Capacity Utilization Rate
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Capacity Utilization Rate. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is Capacity Utilization Rate?
The actual number of units produced (i.e., actual output) by the company, or within a single manufacturing facility/plant, divided by the number of units that could have been produced over the same period of time if the operation was running at full capacity (i.e., potential output), as a percentage.
Why should Capacity Utilization Rate be measured?
Manufacturing Capacity Utilization Rate is a vital KPI that measures actual versus potential output within a manufacturing facility or company (i.e., across all facilities managed by the organization), or sometimes within the economy as a whole. On a macroeconomic level, Capacity Utilization Rate is an indicator of economic productivity that speaks to overall demand and how that impacts activity within the manufacturing sector. At the operational level (i.e., within or across a company's manufacturing sites), this KPI can be used to assess the efficiency and allocation of production capacity (e.g., facility A is operating at 85% capacity, while facility B is only at 65% - why is this?). Capacity utilization can also be used at the operational level to determine whether or not existing manufacturing capacity is sufficient to meet forecasted demand (e.g., the facility is currently operating at 70% and we expect a 25% increase in demand; there is an additional 30% capacity available to meet that demand).
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