What is the formula for throughput time?

By Claude Archambault - April 15, 2020

Throughput rates are an important measure of factory performance. Not only does throughput indicate whether the factory can meet customer demand, but it also demonstrates overall plant efficiency. From supporting decisions to adding resources to showing the plant effectiveness for generating revenues, throughput helps managers remain competitive.

Today, the COVID-19 virus outbreak has created an unprecedented increase in consumer demand, emptied grocery store shelves, and put extreme pressure on food processors to ramp up production. Increasing throughput is key to meeting today’s outbreak-related challenges.  

For production managers, analyzing OEE and its components offers insight into where in the production process throughput is being constrained. With Worximity’s Smart Factory analytics, OEE and other KPIs reveal where process choke points are slowing throughput. Once these constraining steps are identified, managers can develop improvements and increase production volumes. At Worximity, we are ready to help. Our Customer Success Advisor is available to answer your questions and assist in any way they can. 

How to Calculate Throughput Rates

To improve throughput, first understand the required calculations and what the values represent. The overall concept is not difficult, but it is important to distinguish between throughput for a line or process and throughput for an entire plant. 

Process or Machine Throughput

Process throughput is the number of good units produced through a process (by a machine) from beginning to end over a specific period of time. For example, if we are manufacturing right-handed widgets and a step in the process is a bending operation, we might be interested in the throughput of the bending machine.  

The calculation is: Throughput = total good units produced / time

In this case, the number of good units takes into account losses and rejects. Other factors that can affect the volume of good production include downtime, machine speed, lack of raw material, operator error, and lack of operator training. Thus, for an eight-hour shift, if 850 straight widgets were fed into the bending operation but only 800 good units were produced, the throughput rate would be 800 units per eight hours or 100 units per hour.

Line or Factory Throughput

Line or factory throughput is also expressed in terms of good units per unit of time. However, calculating line throughput requires taking into consideration the relative production efficiencies of each machine along the line. If the process line consisted of three operations, Operations A, B, and C, running at A = 90 percent, B = 93 percent, and C = 92 percent individual efficiencies, the total line efficiency will be:

Line efficiency = .90 x .93 x .92 = .77 or 77 percent efficiency for the line itself

Further, because each operation is linked to the others, the throughput rate of the line is ”controlled” by the throughput of the slowest or constraining machine. So if the actual throughput of the three machines is 90, 110, and 100 widgets per hour, to calculate the throughput of the line, we would multiply the line efficiency (77 percent) by the throughput of the constraining operation (90 pieces per hour).

Line throughput = 90 pieces per hour x .77 = 69 pieces per hour

Implications

Focusing on the efficiencies of individual operations may be misleading because only the line throughput can tell if customer demand can be satisfied. A 93 percent efficiency for operation B (above) seems excellent until the total line throughput is calculated.

This means that to increase the throughput of the entire line (or factory), improvement efforts must be directed at the constraining operation (operation A in this example). Throughput improvements for operations B and C would not translate into increased throughput because operation A would constrain them.  

How to Set Benchmarks

A good approach when evaluating line or process performance is to benchmark against other manufacturers for the same or similar processes. Using performance data from best-in-class manufacturers can help establish company goals. One source for locating multi-industry data is the APQC's (American Productivity and Quality Center) Open Standards Benchmarking program and its Manufacturing Tune-Up Diagnostic. Data collected by this organization is compiled by process type and industry to be used as a basis for comparing performance. 

How Worximity Can Help Improve Throughput Rates

Worximity's Smart Factory analytics software provides the right kind of real-time data that managers need to improve throughput. First, for a process or factory, the constraining operation should be identified. Then, Worximity's performance monitoring data can be used to identify opportunities for improvement and implement those improvements. 

One company that realized the benefits of Worximity's system is Voltigeurs Farm, a leading poultry processor. The company achieved a 43 percent increase in productivity over three years, along with an increase of 90,000 units processed per month using Worximity's performance monitoring software and TileBoard data displays.

According to Jocelyn Delisle, production director at Voltigeurs Farm,

"With TileBoard, we can monitor our production better and react swiftly. This way, we minimize our losses and increase production speed."

Throughput is one of a company's most important performance measures. It tells you whether or not you can meet customer demand and whether process lines are performing at top levels, and it demonstrates the capacity to expand markets. To improve your factory's throughput and line performance, contact the sales team at Worximity. Schedule a demo to see what we can do for you.

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