, Bottlenecks, and Capacity: It’s All in the TPCBP

One of the most under-appreciated items in the Lean tool bag is the Table of Production Capacity by Process (TPCBP, also known as Process Capacity Table). This one-pager can define the theoretical maximum output of any process by taking into account manual time, cycle time, changeover time, etc.
The formula for capacity is simple, and intuitive once it is understood. Yet in a similar fashion to one-piece flow and takt time, there is something that seems counterintuitive or ‘backwards’ about it at first to most people. To review, the formula for capacity can be expressed as:
Capacity = Net Available Time / Time per Piece
where Net Available Time is time available per shift minus planned breaks and lunches, and Time per Piece is the sum of Manual Time + Auto Time + Changeover Time per piece.
The numerator (top of the line) units are seconds, and the denominator units are seconds per piece, so when seconds cancel out you end up with pieces. In other words
Capacity = Net Available Time / (Man. Time + Auto. Time) + (Changeover Time / Pieces to changeover)
This is a highly logical, fact-based way of determining the capacity of a process. For whatever reason, this is not the way most traditional companies do it.
Take the recent example of a transportation equipment manufacturer located int he mid-west U.S. The truck business has been booming in 2004, and demand has outstripped capacity by 20% or more. The company needs more throughput in order to satisfy customer demand.
Their Lean Manager, who has some TOC background, was poring over data looking for the bottlenecks so that we could target kaizen activity in the right areas. This proved tricky as on different days there were problems with material shortages, poor quality of incoming materials, absenteeism, etc. All ripe areas for kaizen. But where to start?
One of the larger constraints appeared to be at the presses. This department was under producing by 1,000 or more as compared to the best days in the assembly department (when all people and materials were available). Could we get more production out of the presses? Of course! But how much? Would it be enough or was it necessary to buy new equipment?
When asked “How many more could you produce on a perfect day?” they didn’t know. As far as the press shop was concerned, they were doing pretty good already. The closest this company could get to theoretical capacity was “On a good day, we can make up to 8,500 at our bottleneck process.”
Of course there were the die changes, but those were “under control”. In a word, no one had done the math all the way through, using the above formula. Too busy managing the day do day. When we went to the floor, collected the data, and the math was done, the theoretical capacity of the process was nearly double what they had thought. This opened people’s eyes and pointed to many areas for kaizen.
Go to Gemba, get the facts.