Understanding System Efficiencies: Operational, Labor, and Throughput

Understanding System Efficiencies: Operational, Labor, and Throughput

In the Garment IO system, we classify efficiencies into three main categories:

  • Operational Efficiency
  • Labor Efficiency
  • Throughput Efficiency

Understanding these categories can help you use our system more effectively and leverage its capabilities to increase your productivity, optimize your operations, and improve the quality of your products.

Glossary:

Production Time: This refers to the estimated duration required to complete the manufactured items. It is calculated by multiplying the quantity of items by the SAM duration of the processes within that particular style.

Available Time: This is the total time the employees can work in, calculated after excluding all idle time, maintenance periods, and breaks.

Idle Time: This is the cumulative duration of all approved idle requests.

Maintenance Time: This refers to the cumulative duration of all approved maintenance requests.

Utilized Available Time: This is the total time available to employees who were utilized. In other words, we exclude unutilized employees of the total available time to have only available time of the utilized employees. 

Paid Time: This is the total time for which employees are compensated by the factory, and it includes available time, idle time, and maintenance time. The only time that is excluded is break time.

Throughput Time: This is calculated by multiplying the throughput quantity of the scope by the estimated time required to finish within that scope.

You can also check this article Understanding Different Times for more details about the different times in Garment IO system. 

Labor Efficiency

Labor efficiency, formerly known as production efficiency, is the efficiency of the production time of the workers divided by the net time spent by the employee. The net time excludes maintenance, idle, and unutilized time. As such, you will always have a higher labor efficiency than operational efficiency because labor is not responsible for mismanagement that leads to idle time, maintenance, or unutilized employees. However, wasted time is included in the equation, as labor is responsible for the time wasted at the start and end of the day.

Labor Efficiency = Production Time / Utilized Available Time

Operational Efficiency

Previously known as gross efficiency, operational efficiency is calculated as the production time divided by the total time spent by all employees in the factory. This includes time spent idle, on maintenance, or unutilized. Hence, it truly reflects the gross efficiency of the operations.

Operational Efficiency = Production Time / Paid Time

Throughput Efficiency

Throughput efficiency measures the efficiency of completing a piece through all its processes. It's important to note that throughput efficiency can be calculated at different scopes: the whole factory, a certain line, a certain section, or even a certain process. The production time of the fully produced pieces is divided by the total time spent in the factory.

Throughput Efficiency = Throughput Time / Paid Time


How to improve the numbers?

  • Improving Operational Efficiency: You can monitor operational efficiency to identify periods where your workers aren't fully utilized. If operational efficiency is low, there may be long periods of downtime or underutilized workers. You can use this information to revisit your scheduling or processes to better utilize your workers.
  • Improving Labor Efficiency: If labor efficiency is low, your workers might be spending a lot of time on non-productive activities. You can monitor these metrics to identify if there's a problem with the process or if your workers need more training.
  • Improving Production Efficiency: If production efficiency is low, there may be bottlenecks in the production process that prevent pieces from being completed entirely. You can monitor these metrics to identify where the bottlenecks are and work to resolve them.

Conclusion

Understanding and monitoring these metrics can help you improve your operations and increase productivity and quality. Start checking your efficiencies in your system today to enhance your operations.

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