Discover how to increase your productive capacity
Posted: Mon Jan 20, 2025 9:18 am
Calculating your company's production capacity is essential to defining the financial performance of the business. It is a common calculation in the business world and is a way for managers to understand the company's potential to generate value.
In this article, we will therefore explain the concept of productive capacity. We will also discuss how to identify this metric in your business, how to calculate this index and how to maximize it.
What is productive capacity?
A company 's production capacity indicates how many products or services it is able to produce during a given period. This metric can represent the company's operating rate and speed and the profits derived from its products and/or services.
Measuring this capacity can be useful for more comprehensive management of the company. Producing more does not always mean doing more. Ideally, the operation should be proportional to the demand that the organization has so that there are no losses.
Types of productive capacity
To know the productive capacity of a company, it is necessary to analyze its installed, effective and realized capacity. See the types of production capacity and how each one works:
Installed capacity
A company's installed capacity represents the level of production in relation to its maximum productive potential. That is, with this metric it is possible to know the percentage of production of products or brazil whatsapp data services and determine whether it is at the ideal level for the business to make a profit.
With the installed productive capacity , the manager can know if the company is operating at full capacity or if there is a misuse of resources. Thus, it is possible to verify the need for improvement in order to make more strategic decisions.
Effective capacity
Effective capacity shows how much the organization is actually capable of generating. To do this, it is necessary to consider the current availability of labor, maintenance intervals and material losses due to possible process failures.
Imagine, for example, a company that produces T-shirts. If they work 8 hours a day (or 460 minutes), with breaks for preventive maintenance , in 5% of this available time, the effective production capacity is 456 T-shirts per day.
Capacity realized
Realized productive capacity refers to the calculation of how much was generated in a previous period, taking into account all unexpected events that may have stopped the production of products or services.
Thus, if the company lacked power for 4 hours of the shift (240 minutes) of operation in one day, the productive capacity achieved was 228 products in that period of time.
How to increase the productive capacity of your business?
First of all, it is necessary to identify the real need to increase the productive capacity of the company. If there is a deficiency in production, then it is possible to increase it. See how:
Outsourcing activities
To keep your employees focused on the company's core business, it is best to outsource non-core activities. Hire specialist partners to take on tasks that are outside the company's value proposition.
This can go a long way in broadening your team’s focus and keeping them on track, thereby increasing the business’s productive capacity efficiently.
Behavior training
Another way to increase your productive capacity is to retrain professionals by providing training to make them more productive. Training can be carried out by sector, to keep professionals up to date.
This way, you develop employees' skills more efficiently, as well as have better management of your team's knowledge. This can give employees more confidence and keep the team on track to achieve company goals.
Create a good working environment
The work environment can have a huge impact on the productivity of a company's employees. Factors such as organization, working conditions, the relationship between employees and the state of the equipment are very important.
In this article, we will therefore explain the concept of productive capacity. We will also discuss how to identify this metric in your business, how to calculate this index and how to maximize it.
What is productive capacity?
A company 's production capacity indicates how many products or services it is able to produce during a given period. This metric can represent the company's operating rate and speed and the profits derived from its products and/or services.
Measuring this capacity can be useful for more comprehensive management of the company. Producing more does not always mean doing more. Ideally, the operation should be proportional to the demand that the organization has so that there are no losses.
Types of productive capacity
To know the productive capacity of a company, it is necessary to analyze its installed, effective and realized capacity. See the types of production capacity and how each one works:
Installed capacity
A company's installed capacity represents the level of production in relation to its maximum productive potential. That is, with this metric it is possible to know the percentage of production of products or brazil whatsapp data services and determine whether it is at the ideal level for the business to make a profit.
With the installed productive capacity , the manager can know if the company is operating at full capacity or if there is a misuse of resources. Thus, it is possible to verify the need for improvement in order to make more strategic decisions.
Effective capacity
Effective capacity shows how much the organization is actually capable of generating. To do this, it is necessary to consider the current availability of labor, maintenance intervals and material losses due to possible process failures.
Imagine, for example, a company that produces T-shirts. If they work 8 hours a day (or 460 minutes), with breaks for preventive maintenance , in 5% of this available time, the effective production capacity is 456 T-shirts per day.
Capacity realized
Realized productive capacity refers to the calculation of how much was generated in a previous period, taking into account all unexpected events that may have stopped the production of products or services.
Thus, if the company lacked power for 4 hours of the shift (240 minutes) of operation in one day, the productive capacity achieved was 228 products in that period of time.
How to increase the productive capacity of your business?
First of all, it is necessary to identify the real need to increase the productive capacity of the company. If there is a deficiency in production, then it is possible to increase it. See how:
Outsourcing activities
To keep your employees focused on the company's core business, it is best to outsource non-core activities. Hire specialist partners to take on tasks that are outside the company's value proposition.
This can go a long way in broadening your team’s focus and keeping them on track, thereby increasing the business’s productive capacity efficiently.
Behavior training
Another way to increase your productive capacity is to retrain professionals by providing training to make them more productive. Training can be carried out by sector, to keep professionals up to date.
This way, you develop employees' skills more efficiently, as well as have better management of your team's knowledge. This can give employees more confidence and keep the team on track to achieve company goals.
Create a good working environment
The work environment can have a huge impact on the productivity of a company's employees. Factors such as organization, working conditions, the relationship between employees and the state of the equipment are very important.