Utilization Gains and Purchasing Savings: Use the Right Basis

Start by deciding whether the comparison fixes raw input or finished demand. The two methods answer different questions. The 94.5% and 99.6% values below are hypothetical teaching assumptions, not standard manual-shop performance or Chituo project results.

Divide fixed demand by utilization

Here, utilization means qualified finished weight divided by raw input weight.

Using unrounded figures, the input difference is about 54.18t, or 5.12% of Option A’s input. The utilization gain is 5.1 percentage points. If both options instead receive 1,000t of input, their outputs are 945t and 996t: a 51t output difference.

Keep remnants and money separate

Reusable remnants remain inventory. A measure that includes reusable remnants is not the same as finished-product utilization. Use the same theoretical or measured weight basis on both sides.

Multiplying the input difference by a steel price estimates part of the purchasing change. Net project benefit also depends on remnant value, custom-length premiums, freight, inventory and equipment or software costs.

Compare against your previous cutting plan

Use the same anonymized cut list, the previous patterns, the proposed patterns and the destination of remaining material. Without an old plan, compare stock-length options first rather than inventing a manual-waste baseline.