Hidden factory

Hidden factory
See also

The hidden factory some Times called also hidden plant, stands for the unused factory capacity – maximum quantity of extra production that can be achieved without any additional investment. If the production goes 24/7 (no stoppage) means hidden factory is fully utilized.

24/7 production = fully productive time + lost time (hidden factory)

Term origin

Armand Figenbaum quality guru, had a big impact on popularizing term „hidden factory”. His point was to show un-tacked waste. He proven that up to 40% of the manufacturing plan capacity can be spent on ovehaul the things that supposed to be done right in the very begging. Idea was mainly to aim in quality, waste and the cost of it [1]. Over the years hidden plant concept expanded and all kind of waste during manufacturing process became incorporated. Four main loss areas have been distinguish:

  • Schedule (not scheduled production)
  • Availability (not running production due to materials)
  • Performance (limited production – machinery settings)
  • Quality (waste of finish goods)

Hidden factory true size

Calculating hidden factory size 24/7 production - fully productive time = lost time (hidden factory) Fully Productive Time is the amount of quality approved finish goods multiplied by Ideal cycle time, the cycle time of end to end manufacturing process resulting good quality finish goods Fully Productive Time = finish goods x Ideal cycle time

Factors identification

In order to fully utilize hidden factory all losses that happen during production needs to be identified. For every loss there should be implemented key performance indicator to measure losses and be able to improve it. There is a set of tools that are often used to identify factores[2]:

  • Total Effective Equipment Performance, calculate based on four factors, utilization, performance quality, availability
  • Overall equipment effectiveness, framework that calculates true productive planned production
  • Six big losses(tool to categorize losses caused by machinery/equipment)
  1. Unplanned Stops
  2. Planned Stops
  3. Small Stops
  4. Slow cycles
  5. Production Rejects
  6. Startup Rejects


Including hidden factory into fully productive time. There are meaningful effects that comes from hidden factory utilization[3]. The biggest advantage is performance (productivity) of the factory without any extra expenditures. The other wins that company is gaining is reduction of conversion costs, secondly capability of production became more flexible ( very important factor for fast-moving consumer goods business), improve planning process, savings on machinery as you gain capacity without any investments.


  1. Czabak-Górska I.D., (2017)
  2. Yarrow D.,(2010)
  3. Rødseth H., Schjølberg P., (2014)


Author: Bartosz Aleksander