AAOM Handbook

INTERNAL

For example; Output (on-spec units per time period) = Utilisation x Output Rate x Quality =

Operating Time x Units Output x Units On-spec Time Period Operating Time Units Output

or Utilisation x Input Rate x Process Efficiency x Quality = Operating Time x Units Input x Units Output x Units On-spec Time Period Operating Time Units Input Units Output The same Output capacity can be achieved with different combinations of these characteristics. Unit Cost (cost per on spec unit of output) = Total Costs / Units on Spec = (Fixed Costs + Variable Costs) / Units on Spec The same Unit Cost can be achieved with different combinations of these characteristics. Hence, for a given set of Effectiveness and Efficiency targets there may be many possible sets of choices of strategy. The production strategy choice is in effect a choice of operating theory for the process and, hence, measures of Production Strategy parameters such as Operating Time, Rate, Quality etc. can be viewed as a set of potential theory measures. In a process where the overall performance responds linearly, and quickly, to changes in an underlying theory parameter there is no necessity to constantly monitor that theory parameter to determine if an intervention is required - because the result of a change in a theory parameter will be almost immediately evident in a purpose parameter. In this case either the purpose parameter can be measured directly, or the theory parameter may be measured as proxy for the purpose parameter. The choice between these two approaches should be guided by the practicality and cost of the two alternatives. Where there are discontinuous (step) changes in process outcomes (as in blasting), and/or significant time lags between theory changes and the resulting changes in an outcome being evident (as in leaching) it is essential to measure the theory parameters in order to determine when a timely intervention is required to maintain process outcome stability and capability. Not every Production strategy parameter will be significant for every process. For example a process that transforms product will have a quality dimension that is significant, whereas a process that transfers product should not have a quality dimension that is significant. Any dimension must be considered

© McAlear Management Consultants 2007

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