Idle Production Capacity
Idle Capacity is the remaining capacity after elimination of productive and protective capacity. Productive Capacity is the capacity required to complete the current schedule of production. The protective capacity is the reserve resource which to ensure there is enough capacity in case of a bottleneck.
Idle Production Capacity may be different depending on the nature of manufacturing and the management intention. If the management allows some downturn during the operation, there will be less protective capacity require.
Reasons of Idle Production Capacity
The low-quality raw material will increase the time spend as well as the wastage percentage. It will create a bottleneck in any stage and cause idle capacity for the next one.
Sometimes the working capacity of each production stage is not matched. When any stage produces lower than others, it will become a production bottleneck. It will cause the idle for the next production process.
The new staffs will not be able to work as fast as the experienced staff and they are highly to make some mistakes. As the result, they will create bottlenecks and idle time for the next production stages.
Solution to Idle Production Capacity
In order to solve this, management must require staff to work overtime or increase extra shifts. It will help to increase the capacity so that the whole operation will be matched. And it will reduce the idle capacity which will reduce the cost of production. Moreover, some companies may decide to purchase the WIP from the others manufacturing. They will sub-contract from outsiders as the cost of purchase is lower than the cost of idle production capacity.