Capacity Planning Post Recession

I have been writing for the past few weeks about the wildly swinging copper market and the recession recovery which is clogging up our production with urgently needed items. This is continuing to affect us deeply with competition for scrap copper driving prices up and the urgent production figures growing with each passing day.

As a result of the discussions we have been having with clients rushing to expedite items, we are often asked if we have enough capacity to cope with future requirements. To answer this fully, we have to describe the two sides of the capacity planning that we do, which are planning the immediate output capability of the plant and the long term capacity of the plant assuming we could have as much labour as we could employ.

Immediate Output Capability

The immediate output capability of the plant is something that we monitor week-by-week as part of our management strategy. We measure the output capability in terms of standard machine hours from our machine shop which is a measure of a standard quoted hour of production. This is reported daily at our management meeting with the goal of meeting or exceeding the daily output for which we have set up with staffing and hours worked. Before the recession, we were producing on average a steady 1800 hours of production. At the bottom of the recession we were at approximately 800 hours per week and we have in the last week increased our immediate capacity to 1300 hours per week. The daily monitoring of performance combined with the weekly adjustment of capacity means we are able to manage increases in demand and also continue to have accurate knowledge of when we will deliver each order. This is helping us get our clients through the sudden and uncomfortable (but good) upsurges in demand.

Long Term Output Capability

The long term capacity of the plant is much more extensive. At the moment we are working a 2 shift 5 day work pattern in our machine shop. The foundry itself operates 24 hours a day, 7 days a week and the goal was always to get our machinery utilisation to match the foundry output. The recession made us take a step backwards, but as we take on new projects we will work towards working longer hours on our CNC lathes. The extra capacity is huge, as we are currently only working 80 hours of the week and not all machines are working. The potential is to at least double our capacity using the existing machinery. There is also plenty of space in the existing workshop for new machinery if demand rises to the point it is justified.

So, we are ready to take on any project you have for us. We are quickly able to gear our workforce to increase our output and we have plenty of space for new gear if your inquiry takes us to a new level.

Matt Toohey