Why Having Spare Manufacturing Capacity Is A Must

Dimitrios Matsoulis


We want our manufacturing plants to run as close to capacity as possible. Temporary operation inefficiencies aside, the idea of keeping all of our production assets busy is the end goal of every operation. But each system is subject to the whim of change, both anticipated and unanticipated, on the shopfloor and in the marketplace.

In practice, anticipating change and adjusting your manufacturing schedule accordingly means being flexible. Production management has the option to increase that flexibility by deliberately planning in spare capacity. Typical activities tightly linked to our need for spare capacity are:

1. Maintenance. Sooner or later, running machines to the ground will cost us both time and money. A well organized maintenance schedule will minimize unpredictability and stop unplanned maintenance and machine repairs from creeping into production time.

2. Machine breakdowns. Although keeping machine capacity idle isn't the most ideal way to cover for breakdowns, it can sometimes be the only way to save your order schedule if no other plan is in place. Spending the time to implement operational improvements and organize maintenance schedules are the bridge to a more predictable operation mode.

3. Order books. External factors are bound to bring order changes, order cancellations or new orders and products. The shopfloor must always be ready to accommodate these shifts. Leaving extra capacity for setups related to order changes or new order absorption is a must. On that note, information exchange between manufacturing and sales is vital. Manufacturing can only prepare if it has the best possible information from sales, and sales must be aware of what requests are possible at the shopfloor level.

So how do we create spare capacity? There are four very broad methods:

1. Operational improvements. By squeezing more productivity out of existing resources, we can produce more reliably and achieve output targets faster. The extra capacity can be utilized for extra output or as spare availability.

2. Production line duplication. This is a very popular method in plants with limited flexibility and long setup times. It ties up a lot of capital, and is a burden for efficiency. It can be a temporary solution if new replacement lines are commissioned.

3. Workstation duplication. Duplication is convenient when exact line balancing is impossible, or setups are too lengthy and can cause serious bottlenecks. Extra workstations tie up much less capital than duplicated lines. They don't necessarily remain idle for long periods, as non-production time can be utilized for setups, cleaning and feeding of raw materials.

4. Multiple plants. Utilization scenarios can be extended to the plant level. For manufacturers that have this ability, it's possible to plan in many beneficial ways. For example certain plants can be high volume and high utilization, while others handle the overflow and variability in order books. Decoupling production with this method limits flexibility issues to a smaller number of plants and keeps operational improvements better centered on high or low volume environments.

We try to mitigate the rate of change and unforeseen events affecting our manufacturing environment by giving our operation as little unpredictability as possible. Depending on how spare capacity is utilized, it can give you a competitive advantage. In broad terms, operational improvements are the only route to predictability, quality, productivity, and providing firm ground for planning and profitability.