Production Efficiency in Manufacturing: A Guide to Success

  • Published on : October 8, 2023

  • Read Time : 13 min

  • Views : 4.7k

Production Efficiency in Manufacturing: A Guide to Success

No matter what industry you’re in, it’s important to maximize your efficiency. This is most obvious in the world of manufacturing. In today’s manufacturing industry, companies are consistently seeking fresh ideas to increase production efficiency in manufacturing and enhance profitability.

You can’t just relax and be content when it comes to manufacturing. Since every industry is continuously trying to get more output with fewer resources.

So, how can you tell if you’re getting the most out of your limited resources?

Productive efficiency is here to make things better.

What is Productivity Efficiency?

Productivity efficiency (PE) is a method that shows you where you can cut down on waste and use your resources more effectively.

In this blog, we’ll walk you through the ins and outs of productive efficiency and how you can begin improving the efficiency of your manufacturing and maintenance processes.

Understanding Production Efficiency

Economics might not be on your mind all the time, but it has some interesting ideas about efficiency. Let’s talk about one of them called “productive efficiency.”

Productive efficiency is like the link between big and small things in economics. It’s about how we can save money on a large scale and also save little bits of time here and there.

Imagine a factory or a company. They make different things, right? Productive efficiency is when they reach a point where they can’t make more of one thing without making less of something else. It’s like a limit, and we call it the “production possibility frontier.”

In simple words, productive efficiency means using resources really well to get the most out of what we have. We want to find the smartest balance in making all these different things.

For example, think about your own efficiency when doing homework. You’re at your best when you use your time and supplies wisely, and you don’t waste anything. And no matter how hard you try, you can’t finish more homework without more time.

The same goes for factories and businesses. They have limits too, like materials, workers, machines, money, and technology. The goal is to use all of these things wisely to make the best products for the people who want them.

So, productive efficiency is a big deal in any industry that doesn’t have an endless supply of resources.

Key Metrics for Measuring Efficiency

In simple words, production efficiency means looking at how much you really make compared to the most you could make at your very best. This best-case scenario is called the standard output. Therefore, to achieve productivity, your actual output should match your standard output.

You can apply the following formula to assess the efficiency of your current output:

Production Efficiency = (Actual Output ÷ Standard Output) x 100

To put it simply, the Actual Output Rate tells you how many things you’ve produced in a certain amount of time.

You can calculate it by dividing the number of items by the time it took to make them.

The Standard Output Rate, on the other hand, tells you how quickly a skilled worker should typically make those items within the same time frame.

When the result of this calculation is 100%, it means you’re working at your best efficiency.

Let’s talk about how to figure out how well a factory or company is doing in making stuff. We use something called “production efficiency.” It’s like a grade for how good they are at making things.

Here’s how we calculate it: First, we look at how many things they actually made (let’s say 8,500 units last month), and then we see how many they could have made if everything was perfect (10,000 units in this case).

To get the efficiency percentage, we use this formula: (Actual Output / Standard Output) x 100.

In our example, it’s (8,500 / 10,000) x 100, which equals 85%.

So, their production efficiency for that month is 85%. It’s like getting an 85% grade in how well they made their stuff.

When we use this formula, we have to be careful that we use the same units of time for both the actual output (what they really made) and the standard output (what they could have made). This way, we get the right answer.

For instance, let’s say they made 8,000 units in 25 days. But we want to know how much they would make in a whole month.

We can calculate it like this: (Daily Production / Number of Days) x 30. In our case, it’s (8,000 / 25) x 30, which equals 9,600 units.

So, they could make 9,600 units in a month based on what they did in 25 days.

That’s how we figure out production efficiency, but there are other ways to measure it too, like using something called OEE scores.

How to Boost Efficiency in Manufacturing?

Instead of going straight into the topic, let’s start by looking at a real-life example.

In a bustling industrial town, a small bike shop known as “ABC” crafted excellent bikes by hand. However, as the demand for their bikes increased, they had to find a way to scale production without compromising quality. Mr. Wheeler, the owner, realized that embracing production efficiency held the solution.

One day, inspired by an article he read on production efficiency in manufacturing, Mr. Wheeler gathered his artisans, analyzed their process, and found ways to improve. They introduced modern tools, improved communication, and implemented smart scheduling. Artisans received extra training, and machine maintenance became a priority.

Months passed, and Wheeler’s company thrived. Their production efficiency soared, meeting demand without compromising quality. They showed that tradition and innovation could coexist, ensuring their craft’s survival and success in a fast-paced world.

This story is the perfect example to prove how production efficiency in manufacturing can fuel a business’s growth without giving up its traditional ways.

Therefore, once you know how efficient your company’s production process is, you can start making it even better. Here are a few ways to do that, in which we’ll go over in more detail below.

1. Check what problem your workers are facing

To make your manufacturing run smoother, begin by checking if you have the right team of workers. Listen to your workers’ ideas and see if you can make things easier with technology. Regularly engage with your workers and collaborate on developing plans to increase productivity over time.

2. Train your employees

To make your manufacturing process work even better, here’s a simple plan: focus on helping your employees learn and improve. Make sure they get lots of training and keep good records of what they learn. Use schedules to see how well they’re doing and give them extra training when they start using new equipment.

You can also give your workers online tools and resources so they can learn on their own. This will help them become better at solving problems.

Research shows that when your workers know more, they can do their jobs almost 9% better, which is a really good thing for your company.

3. Increase communication within and outside the company

Good communication is super important for making things efficient in manufacturing. Work well with your employees, suppliers, vendors, and partners.

Use tools like ERP systems to share information quickly. Keep an eye on how well your workers are doing, how your supplies are coming in, and how everything is running to make smarter choices.

Look at everything from buying stuff to sending it out to find and fix problems quickly to get more work done.

4. Maintain the machines properly

Regularly checking and taking care of your tools in a factory is crucial. It may seem like a pain, but overlooking it is a serious error.

Those maintenance schedules might be a little irritating, but they guarantee that everything continues to run smoothly and keep everyone protected.

Keep searching for better tools that can make you work faster without needing to put in extra hours. Teach your team to keep an eye on how the machines are doing, stick to the maintenance schedules, and have spare parts ready to replace anything that breaks quickly. The less time your machines are out of order, the better your factory will keep making stuff.

5. Schedule shifts of employees

Creating a smart work schedule in manufacturing can make things work better. It means having the right number of workers when you need them.

This can stop workers from waiting around and make everything run smoother and faster.

Plus, good schedules can help people show up for work and stick around, which is great for getting things done. Special software developed by companies like Codiant can help with this, making scheduling even easier and boosting efficiency.

6. Automate the manufacturing process

In the 21st century, automation has advanced a lot, not just in machines but also in how we manage things. It’s not just about fancy machines anymore.

Implementing advanced software like ERP is always needed to make tasks easier in manufacturing.

Let’s take an example: You can automatically record when employees start and finish work using this software.

You don’t need any fancy equipment, and all the information is stored online in the cloud. This helps us keep an eye on attendance, overtime, leaves, and where people are in real-time. Using these automation tools can be a big help in the manufacturing industry.

Five Stages for Improving Manufacturing Cycle Efficiency

In manufacturing, cycle efficiency isn’t only about making a product. It includes everything that happens before and after creating that product. To stay ahead of the competition, companies need to think about the whole product journey. They must check every step to avoid wasting resources. Here’s a simple overview of the steps to make manufacturing more efficient.

1. Analyse:

First, figure out what’s happening in your current manufacturing cycle. Examine how things are made and pinpoint any areas where time or resources could be used more effectively.

2. Plan:

After understanding the situation, create a plan to improve it. Determine what changes are necessary to work more efficiently.

3. Implement:

Put your plan into action. Make the changes you’ve decided on and make sure everyone is clear about their tasks.

4. Monitor:

Monitor the new process closely to verify its alignment with your expectations and assess whether it is yielding time and resource savings as intended.

5. Optimize:

If you see any issues or find ways to do things even better, make those improvements. Keep refining your process to maximize efficiency.


In conclusion, achieving production efficiency is vital for any business to thrive in today’s competitive landscape. Embrace modern digital tools and approaches to optimize your manufacturing processes. Efficiency means minimizing waste, energy, and time while reducing costs.

Key indicators like OEE, material yield, and labor efficiency provide valuable insights. Real-time visibility into production data is essential for quick decision-making. Companies like Codiant empower operators and managers to identify and address bottlenecks swiftly.

In the competitive manufacturing world, success relies on technology, data, and continuous improvement. By embracing these principles, you can optimize processes and ensure long-term profitability.

Don’t miss our upcoming articles that delve into the powerful fusion of high-tech solutions with enterprise and manufacturing, propelling business growth to new heights!

Elevate Your Business Operations with Next-Gen Manufacturing Operational Efficiency.

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