Setup utilization as a performance indicator in production planning and control

In a work center where multiple products have to be processed, setups may absorb a large part of the total time that is available for production of items and execution of setups. The fraction of time that the machine is busy (the total utilization) is the sum of the fraction of time spent on actual production (the productive utilization) and the fraction of time spent on setups (the setup utilization). By processing the items in batches one can save setups. When capacity is fixed, the setup utilization is fully determined by the batching decision. In practice, examples can be found where the setup utilization is used as a guide for making decisions on batch sizes. In those cases management sets a maximum on the fraction of time spent on executing setups. In this paper we will substantiate this procedure by studying a queueing delay batching model. When optimal batch sizes are used in the work center, the implied setup utilization is less than 0.175. As a consequence, whenever the setup utilization is higher than 17.5% the batch sizes can be improved in order to obtain shorter expected waiting times in the queue.