Capacity Utilization isn’t just about machine hours, it’s a critical metric that measures how effectively a company uses its production resources.

For leading plastic injection molding companies, understanding and optimizing this metric is key to maintaining competitiveness, ensuring quality, and meeting customer demand.

Simply put, capacity utilization is the percentage of a manufacturing facility’s total production capacity that is actually being used over a specific period. It essentially answers the question: Are we making the most of our machines, labor, and time?

The basic formula to make the calculation is: Capacity Utilization (%) = (Actual Output / Maximum Possible Output) x100

To put that into context, suppose a machine can theoretically produce 10,000 parts per week if it runs 24/7 without interruption. If in reality it produces 7,500 parts in a week, the capacity utilization is 75%. (7,500 /10,000) x 100 = 75%. This means the machine is running at 75% of its full potential.

This measure, while simple, gives great insight into the operations, and demonstrates cost efficiency (higher utilization means fixed costs are spread over more units, reducing the cost per part); and better lead time understanding.

It also shines a light on the fact that running machines too close to 100% can lead to wear, breakdowns, and quality issues. Smart companies (like ADIS Tachov s.r.o.!) are able to ascertain that sweet spot and plan accordingly.

That doesn’t happen by magic, it happens through unrivaled experience.