Differences of installed capacity and utilization in the production process. As we know, an understanding of production capacity play an important role in the production process. Especially if we want to apply the working principles of kanban in the production process. The thing is, the understanding of the production capacity is also not easy. There are some parts that often people misunderstand when see it. This misunderstanding could be fatal, since it causes production projections were carried out not to be impressed. As a result, the target defined by management as if it could not be fulfilled. And then that became the black sheep of it all is the Ministry of production. In fact, most likely target is not realistic. For that reason, this paper will discuss about the installed capacity and utilization in the production process. Why? Understanding this will probably make you rethink about the production capacity of your machine that you trust. To dissect the difference between the two, let's compare the notion of installed capacity and utilization. Installed capacity In installed capacity, which we estimate is how many total capacity production results can be produced by the machine. Remember the key word here is total. We do not take into account kubikasi, factors, and other factors. We see here is how much total capacity. Utilization After we know the capacity of the terpasangnya, let us now discuss the utilization of production machine or work center. In principle the utilization of installed capacity, is it, how a product that really can be generated by a machine or work center it. For example, a machine installed capacity is 200 kg perhour, not necessarily utilisasinya also 200 kg perhour. Why? Because there could be other factors that affect the machinery to operate. For example the amount of downtime, the fact just enough to cultivate 4/5 of raw materials could generate 200 kg of the product. Things like that that often escapes observation PPIC. Yes, some of the PPIC often estimate the production capacity of its only based on installed capacity, utilization and data not from the engine running. historikal As a result, the target given to the production being unrealistic unwittingly by the own production. Why? Because all the realistic feel when viewing data terpasangnya capacity. But yes it is. .. Installed capacity many times greater than the utility itself. But often missed when viewed. So, with this, do you want to recalculate your production capacity? Because it turns out that the difference in production and capacity utilization in the production process turns out to be so. Or you since the beginning was deliberately giving a target of production which could not be achieved, so that does not need to give a bonus to your employees? Hehe. Hopefully this information is useful.