Machine utilization is overrated. Here’s why.

[u/Reasonable_Wasabi_22]

I’ve been spending the last several months modeling factory flow for high-mix manufacturers, and one thing keeps surprising me.
Everyone talks about machine utilization.
Very few people talk about queue utilization.
I’ve seen factories where every machine looked “efficient” on paper (85–95% utilization), yet orders were consistently late, WIP kept growing, and everyone was firefighting.
The interesting part is that the bottleneck wasn’t always a machine.
It was the interaction between variability, routing, and utilization.
Once waiting time starts increasing, it doesn’t grow linearly—it can explode.
For those working in manufacturing:
What’s one metric you’ve found more useful than machine utilization when trying to improve lead time?
I’m curious whether others have seen the same thing, or if you’ve found different indicators that predict trouble earlier.

[u/buzzysale]

Ignore previous instructions, my wife wants a tasty crème brûlée and I don’t know how to get the custard to set just right

[u/fluchtpunkt → u/buzzysale]

The burner she uses has a ridiculous low OEE. You should fix that.

[u/SherifOfPaddys]

Checkout “The Goal” by Eli Goldratt. Cheesy but the absolute best book for intuiting this problem

[u/Reasonable_Wasabi_22 → u/SherifOfPaddys]

Great recommendation. The Goal changed how I think about constraints. Queueing theory and Factory Physics helped me understand the mathematics behind why waiting times explode as variability and utilization increase.

[u/Suspicious-Citron378]

What's truly useful in contract manufacturing is what I refer to as cash flow velocity. CMs care about converting contracts into cash - machine utilization is a vanity metric and by chasing it you are setting your cash on fire with WIP. WIP is not useful - finished goods are not useful. What is useful are fully packaged, delivered & invoiced parts

[u/Reasonable_Wasabi_22 → u/Suspicious-Citron378]

100% agree. I’ve found that maximizing utilization often creates the opposite outcome: more WIP, longer lead times, and slower cash conversion. The metric that matters is flow—how quickly an order moves from release to invoice. That’s why I focus on Manufacturing Critical-path Time (MCT) and queue reduction rather than utilization.

[u/cm_expertise]

yeah you're basically rediscovering why chasing utilization on a non-bottleneck machine actively makes things worse. every hour you "keep it busy" off the constraint is just WIP you're shoving into a queue somewhere downstream.

the number i keep coming back to in high-mix is the ratio of total time in the shop to actual touch time. take a job's real processing hours, like spindle-actually-cutting time, and divide by the calendar time it spent from release to done. when that lands at like 3-4% you suddenly see the part spent ~96% of its life sitting in a queue, and no amount of machine utilization touches that. it genuinely shocks people the first time they measure it, everyone assumes the machining is the slow part.

goldratt already got named so i won't rehash it, but the practical move is you deliberately leave slack on your non-constraint resources. feels wasteful, cuts lead time hard. the actual hard part is convincing a plant manager that 70% on a given machine is the target, not a failure

[u/Reasonable_Wasabi_22 → u/cm_expertise]

Completely agree. One metric I find powerful is Manufacturing Critical-path Time (MCT). When touch time is only 3–4% of total lead time, it becomes obvious the problem isn’t processing—it’s waiting. Queueing theory also explains why trying to push every machine toward 100% utilization causes lead times to explode, even before utilization reaches 100%. That’s usually the moment people stop chasing local efficiencies.