What is the Best Factory Size?

When planning a new factory, product cost and total fixed cost obviously depend on the factory's planned capacity. The larger the factory, the more economies of scale will lower product cost. However, large factories require more capital equipment. To quantify these effects, use Factory Explorer®'s Product Cost & Total Fixed Cost vs. Start Rate Chart, shown below for Factory Explorer®'s sample Aspen model (based on data from SEMATECH's set4 testbed dataset). These results were generated using capacity analysis - no simulation was required.

Factory Explorer®'s Product Cost & Total Fixed Cost vs. Start Rate Chart
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Product Cost & Total Fixed Cost vs. Start Rate Chart, Aspen model. This chart quantifies the tradeoff between factory capacity, product cost, and total fixed cost. For this analysis, a minimum toolset is generated for each start rate, based on a suggested capacity loading% of 85% (this figure can be controlled with run-time options). Economies of scale are much smaller above 2,000 unit starts per week, while a $40,000,000 factory can support approximately 1,500 unit starts per week.

The Factory Explorer® Advantage

Starting with a factory model and with the question What is the Best Factory Size?, it takes only a few minutes to generate the chart above. You specify the number and range of release rates to investigate, and tell Factory Explorer® to use its own calculated minimum toolset rather than the toolset specified in the factory model. For each release rate, Factory Explorer®'s capacity analysis engine generates the toolset, costs it out, and performs detailed product cost analysis (if you choose to model operators, Factory Explorer® can also generate minimum staffing levels and include them in product cost). Factory Explorer®'s chart engine automatically creates the output chart. Now you have the information you need to make a strategic business decision. What's more, it's easy to iterate this analysis for different business assumptions (process learning, tool availability, etc.) since each iteration is so fast. Getting to the answer has never been easier.

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