Capability analysis is a type of business tool that seeks to evaluate a production process based on the actual finished goods or services that are produced as the result of that process. The idea is to assess this output and make sure that the overall production is falling within what the company considers an acceptable range. The analysis will look at actual figures of production per hour, per shift, or per production day as well as the average for a longer period, such as a production week or month. If the capability analysis indicates that the production is below what is considered acceptable, this is in an indication that something about the process needs to be changed or adapted.
The concept of the capability analysis focuses on how efficiently a production process is actually producing results, usually in the form of finished products that can be sold to consumers. The evaluation will normally begin by identifying what is considered an equitable rate or level of production for a specific time frame. For example, the standard range for the production of widgets may be set at somewhere between 100 and 150 per hour, using the production process currently in place. The analyst will then review the activities of several hours, noting the actual production achieved during each hour. Since there is some expectation of variables that may cause production to be slightly more or less from one hour to the next, this is taken into account.
Typically, if the average production per hour for the period cited works out to something closer to 150 units per hour rather than languishing around 100, the capability analysis will demonstrate a higher level of efficiency on the production floor, indicating the process is serving the company well. At the same time, if the results of the analysis show that during certain hours the actual production fell under the minimum of 100 units, this may be cause for concern. Identifying the reasons for those slumps in production then becomes very important, especially if those reasons aren't due to isolated incidents such as the shutdown of a machine in order to make repairs.
The actual form of a capability analysis will differ somewhat from one business setting to another. This is because the underlying concept of making sure production is consistently within acceptable ranges can be adapted to just about any working situation. Manufacturers can certainly make use of this type of evaluation, even as the basics can also be adapted to assessing the efficiency of an administrative office, a retail floor, and just about any other business setting in which certain functions must be completed in a reasonable period of time in order for the company to remain profitable.
