In this article, you will learn how to calculate Production Output as per lean manufacturing. Depending on your type of business and manufacturing operations, the production output can be measured using different manners. The most common techniques to calculate the production output are listed below:
1. SHIFT OUTPUT DEFINITION
[Amount of Production Units/Shift]
This shift output is defined as the “quantity of goods or services produced in a given time period, by a firm, industry, or country”, whether consumed or used for further production. This kind of output includes all different techniques to measure the speed of your machines or operations in any base of time, for example, sales per minute, bottles per hour, tablets per shift, components per day, etc.
How to Calculate Shift Output:
The shift output is calculated dividing the number of units produced by the amount of time to produce them, example:
Shift Output = Units Produced / Time
2. EMPLOYEE OUTPUT DEFINITION
[Amount of Production Units/Employee Working Hours]
The employee output (also called labor productivity) is the “quantity of goods or services produced per employee”, whether consumed or used for further production. This kind of output includes all different techniques to measure the speed of your employees on a base of time.
How to Calculate Employee Output:
The employee output is calculated with the labor productivity equation: total output divided by the total input. example:
Employee Output = Total Output of Units Produced / Total Input or Employees Working Hours
For example, if your production line generated $40,000 worth of goods or services (output) utilizing 1000 labor hours of work (input). To calculate labor productivity, divide $40,000 by 1000 which equals 40. This means that your production line generates $40 per hour of work.
In conclusion, you can use different ways to determine the production output of your business and estimate how efficient and profitable it is. Keep in mind that what is not measured cannot be improved. Depending on your type of operations you may select from many other formulas to calculate the production output according to lean manufacturing. So, select the best tool and manner to score the output of your business to start improving it.
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REFERENCES: How to Calculate Production Output.