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Production Target and Production Volume


Production targets are a very simple but common production process kpi. The production target ususally sets out the amount of production in terms of tonnes, units, or other production volume unit for the plant, process or individual production line for a certain time period. Production targets are ususally set in the budgeting, capacity planning or strategic planning process for the plant or business every year, quarter or month and are usually not just a single number but a set of numbers depending on the plant and product line complexity.

Different Production Targets

Gross production The gross production from the production line including waste and defect products or scrap is all included int his figure. This is the total output for the production process.

Saleable production

Saleable production is the amount of production that can actually be sold to customers. This is calculated by reducing the gross production amount by waste, scrap, and including any re-worked production units.

FTT

Gross production minus defective units includes all units of production which are scrapped, re-worked, do not meet standards, require repair, or are not saleable.

Among the different things to consider and input into the production target decision making process are the following factors:

-Current stock on hand
-Labour Productivity
-Unit cost of production and impacts to the cost curve of the plant.
-Production planning process and limitations
-Availability of warehouse space
-Customer demand and seasonality
-Production line capacity
-Other business and industry factors


    More lean concepts and terms