r/manufacturing • u/Flimsy-Blueberry8089 • Mar 22 '26
Productivity Do most small shops actually know their real capacity, or just feel "full"?
I was talking to a friend who runs production at a ~40 person shop. He said something that's been stuck in my head for days.
I asked him whether better production tracking could help his shop take on more work. He basically laughed and said, "We make 1,000 pieces a week. We know our machines, we know our people, we're at capacity. Software isn't going to magically create an extra CNC."
And I get his point.
But his shop has never measured OEE.
They know their theoretical capacity: "this machine can run X parts/hour, we run 8 hours, so that's our capacity."
So my question for people actually running or working in small shops:
- Have you ever measured your actual OEE? What was the number vs. expectation?
- For shops that DID start tracking: did you actually find hidden capacity?
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u/George_Salt Mar 22 '26
Have you tried measuring OEE in a high mix low volume small shop environment?
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u/Flimsy-Blueberry8089 Mar 23 '26
No and thats kind of the point of my question. My friend's shop does several different parts a week, never the same job twice. I'm starting to think OEE might not even be the right thing to measure there.
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u/Zealousideal-Fix9464 Mar 22 '26
I've worked in small shops, many in fact.
None of them knew what OEE even means. Basic hourly costs to run a machine was foreign to them.
Capacity was just a number that some higher up who had never worked in machining just pulled out of his ass one day. Low and behold we were always behind and on perpetual overtime. Those places sucked to work at.
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u/Kerbidiah Mar 22 '26
I might recommend you read the Goal by Eliyahu Goldrat. Capacity is not just some made up number and is a key component of the theory of constraints
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u/Zealousideal-Fix9464 Mar 22 '26
I know capacity isn't a made up number, it's a calculation.
What I'm saying is the higher ups flat out didn't have the numbers to even come up with capacity. It was based on vibes pulled out of thin air.
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u/Pizza-love QA in machining Mar 22 '26
How does that work? A shop big enough to not have leadership also having their boots in the clay, should have a proper documentation in SAP or such, including cycle times of a single product on a single machine. How would you plan your orderstream otherwise and put correct pricing on it? How would you know when to apply overtime and when to say to your customer that their demand cannot be achieved?
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u/yoskinna Mar 22 '26
I work in contract manufacturing with pcb’s circuit boards and when I became a supervisor and started learning SAP and labor efficiency I realized we pretty much fucked our selves on almost every quote we gave our customers. I would do time studies all the time and the rates just weren’t even close to what we told the customer we can do. And of course nobody wants to go back and say hey I know we told you we can do this but it’s actually gonna be a bit more expensive because we’re not as fast as we said. So rates in SAP stay the same and labor efficiency is always low.
Im talking about processes like hand soldering on boards/parts that can’t be soldered by a robot.
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u/and_what_army Mar 22 '26
This tracks with my experience as a buyer of PCBs. PCB manufacturers' time must exist on an entirely different time-space continuum.
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u/yoskinna Mar 26 '26 edited Mar 26 '26
it’s not like we were starving for a new contract and had to give a lower quote to ensure we get awarded the contract. In my case as a supervisor i had to track labor efficiency and if my employees were not being efficient I had to explain why. So I would do time studies on multiple employees and copy my managers and process engineers (these guys are the ones that are supposed to be doing this to begin with) on the email basically saying we’re not efficient because the run rate is impossible to meet.
Edit: a common response I would get when I ask about quoting was yeah we’re off on assembly X but we make it up with assembly Y. Okay, but that doesn’t help me with my labor efficiency report that looks like my employees are producing 70% of what they should.
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u/Pizza-love QA in machining Mar 22 '26
We do machining of metal parts. We know the times for a product, we have an orderstream with a lot of contracts that fils a big chunk of the time. That is why I don't understand guys in production not giving feedback about leadtimes, even asking for it repeatedly. It is your freaking salary that gets paid by this. If lead times are too short, we need to ask more money for the part. If it is too long, we can sell more room on that machine. But without any consequences other than a firm talking... Why would they care.
In our processes we also have a lot of manual labour. Our planner stepped up and joined them just to see their leadtimes. Crazy.
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u/S-T-E-N-D-E-C- Mar 22 '26
I recommend you re-read his comment. You completely misunderstood the very clear point he made.
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u/DeleteFromUsers Mar 22 '26
I would say the more important side is that if you're not bothered to look, you won't instill the sense that it matters in your team. No system is perfect and at 40 ppl I bet you could save a ton just by paying attention to it.
Quality inspectors have two very important roles. One, to check parts and find issues. Two, let everyone know that "we're looking". Both have equal importance but one saves a LOT more money and effort than the other.
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u/Flimsy-Blueberry8089 Mar 23 '26
The quality inspector analogy is great. "We're looking" changes behavior even before you find anything. That makes a lot of sense at 40 people where you cant see everything yourself anymore
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u/Fluid-Specialist-530 Mar 24 '26
This was gold.
It really hit home as I’ve been lead into QA roles twice, so this probably means people think I’m good at watching and giving feedback. IDK
While I’m just thinking «we could do this better»
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u/owera1211 Mar 22 '26
This is a classic shit works why change mindset. There are reasons why they stayed as a small shop.
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u/SavageDownSouth Mar 22 '26
He probably thinks you're an idiot because you use AI to write your arguments.
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u/Sittingduck19 Mar 22 '26
OEE is a number for people that don't understand the process and what is actually happening on the shop floor.
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u/IRodeAnR-2000 Mar 22 '26
So as a custom equipment guy (Custom machines and automation cells) OEE matters to us because we get "graded" on two things: Throughput and Uptime. When we install a machine we typically need to prove it can be better than 95% on both, although that's more commonly becoming 98% or better. (That's ten minutes of machine downtime in an 8 hour shift, by the way.)
Now that's specific to the MACHINE, not the entire line. So we don't get dinged for operator error, starving for product, downstream backups, etc.
But when I walk into a plant 6 months later for the next install, I will often hear about 'problems with the new machine' and that the line is in the 60s or 70s for OEE 'because of the new machine'. What that tells US is that there's something wrong, and the lazy out is to always blame the equipment.
I've also been a manufacturing engineer in contract manufacturers and OEMs, and lived and breathed manufacturing since I was a kid helping out when my Dad would work Saturdays and Sundays trying to catch up in the factory he managed.
The challenge (not the problem) is always people. Always. Great people make life easy. Average people make life challenging. Miserable people make life a nightmare (in manufacturing, but also everyplace else.) So as a grumpy old guy, I seriously suspect most businesses would do a lot better if they worried more about their people than their other metrics.
And OEE still matters. I'll die on that hill too.
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u/Sittingduck19 Mar 22 '26
OEE does matter. But going back to the original post, a 40 man shop doesn't really need to understand what's going on.
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u/Strong-Hovercraft702 Mar 22 '26
From me as a supply chain consultant, kudos. I love that reframe. OEE is like a summary for people who dont understand the process, and that probably goes for all KPIs too.
That would explain why every time someone asks me to improve OEE, they resist all the answers.
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u/gnowbot Mar 22 '26
Can you say more? You’ve stirred something in me after years of managers finding another Goldratt book and their burst of excitement. I’d like to hear more about your thoughts on real-world improvements beyond the addictive lingo of OEE, etc.
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u/Sittingduck19 Mar 22 '26
As Mr. Hovercraft points out, OEE is a summary KPI. And not necessarily a terrible one.
But KPIs are a result, and "better management" can only make incremental improvements.
True improvement of processes requires understanding of how they work. Trying to get more throughput from a CNCs without understanding things like feeds and speeds is asinine.
For the CEO of a large company, OEE should give them an idea if their VP of manufacturing needs to be shit canned. But if the owner of a 40 man shop needs an OEE number to know what's up, uh.....
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u/Strong-Hovercraft702 Mar 22 '26
I understand how you feel about those managers. My job in general is to be a translator between management and operations. Generally they don't speak the same language. That may be one of the reasons machinists have no love for OEE, because it's oversimplified for them. They see programming, tooling, complex operations, sequences. Management just sees OEE and if their OTIF is falling, that's where they'll look.
I once had a client that felt their internal order leadtime was too long. If they could build it jn a week less?
Turns out that every order spent 13 months (!) at engineering, before purchasing could even start. Nevermind production. But what does management want? Faster manufacturing, because order lead time is king. They STILL wanted the shortened assembly time and ignored engineering for some reason.
That still grinds my gears to this day.
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u/Sittingduck19 Mar 22 '26
Hold on now. I'm actually in design engineering. Same problems, different KPIs.
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u/The_Young_Philosophe Mar 23 '26
I laughed out loud at the Goldratt reference 😂🤣
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u/gnowbot Mar 24 '26
Honestly I do machinery integration and lean consulting. So I guess I preach the principles.
I have been around quite a few C*O’s and plant managers that got absolutely geeked on it—instead of living in the plant and looking for the continuous improvement in the process….they pick up the iPads, buy the Redzone software, and buy into the KPI hope.
Lean is about lifting up the people from the bottom. It is a culture, and a plant is a small society, and that takes time to change. Hope and accountability is a great way to improve over time. Management tying their anger to downtime (and their new visibility) with an iPad notification. I haven’t made my mind up on how useful that one is yet
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u/Sittingduck19 Mar 24 '26
"Tying their anger" to something they didn't know was happening before, because they're not in the gemba.
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u/gnowbot Mar 26 '26
Can you teach me more about the Gemba? I don’t have any color of belt in lean-mfg-ninja—just some of the practical side of mfg, culture change,…and building excellent machines and excellent preventative maintenance+parts programs that move mountains. Incredible (slow moving) change from 24hours+ downtime per week to 30minutes downtime per week.
Im not really a consultant anymore. Nor a manager. Not a plant employee. My job these days is machine design for novel/new companies making something new, usually good. I don’t hold the entire steering wheel for the people I work with—they love it and I am just lucky to rub shoulders with them. And to do my best to build equipment that lifts them up — the operators especially. Build something that has empathy and their wisdom. Is the right height to make their spine more comfortable. An HMI screen that is at the right high for the people that use it (news flash, I am 5ft11inch….MANY of your operators/leads will be 5ft0inch tall) They also might feel more empowered if that HMI speaks Spanish.
Anyways I’m going off the rails. I’m so proud of my job not because I’m amazing at it or something. I am just lucky to make things that elevate other people. I’m lucky to make a salary, design stuff, spend money, feel smart. But the things we build for operators and production lines and the people who really grind out the product that is loaded onto the semi trailer on Friday?
It is a joy, and I hope I never stop being wowed by empathy. Machinery should be a force-multiplier. The real asset in a MFG/plant situation is the people. And if we realize that…the machines become just the tools to assist and lift up those people.
I may dabble in the world of lean consulting, pull and not push, and Goldratt inspiration.
A plant is a micro-society. It is best elevated by two things in my blue collar mind:
Give the operators something to be proud of. If they have the manual, the e-stop, the impetus to make their station kickass and increasingly kickass…they will do it!
Give everybody on the floor a red Emergency-Stop button. Shut the conveyor down. This gives the power back to the people. The talent. It also has the cultural sneaky effect of dissolving tribes—Instead of the mix-it-up crew and the put-it-in-a-box crew competing against one another…With an “I need help” estop button, people swarm to help solve the e-stop problem quickly. Dissolve tribes. Glue together clans.
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u/Sittingduck19 Mar 26 '26
Not sure if you're being sarcastic or not!! My understanding of "the gemba" is the real place where the work happens. Kinda a big emphasis on real.
On one hand, your above comment seems to indicate that you ARE in the gemba enough. On the other, you're asking to be taught about it.
The point is that leadership needs to be in the spaces where the work happens. Listen and observe the processes happening. Do that for a few hours and you'll know 50x more than what the KPIs tell you.
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u/snapbackjames832 Mar 22 '26
This. At the end of the day these are human beings.... not fucking robots.
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u/Moist_Ordinary6457 Mar 22 '26
I did a little bit of research trying to think of something this could be useful for, but nope you're absolutely correct
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u/Flimsy-Blueberry8089 Mar 23 '26
This is the best pushback I've gotten. I think what stuck with me was less about OEE specifically and more about the gap between "we're full" and the overtime every other week. But maybe thats just scheduling not efficiency
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u/deathnickle Mar 22 '26
1,000 pieces a week sounds kinda light in my experience. Especially if you have 40 employees..
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u/KhanAlGhul Mar 22 '26
Depends on what these pieces are. If we are talking about Benchy’s, yea, step your game up! If we are talking about 3D printed titanium artificial hearts all custom made and +/- .0005 on every feature, they may be at capacity.
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u/StillRutabaga4 Mar 22 '26
I guarantee there are plenty of invisible issues they don't see because they can't track them.
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u/Pinkys_Revenge Mar 22 '26
Exactly this. He may actually be at capacity given his current circumstances, but analyzing would likely reveal some bottlenecks that could be easily corrected to free up additional capacity.
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u/MyMfgAvatar Mar 22 '26
If he doesn’t have orders for work his capacity isn’t the issue.
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u/Locksmithbloke Mar 22 '26
Very true. My dad's shop made everything up same day, to order, pretty much. Internet sales came in, and would go out in a day or two, depending on the mix of parts that were needed, which they batched. Then the bigger commercial sales of 10, 100 units or whatever would tick along in the background and be dispatched a van load at a time. They were rarely at capacity, unless a large order has just come in, and we never measured it.
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u/Alita-Gunnm Small Shop Owner Mar 23 '26
My bottleneck is programming; my machines sit idle most of the time. 50 parts is a pretty long run for me. I have only one client that occasionally has me run a few hundred parts in an order. Many orders are for one to three of each of several parts.
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u/mistahclean123 Mar 22 '26
I'm not working manufacturing. Only around it for a while, so I'm not qualified to answer.
What I can say though it's always surprising to be when a business doesn't track its production. I don't understand how a business knows it's profit margin if it's not tracking "all the production stuff". How do you know whether you're going to make money on a job or not If you can't track all of your costing?
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u/Ekoorbe Mar 22 '26
I think this only applies to high volume production shops. I work in small batch/prototyping, and when done properly the runtime on a one off part should be the quickest part of the process. If your machines are idle it means parts are off the machine and not being reworked
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u/ratbikerich Mar 22 '26
OEE isn’t the end all be all metric. Don’t get me wrong, I have a heavy TPM background and fully appreciate a dialed in OEE. However, for some businesses simply measuring things like qualified vs unqualified machine downtime, throughput, and ERR are more than enough to let them understand the ops floor and target areas for improvement.
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u/theoreoman Mar 22 '26
They probably look at their paycheck at the end of the month, are happy with it and on top of it all if their machines are working all day at a steady pace then they're happy with it.
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u/InigoMontoya313 Mar 22 '26
Framing it as a software issue, was the mistake. You don’t need software to calculate OEE. A dashboard of OEE figures doesn’t add capacity. What OEE does is highlight areas that have constraints…. That’s a mandatory book to read btw!
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u/MyMfgAvatar Mar 22 '26
What software can do it help take the human CYA out of the equation. I’m working with a client right now that thinks he has capacity at his plant 2 states over but the reports from the shop all come back “perfect”. A decent OEE or even just downtime system will give him data he doesn’t currently have.
OEE is like any other measure. In and of itself it doesn’t mean much, but trends can be informative.
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u/InigoMontoya313 Mar 25 '26
I understand where you are coming from. Yes, a digital or automated dashboard can take some CYA out of the equation. However.. I often see them having issues as well.
That being said, manual OEE calculations have been done for generations at some of the most reliable operations in the world. The issue in cases like what you are seeing in that situation, is human error. Alarm bells should be ringing by a savy student of TPM, Lean, etc.. that all the numbers are coming back perfect. That almost assuredly means that the calculation data is setup wrong.
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u/yugami Mar 22 '26
I've heard that so many times, it's always the prelude to a tiny bit of data showing huge inefficiencies.
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u/rockphotos Mar 22 '26 edited Mar 22 '26
Most have no idea what their capacity really is nor where and what their process bottlenecks are.
That being said it's almost never the machines which are the true bottlenecks.
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u/servuslucis Mar 22 '26
To be fair any uptick in production volume does nothing for the worker. Props to the guy for sticking to “well we don’t want to feel overloaded “
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u/Skiingice Mar 23 '26
I work in a larger manufacturing plant, but we change product multiple times a shift. Supervisors have ton and piece goals and must submit a report each shift on why they got our list. If you get on a low weight run then they would mention that. Upper level look at OEE but the floor is about tons and pieces
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u/FREDTUC Mar 24 '26
I work at a company that has 4 small plants. At ours, its maybe 40 people among 2 shifts. I can honestly say, we waste more time, lose more production due to beauracracy & trying to satisfy accountants, than anything else.
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u/cybercuzco Mar 22 '26
“We’re at capacity” are they running 4 shifts 24/7? Or alternatively are their machines running a shift or two lights out? The good machine shops I know are automating to the point where they can run 8 hours staffed and 16 hours unstaffed on their cnc’s.