Example of a Production Process

To make this documentation easier to follow and to help explain how Production Analyses can be used to evaluate production processes, in this topic, we provide an example of a simple production process. We will refer to this example throughout the Production Analysis documentation as necessary.

Consider the process of manufacturing bottled water, which might consist of the following steps:

Collect water from spring.
Fill bottles.
Attach labels.
Attach caps.
Sort bottles, discard any that fail quality inspection, and package for shipping.

All of these steps must be completed in order to produce a finished product. In our example, the production unit consists of the individual pieces of equipment that together perform the steps in the process. The production output of this unit is a bottle of water ready to be sold.

For our example, we will assume that we collect production output as the number of bottles produced per day. We will also assume that we began producing bottled water on January 1, 2000. Once a year we generate a Production Analysis to evaluate the actual production output, to calculate losses compared to the ideal production output, and to establish goals for improving production the following year.

Note: This example is extended in the Production Loss Accounting (PLA) documentation. The PLA documentation assumes that a separate facility has production units that create bottles, labels, and caps and distributes them to the facility that performs the process described above.