A manufacturer asked us to help justify a capital request for a second production line. Their ERP reported machine utilisation at 78 percent, which made the case look straightforward.
We spent three weeks on the floor across all three shifts with a stopwatch and a clipboard, which is an unfashionable methodology. True effective utilisation was 51 percent. The gap was changeover time, an unbalanced shift handover, and an inspection step that quietly queued work behind one station.
Why the dashboard lied
It did not lie. It answered the question it was built to answer — how much time was the machine in a running state — which is not the same question as how much of that running time produced sellable output at the required rate.
- Changeovers were logged as running because the machine was powered.
- Rework was counted in output.
- The handover gap fell between two shifts' reporting windows and belonged to neither.
Instrumentation tells you what someone once decided to measure. It is not the same thing as knowing what is happening.
The second line was deferred indefinitely. Output rose 34 percent on the same equipment within five months. The most expensive part of the engagement was three weeks of a consultant's time standing next to a machine, which remains the most under-rated diagnostic technique in the profession.
M. Kapoor
Partner, Business Consulting & Strategy
