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what_is_wrong_with_100_utilization_thinking [2016/07/03 13:38]
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what_is_wrong_with_100_utilization_thinking [2016/10/25 19:40]
Hans Samios [Understanding Real Cause and Effect of Utilization]
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 {{ :​cycle_time_vs_utilization_rates.jpg?​500 |}} {{ :​cycle_time_vs_utilization_rates.jpg?​500 |}}
-I want you to have a look at the chart((Basis of chart results come from [[the_principles_of_product_development_flow_second_generation_lean_product_development_-_don_reinertsen|The Principles of Product Development Flow: Second Generation Lean Product Development - Don Reinertsen]] although it has been liberally interpreted to aid in understanding.)):​+ 
 +I want you to have a look at the chart((this version ​of chart results come from [[the_principles_of_product_development_flow_second_generation_lean_product_development_-_don_reinertsen|The Principles of Product Development Flow: Second Generation Lean Product Development - Don Reinertsen]] ​which was originally from the Kingsman Formula, ​although it has been liberally interpreted to aid in understanding.)):​
  
 This is what actually happens when you increase the utilization rate beyond a certain threshold. Basically it says that "as we approach 100% utilization the time it takes to process something becomes exponentially large."​ This is an application of "​queuing theory"​. It turns out that every time you halve the amount of excess capacity, you double the time it takes to process something. So as you move from 60% to 80% utilization you double the time it takes to process something, and moving from 80% to 90% will double it again. This is what actually happens when you increase the utilization rate beyond a certain threshold. Basically it says that "as we approach 100% utilization the time it takes to process something becomes exponentially large."​ This is an application of "​queuing theory"​. It turns out that every time you halve the amount of excess capacity, you double the time it takes to process something. So as you move from 60% to 80% utilization you double the time it takes to process something, and moving from 80% to 90% will double it again.
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