Printing Industry Performance Indicators:
Measuring Plant Efficiency
Optimizing efficiency is
the easiest and least costly initiative a printing organization can
undertake to improve their bottom line. Nevertheless most printing
organizations fail to take enough notice of efficiency.
Efficiency is the
optimum use of resources such as employees and production equipment
to get the work completed. Efficiency is measured by comparing
actual production activities to production standards. Standard
production hours are the average time it takes to perform various
operations such as makeready, running, and washups.
Efficiency is measured
using this formula:
Standard production hours ÷ actual production hours = % efficiency
For example, production
history shows that a press operator typically runs a press at 5,000
per hour. Therefore, we price a 10,000 quantity order to take 2
hours of press time. If for some reason the pressman averages only
4,000 per hour on a particular job and it takes 2 ½ hours, he is
only at 80% efficiency.
2 standard hours ÷ 2 ½ actual hours
= 80% efficiency
The goal is to achieve
100% efficiency or better. At 100% efficiency production is
operating in par with standards and forecasted sales profit. At 120%
efficiency production is operating 20% better then the standards and
making additional profits. Operating below 100% efficiency and the
production is consuming profits.
