Capacity utilization

Capacity ( eng. " capacity" ) is in economics and business administration, the maximum of the production process in a given period available number of personnel, equipment, tools and spaces.

• 3.1 adjustment
• 3.2 elimination

General

Since economics and business administration different objects of knowledge have as their object, the definition of capacity is down different. The only commonality in both disciplines is the maximum efficiency of production factors per unit of time. The economics here is primarily concerned with questions about production potential and bottleneck sectors that can limit the gross domestic product and capacity utilization. Otherwise, it takes under a aggregation back to the individual operational capacities, which provides the business administration.

Business management

The capacity depends on constant intensity of two components, the existing factors of production and the period in which they are used. It is the result of the interaction of operational production factors capital, labor and organization. If the period in which factors of production are used, shortened ( eg by reduction of working time ), then reduce the capacity and vice versa. A capacitance measurement for the purpose of selected long period shows capacity fluctuations rather than a short one.

While the capacity reflects the maximum possible quantity production, capacity utilization ( output quantity ) makes statements about the actual quantity produced in relation to the maximum possible amount. Accordingly, the capacity utilization rate is ( or shortly utilization rate ) of the percentage to which the capacity, adopted by 100 % is actually used. The intensity gives information about whether technical possibilities (increase of output per unit of time) or time options ( introduction of shift work), the capacity can be increased. To measure capacity, therefore, the intensity must remain constant.

Species

The Business Administration describes a variety of types of capacity. Erich Gutenberg and Konrad Mellerowicz have dealt mainly with the qualitative and quantitative capacity, but a number of other species will also be discussed. According to factors of production, one can distinguish between the work or staff capacity and machine capacity. Since, moreover, also operating capital, whether in the form of equity or debt, is available only to a limited, one can also speak of a financial capacity. Gutenberg looks according to a drawing on the financial capacity for investment. If that is not equity and debt available, may not be necessary machine investments made ​​so that the financial sector is a bottleneck.

Other types:

• Quantitative Capacity: maximum achievable output quantity at constant intensities within a certain time period. Quantity limitation: Maximum capacity is technically possible production quantity due to the given technical data of individual resources, without taking into account economic aspects; before reaching the technical capacity unit costs increase disproportionately. Many resources have a minimum technical capacity. They are only able to work if they perform a certain lower limit. Their function security decreases or is even not guaranteed if this minimum capacity is not exceeded. So at least two tugs are required for certain seagoing vessels. The optimum capacity is usually between the minimum and maximum capacity and identifies the output quantity at which a resource has the highest efficiency and thus operates most cost effective. It is specifically to the production capacity of a plant at the optimum cost point with the lowest unit costs. The profit-maximizing output capacity is that quantity at which marginal cost is the same as the price takers with at a given market price.
• Experiential production: average and normal capacity. In normal capacity, the average capacity utilization of the past will be used.
• Performance evaluation: technical and economic capacity. With the economic minimum capacity of an economic minimum load is connected because of falling below this minimum capacity use is uneconomical.

• Feasible or available capacity: results from the consideration of personnel ( staff turnover, sick leave) and machine ( maintenance, faults) downtime.

Determining the capacity

For a single production machine production capacity can be readily determined. The technical data of the manufacturer about the technically possible output of a machine I was limited in the 8 -hour operation on 9600 production units without causing technical errors. This means that this machine can produce 20 pieces per minute; This is the technical maximum capacity. Of these maintenance / disorders, work breaks, and debugging of the software are to be deducted, so that a technical maximum capacity of 15 pieces / minute remains. However, it is not opportune due to the stronger technical wear to exploit this technical maximum capacity over time. Rather, it is assumed on the basis of operational experience with other machines of this type, the realistic economic maximum capacity at 12 units per minute ( ie 80 % of the technical maximum capacity) is located. The produced 12 pieces / minute are then automatically transported to a further-processing machine other type II, the economic maximum capacity, however, is only about 10 pieces / minute. Then there is a bottleneck sector, which also limits the maximum economic capacity of the machine I to 10 pieces / minute, if it makes no sense to store the surplus production of the machine I.

Capacity bottleneck

The bottleneck (English bottleneck, "bottleneck ") is a stagnation in the production process, which occurs due to capacity shortages. A bottleneck arises in the production process when the waiting part capacities are not sufficient to meet the production requirements. The possible utilization of production capacity will exceed the available capacity. Capacity constraints can occur frequently in business; the elimination of a bottleneck brings the occurrence of other bottlenecks with it. It therefore did not matter to eliminate all bottlenecks, but they coordinated. This is the purpose of the constraint-based scheduling. The bottleneck determines the maximum possible utilization per unit of time, it limits the performance of the whole chain. The total capacity of the sector with the smallest capacity - the bottleneck - limited. Sectors where bottlenecks occur, called minimum sector. The bottleneck of the minimum sector limits the overall operational capacity. From the minimum sector comes from an operational performance impairing effect, it is essential to reduce by constraint-based scheduling. The aim of the constraint-based scheduling is to optimize the production flow. Companies with standardized mass products require a different kind of constraint-based scheduling than those with job-related or order production.

Adaptation

Companies can change their capacity constraints through various forms of adaptation:

• Moderate intensity adjustment: Production processes are accelerated ( line speed, shift work );
• Temporal adjustment: introduction of overtime, short-time work;
• Quantitative adjustment by quantitative increase of production factors. selective adaptation by elimination of the less good workers and machines.

Capacity increases require financial investment in machinery and personnel and are usually only in the medium term capacity utilization.

Elimination

Strategies to eliminate bottlenecks are

• The staff: overtime, Springer, time work, shift work;
• In products (procurement and sales ): Warehouse;
• In machines: production supervision and temporal target values ​​for individual production steps.

Capacity terms

Overcapacity is an excessive compared to the sales opportunities capacitance that causes impaired profitability and may eventually lead to a corporate crisis. Economic surplus capacity may trigger a crisis and depression. Idle capacities are not auslastbare parts of capacities as they may arise in particular by about bottlenecks or excess capacity. Due to the economic maximum capacity of the machine II arises in the example an empty capacity of 2 pieces / minute, corresponding fixed hot idle capacity costs. With the capacity created are fixed costs associated (time wage labor, machine depreciation, interest on borrowings ) incurred even without production. These costs are also called standby costs less than proportionally decrease with a decrease in employment ( residual costs ). The higher the proportion of fixed costs in total costs is ( fixed cost businesses such as airlines ), the higher the existing capacity must be utilized in order to reach the break -even point. Utilization capacities are according to the part of the capacity which is utilized. Capacity vote or capacity balance is the balance of the available capacity with the capacity requirements (see resource requirements ).

Economics

While the operational production potential is mostly determined relatively reliable, as it is usually defined technically, the calculation of an economic production potential created extremely difficult because the scan can not determine when the full utilization of all factors of production is achieved. Production potential is equal to the production capacity ( total economic output ) of an economy with normal employment of all the economic factors of production. The Advisory Council provides a normal utilization of the production potential then as given, if the existing factors of production are utilized to 96.75 %. In its annual report for 2003/2004 described the Council of Experts, what is meant by economic growth, namely a long-term development of the gross domestic product at full or at least normal utilization of full capacity, ie, the change in potential output. The lower the potential growth is, the more likely pushes a recovery to existing capacity limits. " The degree of utilization of production capacity can be regarded as a measure of the economic situation of the industry par excellence " Then the word of the economy ultimately describes the condition of the capacity level of aggregate production capacity. Capacity utilization is one of the general economic indicators. The data on capacity utilization ( "capacity use Secure ", in percent of full capacity ) of the industry in the European Monetary Union are charged by the European Commission in the framework of harmonized business and consumer surveys on a quarterly basis in the European Union. The capacity utilization rate is in this case given by the economic research institutes in% of potential output.

Against this background, some empirical figures show the capacity situation of the German economy. The loss of capacity of the German economy during the Second World War lay in the three western zones in 1948 only 15.4 % of capacity in 1936, of which 8.1 % was attributable to war damage and 7.3% to dismantling by the Allies, while the utilization of production capacity in 1932 only about 45 %, respectively. After the financial crisis starting in 2007, capacity utilization in the manufacturing sector, the level of 83.2 % in Germany fell by 88.2 % on the low point in 2009 to 70.2 % in order to reach 2013.