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Six Sigma and Business Analytics: Capacity

How well does your organization operate? It’s not a trick question, but it’s an important one. Six Sigma uses raw data to make justifiable changes to business processes with the aim of increasing quality and efficiency. This data is integral to your ability to make such changes, as your capacity utilization affects everything from efficiency and productivity to profit. Every business needs a strong revenue stream to operate and expand. But if you’re up to your ears in variation and waste, your basic operations will start to falter. You can prevent this with Six Sigma business analytics. Keep reading to learn how you can measure your operating levels with capacity analytics.

 

What is Capacity Analytics?

 

Remember, your capacity utilization is inextricably linked to efficiency and productivity. These two keystones enable your business to move along at a rapid pace, making prompt, proactive decisions on the go. As such, both have a large impact on profit. You can use capacity utilization analytics to measure your capacity, providing insight into how you’re currently doing. This is extremely helpful when trying to find solutions to low revenue, as you never know how much more you could be doing.

 

While there are similarities between customer utilization analytics and employee capacity analytics, they focus on different things. The key difference is that the former focuses on machinery and equipment as opposed to employees. Modern production machinery feature sensors which collect information on their usage. You can then analyze this data to gain useful insights into your efficiency. Moreover, you can then apply Six Sigma techniques to devise improvement solutions.

 

Your Guide to Capacity Analysis

 

First off, decide what area you wish to assess, be it admin, production, or another sector of your business. You should lay out a plan for analyzing the data before commencing the analysis. Consider your current capacity levels. Take a holistic approach, and you will gain a holistic understanding of the issues affecting performance and inhibiting change. You can then act on this information to change your operations for the better. Moreover, the capacity types you find may vary from business to business. Don’t forget to zero-in on hard and soft capacities, as well as factors like power distribution and leadership.

 

You should also lay out which tools and approach you wish to use. You could take an incremental approach which begins by identifying your current capacity, allowing you to build on this information, to create viable solutions. On the other hand, a gap analysis may benefit you more. This technique begins by defining the optimal conditions for your business, i.e., how they should be, so you can identify what’s missing. All you have to do then is fill in the gap.

 

Remember, each entity within your business progresses at a different rate. Paying attention to past analyses will help you track the entity’s course from then to now, allowing you to make decisions that will affect your future capacity. Moreover, don’t fall prey to generalization, as your conclusions will suffer from inaccuracies. Pragmatism is important here as too much information can be redundant. You’ll never need to perform analysis down to the smallest detail, so don’t waste valuable time. Instead, develop strategies to expand your capacity using Six Sigma process improvement. Use business analytics well, and you can transform your organization for the better.

 

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