CUTE

Capacity, Utilization, Time & Efficiency

Industrial Operations
GROUPE DANONE

CUTE

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Introduction
CUTE aims to provide a common terminology for the definition and control of
Utilization and Efficiencies of our Lines and Factories.
Our goals for sustainable growth whilst continuing to improve margin and yields,
will not be achieved without improving the utilization and the efficiencies of our
Factories and related Capital Assets.
The definitions and indices in CUTE shall be implemented in all our factories and
the respective CBUs should use them to monitor their assets performance.
It is essential that all CBUs apply CUTE in a consistent way so that data is
comparable within our operations. Only in this way can the effectiveness of the
various Manufacturing Performance Improvement programs be seen.
CUTE will provide consistent data to be used by GROUPE DANONE Divisions in
analyzing sourcing scenarios.
This reference handbook has been agreed by the Operations Directors of the
three WWBU and the Group Operations Committee.

Prepared by:

CUTE

Luis Larracoechea

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1. Background
Within GROUPE DANONE Divisions, different factories and CBUs use different
terminology and criteria for the definition and measurement of utilization and
performance indices. CUTE specifies terms and indices for harmonized
measuring and reporting on the performance of machines, lines and WW
factories in GROUPE DANONE.
CUTE definitions are intended to ensure that any communication on aspects of
time allocation, line utilization and efficiencies means the same to everyone
involved.
- Specifies Machine Time Definitions (CUTE is meant to define machine operation,
not labour utilization) for the analysis of Packing Lines, Plant or Processes*
* The term machine is used in a very general sense, and the same analysis is applicable to
a group of machines in a line, any process or plant.

- Defines a number of Performance Indices for internal use within each

CBUs and for inter company benchmarks.
- Provides a framework for the measurement of Plant Capacity that can be
used for: short term planning and scheduling, calculation of long term
capacity planning, factory masterplan and Capital Assets requirements.
The expression standard has been deliberately avoided in this handbook. The
word normally implies the building-in of allowances to cover losses of time or
product. These are often associated with labour and invariably relate to local
circumstances, but their inclusion would make inter-companies benchmark
inconsistent.

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2. CUTE (Capacity,

Utilization, Time & Efficiency)

Summary Diagram

C
A

Calendar Time
Unavailabl
e Time

Available time

Availabl
e
Unused
Time

Disposable Time

Planned
non
Operational
Time

Operational Time

Production Time
Net
Production
Time

NP

Routine
Productio
n
Activities

Unexpecte
d
Stoppages

Definitions of Machine Time

Calendar Time

Calendar Time defines the maximum time within a reporting period, such as:
-

CUTE

52 weeks in a year
168 hours in a week
24 hours in a day
8760 hours in a year

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C
A

Calendar Time
Unavailabl
e Time

Available time

Available Time is the time during which the machine/line could operate within
the limits of local or industry working conventions. This means that it will
effectively be the normal working pattern of the site (although overtime must be
added to it when worked).
Unavailable Time is the time during which the machine is not normally
operated, owing to:
Bank Holidays:
- The time in which factory is planned to be closed due to bank holidays.
Other Traditional or Enforced Closures:
- Weekends not worked, if the local regulations don't allow working on Sunday and (or)
Saturday.
- Local holidays, specific to the region of the country,
- Traditional closures. For example: afternoon and night shift on Christmas Eve,
religious holidays.
- Closures enforced by Union of Workers or Local Authorities.
- Shift working restrictions
- Enforced factory shutdowns

These days are planned for the whole year during budgeting time.

Unavailable Time is effectively the time that is agreed within the CBU
management to be outside the control of the factory management. (Note that:
negotiating overtime operation could reduce it.)

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Available time

Disposable Time

Available
Unused
Time

Disposable Time is the time during which the machine is actually used by
production and engineering, whether or not the machine is actually producing.
Available unused Time is the time in which the machine/line could be used but
production is not scheduled because there are no production orders planned
from Supply Chain. (Note that: a Machine upgrade, overhauls or other types of Planned NonOperational activities, are not considered as unavailable time.)
Calculation of Available Unused Time: The amount of time in this category cannot be
calculated directly but has to be derived from the difference between the Available Time and the
Disposable Time.
Available Unused Time = Available Time Disposable Time

Where the Disposable Time is the calculated time that would be required to
produce the actual or estimated volume of production when the machine is
operating at its Operational Efficiency plus any Planned Non-Operational Time.

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D
O

Disposable Time
Planned
non
Operational
Time

Operational Time

Operational Time is the time during which the machine is planned to be

operated for production purposes. Note that: Operational Time is normally the same as
the shift hours.

Planned non-Operational Time is the time when the machine cannot be

operated productively owing to planned activities for organizational or
engineering reasons:
Scheduled big Maintenance or Overhauls:
- Big maintenance planned on yearly or monthly basis (should be shown in weekly
plan).
Scheduled Machine Modifications:
- Modification aiming to improve machine performance, quality of product, safety of
work or enabling the production of new product.
- It is often linked to capital investments.
- Always it is a planned activity not the reaction to a breakdown
Trails with no production (R@D Trails):
- Trails done in order to develop new product or improve existing production
technology.
- It is planned according to requirements of R&D or production department
- No sellable product is produced during these trails.
General Factory fumigation:
- Periodical fumigation of the factory against the insects.
Cleaning of baking plates (wafers):
- Regular planned cleaning of wafer plates that takes place after specified numbers of
working hours.

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O
P

Operational Time
Production Time

Routine
Productio
n
Activities

Production Time is the maximum time during which the machine is expected
to effectively run and deliver finished products.
Routine Production Activities is the time taken by operational activities that are
required to enable the machine to produce. These activities normally occur whilst
the machine is staffed and are included in weekly and daily production plans:
Equipment changeovers, format changes:
- Time between last previous good product to first new good product. Measured on
packing hall.
- Time for which the line was stopped due to change of production from one recipe
or shape of product to another one.
- Also time for which the line was stopped for change of packaging without
changing of recipe or shape of the product.
Start-ups and Shutdowns:
- Time lost to start or close production.
- This is the time to prepare or finish the production while the line is staffed with
regular crew.
- Normally it will be the time from beginning of the shift to the first product packed
and from the end of packing to the end of the shift.
- Start-ups and shut-downs are preceded or followed by the period of nonproduction activities fe. Factory closure, time without the orders, planned
maintenance etc.
Sanitation & Routine cleaning:
- Cleaning necessary to preserve proper hygiene of the line. It is done on regular basis
required by hygienic condition/regime of the line. Usually once per week, every other
week, after end of a block of production, but sometimes planned in the middle of a
production run.
- It is routine planned period used for manual cleaning of production line or
automatic CIP.
- Can be done by regular or reduced number of workers.
Trials with Production:
- Time lost due to trials organized by production and linked to start-up period or
change of technical equipment.
- The product that is produced during these trials is valid for sales.
Lunch or rest breaks:
- Time for which the machine/line was stopped due to staff lunch or rest break. Note
that: CUTE defines machine/line operation, not labour and as such, if a machine/line
is stopped for meals, breaks or other rest periods, the time is recorded as a Routine
Production Activity. They may be avoided by providing with relief operators.

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Production Time
Net
Production
Time

NP

Unexpected
Stoppages

Net Production Time is the theoretical time that a machine/line should take
to produce the good output if it runs at TMP speed. It includes no allowances for
interruptions, or any other time losses. Where a machine/line is producing a
range of products, calculation of the NP for the output of each product, enables to
report an average efficiency for the mix. (NP=Weighted average for the output of
each product)
Calculation of Net Production Time: NP is not a time that can be recorded, but
it must be calculated directly from the declared production.
Net Production Time = Output Produced / TMP

Where TMP, is the maximum achievable speed of a machine/line for a particular

product, without any allowance for loss of efficiency. It is expressed as a quantity
per unit of time (pieces per minute, Packs per minute, Cases per hour) and
converted into Kg/hr by applying the declared weight of the SKU produced. TMP
will normally be set and agreed by production and engineering management in
the factory after measurement and trial. As TMP may vary with the item being
produced and other operating conditions, setting a target running speed for
machines in different factories should be done with great care after analysis of
the operating conditions taking into account:
-

Upgrades of machines/lines
Different pack sizes and formats of the same product
Special wrappers for presentations, discounts or promotions
Local improvements to the machine/line
Local restrictions due to the quality of packing materials

Unexpected Stoppages is the time when the machine is unexpectedly stopped

by identifiable and non-routine events, during its Production Time. The causes
for Unexpected Stoppages are classified in four categories:
(1)
(2)
(3)
(4)

Technical Downtimes
Technological Downtimes
Organizational Downtimes
Time and Waste Adjustments

(1) Technical Downtimes:

- The list of the technical downtimes will be specific to the factory and production line.
We should include here, bulk ingredients delivery system and all machines and
equipment used on the line
- The level of details is the internal factory decision and will depend on the frequency
of breakdowns and data collection system that the factory is able to put in place.
(2) Technological Downtimes:

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Technological Problem
- Time lost during production, which are related to process problems.
- The cause is not clearly identified and cannot be dedicated to another line in this
section.
- Wrong size of product causing stop of the line due to problems with packing.
Unexpected need for cleaning
- Short stoppages for cleaning needed to take place during Production Time. For
example:
Cleaning of milkwashing unit
Short stoppage at the end of the shift for the machine cleaning
Time for re-heating of the Chocolate Enrober
Change of packaging portion
- Short stops of machine for loading new portion of packing material. Usually
registered only when TMP of the line is governed by the output of Packing machine.
Change of reel of packing material when Packing machine is the bottleneck of
the production line.
Defective Raw or Packaging Material
- Time lost is clearly connected to inadequate quality of Raw or Packaging Material

(3) Organizational Downtimes:

Hygiene and Food Safety
- Line stopped for Hygienic or other Food Safety reason.
- The causes for stoppage are located in the factory. For example:
Stoppage for the machine (line) sanitation, necessary to continue the production
but previously not planned for.
Line stopped due to contamination of production. The source of the
contamination is internal.
Lack of Raw or Packaging Material
- Raw or Packaging Material unexpectedly not available for production.
Not delivered to the production line from the storage area
Not delivered to the factory or in-hold for quality check.
Lower number of staff than planned
- Staff moved to continue production on another line despite the plan to produce.
Not enough workers to run the line and line stopped
Line run with slower speed due to less available number of workers than
planned. Lost output should be recalculated to lost time
Line stopped to pack the product accumulated due to lower number of workers
than required
Low skills and/or Operator mistake
- Time lost due to inadequacy of operator skills and/or by not following the working
procedure.
Accident
- Time lost due to accident of the operator.

(4) Time and Waste Adjustments:

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Time Adjustment
This is the time that is calculated to be lost when the machine is not running at its
specified TMP and/or due to unexpected stoppages, which are too short for manual
recording.
Waste Adjustment
Is calculated by converting the weight of collected waste during the production run into
units of equivalent time. Note that: Concepts such as: Technological waste, Burnt
leftovers from wafer ovens and waste from cutting of wafer books are not to be
converted into time as they will not impact Line Output and Efficiency.
Calculation of Time Adjustment: The amount of time in this category cannot be calculated
directly but has to be derived from the difference between the Production Time and the Net
Production Time calculated from the TMP, plus all recorded Unexpected Downtimes.
Time Adjustments = P (NP+(Technical+Technological+Organizational+Waste))

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3. Indices of Utilization, Efficiency & measures of Plant Capacity

3.1 UTILIZATION INDICES
Questions on Asset Utilization are increasingly being raised at the GROUPE
DANONE Divisions because of sourcing within regions and the importance of
utilizing Capital resources effectively. The following indices have been defined for
GROUPE DANONE benchmarks and for annual budget estimates.
Utilization Indices primarily measure the use of the machine/line time but to a
lesser extent also indicate how they perform. They will be improved by increase
in sales volumes or by reduction in assets. However in some factories it will not
be possible to eliminate all unutilized (waste) time, because some capacity has to
be reserved to cope with peaks in sales demand. In these circumstances further
improvement would depend on planning production to smooth the peaks in
demand.
3.1.1 Available Utilization (AU)
It is a measure of how well the machines/lines are utilized, within the existing
constraints of Available Time. AU measures how an asset is planned to be used
in the time that it is normally operated when running at its current efficiency.
AU= Operational Time (O) x 100
Available Time (A)
3.1.2 Operational Utilization (OU)
Top of mind indicator for
Utilization
It is a measure of how well the machines/lines would be utilized if the total
Calendar Time was available.
OU= Operational Time (O) x 100
Calendar Time (C)
3.1.3 Net Utilization (NU)
It is a combined measure of both the performance (Efficiency) of a machine/line
and the use of its time (Utilization). NU measures how much output can be
obtained from an asset in the total Calendar Time when running at its current
efficiency.
NU= Net Production Time (NP) x 100
Calendar Time (C)
NU= Operational Utilization (O/C) x Operational Efficiency (NP/O)

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This is a very severe measure of the assets use. It will primarily be of value for
inter-company benchmarks when assessing how a line is being utilized over the
long term.
3.2 EFFICIENCY INDICES
It is essential in ALL statements of machine/line efficiency to mention the TMP
used for calculation. The TMP will normally be set by the factory taking into
account local machine/line constraints and may vary with the products produced.
It will however be compared with centrally set reference speeds in case of key
pieces of normalized equipment
3.2.1 Production Efficiency (PE)
It is a measure of how effectively the machine/line has been run by the
production department during the time it was under their control and could have
run productively.
PE= Net Production Time (NP) x 100
Production Time (P)
Improvement in PE is normally tackled at the operating level in a factory by
reducing the causes of unexpected stoppages, by ensuring adequate supplies of
materials or clearance of product from the machine/line and by applying
preventive or corrective maintenance.
3.2.2 Operational Efficiency (OE)
Top of mind indicator for
Efficiency
This is the most commonly used indicator of efficiency at both the CBU and
GROUPE DANONE Division level, because it measures all the activities within
the control of a factory.
It is a measure of how efficiently the machine/line has been operated by the
production and engineering departments of a factory during the time it was
planned to run ( for example, how many and how well startups, changeovers
etc are handled).
OE= Net Production Time (NP) x 100
Operational Time (O)
Improvement in OE is normally tackled at the departmental level in an
organization. By reducing frequency and times for start-up, shut-down and
cleaning, by not stopping machines/lines for meal or other personnel breaks, by
designing machines and operations to simplify changeovers, loading and
unloading or by reducing causes of unexpected stoppages
Note that: When seeking to reduce Working Capital, it may sometimes not be
possible to increase the OE. This will happen when it is more beneficial to reduce
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stock levels by shortening production runs, which will tend to increase the
number of changeovers and, hence, lower the OE.

3.3 CAPACITY MEASURES

The capacity of a factory or an individual machine/line is the output that can be
expected to produce, over a period when operating under specified conditions
with a stated product mix.
Plant Capacities are needed and used for different purposes:

3.3.1
GROUPE DANONE CBUs and Inter Company Sourcing, need realistic figures
showing what their factories can be expected to deliver in current circumstances.
Maximum Capacity (MC)
It measures the potential or maximum output that could be obtained from a
machine /line when operated at a stated efficiency over the total Calendar
Time (8760 hr) in a year.
MC= TMP x Operational Efficiency x Calendar Time
Available Capacity (AC)
It measures the output that can be expected from a machine /line when
operated at an estimated efficiency in a full year taking into account the
constraints for Unavailable Time, during which the machine/line will not
operate due to the limits of local or industry working conventions.
AC= TMP x Operational Efficiency x Available Time per year
Note that:
1. MC and AC will normally apply to a specific product mix, so that, need to
be calculated using their weighted average TMP.
2. When declaring machine/line capacity, the Operational Efficiency at
which it was calculated should always be stated (fe. Available Capacity @
80% OE)

3.3.2
Planners and schedulers need figures that are practically achievable; hence,
allowing them to make efficient use of installed capacity.
Operational Capacity (OC)

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It is a measure of the practical output that can be expected from a

machine/line when operated at an estimated efficiency in a full year. It is
used to investigate whether the forecast sales demand can be met. OC is
measured over a long period, so that, it normally applies to a specific product
mix and in effect is calculated using their weighted average TMP
OC= TMP x Operational Efficiency x Operational Time per year
Production Capacity (PC)
It is a measure of capacity often used for shift scheduling with a short time
horizon usually no more than days or weeks. When PC is measured over a
short period, such as a shift, TMP used will often be specific to one SKU
rather than to a mix of products.
PC= TMP x Production Efficiency x Production Time per shift, day or week

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Aggregation rules for reporting Utilization & Efficiency at Plant

level

Operational Utilization (OU)

Operational Time per SKU
From SKU to Line (OU Line) =
%
Calendar Time
(OU per Line x Avg. TMP per Line)
From Line to Plant (OU Plant) =
%
Avg. TMP per Line

Operational Efficiency (OE)

Net Production Time per SKU
From SKU to Line (OE Line) =
%
Operational Time per SKU
Net Production Time per Line
From Line to Plant (OE Plant) =
%
Operational Time per Line

NB. The Avg. TMP for a line is calculated using Operational Time per SKU as a weight

(TMP per SKU x Operational Time per SKU)

Avg. TMP Line =

kg/h.

Operational Time per SKU

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Explanatory Notes to Common Questions

Treatment of Changeovers and Cleaning
Changeovers and routine Line/CIP Cleaning, are activities that regularly take place during the
time the line is intended to be operated productively and which are necessary in order to produce
the required product formats with the required quality.
In highly utilized lines, they have to be carried out during normal operating hours and the times
are planned for as Routine Production Activities and, as such, included inside Operational
Time. However, some factories with low utilized lines may wish to carry out these Changeovers
and routine Cleaning activities during night shift and at weekends, done by different and/or
reduced group of people to the normal packing line crew and therefore allocate the time for those
activities to Planned non-Operational Time.
Within GROUPE DANONE Divisions, since flexibility is becoming increasingly important and
quick Changeovers and Short Cleaning times increase Production Time availability, the decision
has been taken that ALL Changeovers and routine Cleaning times must be closely monitored
and included in Operational Time (their impact will be seen in Operational Efficiency) and taken
as part of Routine Production Activities whenever they occur. This is to prevent inconsistencies
in reported efficiencies when some low utilized factories carry out Cleaning, for example, during
weekends and other fully utilized factories have to do it during Operational Time (this would
penalize the Operational Efficiency of the better utilized ones).

Production Efficiency vs. Operational Efficiency

For an overall assessment of factory performance OE, Operational Efficiency has to be the focus.
OE is also used to estimate long term Plant/Lines Capacity.
The routine production stoppages which adds for the difference between OE and PE are the result
of two factors:
(1) Number of planned routine activities x (2) Time required for each operation
(1) Managing the planned frequency for those routine activities can optimize factor (1) fe:
Number of changeovers? How often do we need to clean? This is normally tackled at
Supply Chain and Factory Management level.
(2) Shortening the times required to do each operation can optimize factor (2). This is the
task of Production + Maintenance +very often Engineering.
PE, Production Efficiency gives extremely useful information for the Production Line Teams
about unexpected breakdowns, unrecorded stoppages and the impact of waste generation during
production on machine time loss. PE gives the operators the possibility to control, analyze, act
and improve on their line. Planners and Schedulers also use PE for shift and short term Capacity
Planning.

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Treatment of long time BREAKDOWNS

When a line has a major breakdown, the time the line is stopped for this unscheduled
maintenance, must be included in Operational Time until the line is available for production again,
that is to say, that there is no difference between a short and a long unexpected stop. Remember
that CUTE is measuring the efficiency and utilization of the lines and NOT the labour. Therefore
this rule is not altered by reallocation of labour from the line that stops, to another line.

Does Overweight influence line Efficiency or TMP ?

Overweight is not influencing the line efficiency or the TMP. Overweight is influencing cost of the
product due to a variance in consumption of Raw Materials.
When we refer about TMP, we have to remember that what machines produce are pieces and that
the output in kg. is just a consequence of the different weight of the pieces. What we sell to our
customers are packs so that our factories need to produce a certain number of packs (no a certain
number of kgs.) in order to supply our demands.
Example:
1 machine x 100 strokes (packs)/min x 8 pieces/stroke (pack) = 48000 pieces/h
At specified weight of 25 gr./piece TMP = 48000 x 25 = 1200 kg/h
If there is 2% overweight, the machine will still produce the same 48000 pieces/h but with 25.5
gr./piece, so that you will be giving away 24 kg/h of Raw material as overweight. This does not mean
that the machine TMP is changed.

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CUTE (Capacity, Utilization, Time & Efficiency)

Implementation Guidelines/Requirements
1. To make sure that CUTE terminology is well understood by Managers and
communicated to workers.
2. Reliable data collected on selected points of each line. This should include
information about the waste generated and number of Changeovers.
3. Data must be true, recorded in real time and delivering Time Adjustment on
level not higher than 1-2%.
4. The Production Line Teams must be fully involved into the process.
5. CUTE reports ready for everyday production meeting and used during the
meeting to analyze the events and agree on corrective and/or improvement
actions taken on the production floor.
6. Factory targets followed in CUTE methodology on shift, day, week on longterm basis.
7. To follow-up weekly/monthly/yearly evolution of line results. Make results
visible (graphical representation) and available at the production lines.
8. To start use CUTE analysis for mid-term action plans during for example
weekly meetings.
9. Use CUTE learnings for Factory Budget and Masterplan projections.

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