Operational availability versus occupancy

Operational availability is the proportion of time a machine is operating properly at the time it is needed, expressed as a percentage. Utilization rate is the proportion of time within a given period (shift, day and so on) that a machine is used to make something. 

Operational availability illustrates the difference between the two terms. The operational availability of the car is the percentage of time the car is operating properly when needed. Utilization is the percentage of time per day the car is actually driven. 

Lean thinkers use the distinction between the two terms to illustrate a pitfall in traditional thinking about efficiency. From a Lean perspective, high utilization rates are not necessarily desirable. Whether utilization is good or bad depends on whether the equipment produces exactly what is needed (good) or overproduces (bad). In contrast, the ideal operational availability is 100 percent, because it indicates how well a machine is operating at the time it is needed. 

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