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3 Ways to Improve Production Capacity with Minimal Costs

April 29, 2021

 by David Collins III

Factory worker focused while holding laptop at a factory

Factory managers are often under the impression that improving efficiency is the primary goal of saving money. However, we at CMC have found that in several cases, increasing production capacity should take first priority. 

Over the last year, several clients have asked CMC for assistance to rapidly scale up production rather than lowering costs. Due to the nature of their products, the companies experienced an unexpected surge in orders during the COVID-19 pandemic and weren’t able to meet demands. 

Here are three ways of achieving increased production capacity with minimal investments:

1. Analyze your Operating Inefficiencies

The most common approach to expand capacity is to increase the means of production with more people, more machinery, and more space. If two operators and one machine can produce ten products an hour, then four operators and two machines can produce twenty an hour. However, taking this approach will mean you have to hire and train new employees, set up new equipment, and integrate new operators into your existing production and supply chain systems. While this remains an effective method, it is expensive and time-consuming. 

The superior approach is to analyze your operations and remove the inefficiencies to increase capacity. Managers regularly claim the only way to increase capacity is by expanding its workforce and equipment. What they are not aware of, is the waste in their current processes should be eliminated first before increasing capacity.

2. Manage your Manufacturing Waste

Waste refers to any action or process that does not add value to the product or directly manufactures the product. Examples include bottlenecks, spray paint on the floor and not on the product, or any material that is not directly applied to the product is considered waste. 

Reducing or eliminating waste opens the capacity to increase production as existing resources can be reinvested. If your company does not need the excess capacity, then the waste reduction goes right into your company coffers.

3. Rearranging your Production Line

Factory managers often look towards the factory workers to increase capacity by increasing productivity. Yet, the inability to increase capacity is rarely the result of laziness, but rather the inefficient use of existing resources. 

Rearranging the production line or the amount of waste produced in a process increases capacity. For example, if two operators spend all their time moving raw materials, simply rearranging the processing line so the material is readily available will allow those operators to work on the product, increasing the capacity by two operators.

Case Study

One of our clients in the plastic bag manufacturing industry needed to raise production significantly without raising its costs. We found that one of the processes created a significant bottleneck that affected delivery for the entire operation. The process was cumbersome and highly manual at the time. CMC recommended that the factory automate the process and use the previous operators in another section of the factory. 

These recommendations, along with others detailed here, allowed the company to save $3m and produce $8m worth of new product.

We expect to see global demand increase as the COVID-19 pandemic subsides. When demand surges, will you be ready to increase your capacity to meet it? Let us know in the comments down below.

Looking to improve your factory's output quality while lowering costs at the same time? Click on the image below.

How To Cut Your Factory Costs Through Quality Improvement Activities eBook Download

Topics: Cost Reduction, Manufacturing Consulting, Manufacturing In China, Process Improvement

David Collins III

David Collins III

David was a Senior Strategy Consultant for Deloitte, served in Iraq as a Special Operations Civil Affairs soldier, and as a Governance Advisor to the Afghan Government with the Department of State. At CMC, David advises clients on strategy and investments.

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