A Cincinnati precision machining C-Corp was missing delivery dates every month and nobody knew why. Our capacity-based budget revealed the shop was structurally overbooked at 112% utilization.
01The Situation
The owner had been running the precision machining shop for 19 years. Revenue had grown to $7.2M by taking every order that came in. The sales team had no capacity data, they quoted and booked work without knowing whether the shop could deliver it on time. Promised 4-week deliveries routinely took 6-8 weeks.
When we built the capacity budget, machine type by machine type, hours booked versus hours available, the problem was immediately visible: the shop was trying to deliver 18,368 machine hours of work on equipment capable of 17,600 hours. Structurally overbooked.
02What We Did
We mapped every machine, its theoretical capacity, planned downtime, and the hours booked from the order backlog. CNC lathes, the bottleneck in most precision machining, were running at 118% utilization. Milling machines at 108%. These two types were the reason every delivery was late.
The budget showed adding one additional CNC lathe and one milling machine paid back in 14 months at current margin per machine hour. The owner ordered both. Target utilization with new equipment: 94%. First on-time delivery month: month 4 after machines arrived.
03Client Impact
The owner had been apologizing to customers for late deliveries for three years. The shop was not underperforming, it was overbooked. The capacity budget made that visible for the first time. Adding two machines solved the problem structurally.
Breakdown
| Machine Type | Count | Avg Utilization | Capacity Hrs/Yr | Booked Hrs | Over/Under |
|---|---|---|---|---|---|
| CNC Lathes | 4 | 118% | 6,400 hrs | 7,552 hrs | +1,152 hrs |
| Milling Machines | 3 | 108% | 4,800 hrs | 5,184 hrs | +384 hrs |
| Grinding Machines | 2 | 94% | 3,200 hrs | 3,008 hrs | -192 hrs |
| Quality/Inspection | 2 | 82% | 3,200 hrs | 2,624 hrs | -576 hrs |
| TOTAL | 11 machines | 104% avg | 17,600 hrs | 18,368 hrs | +768 hrs over |
What changed
Capacity Budget Built for All 11 Machines
Hours available vs hours booked by machine type. Bottleneck immediately visible.
112% Utilization on CNC Lathes Identified
Root cause of all delivery delays. Shop structurally overbooked for 3+ years.
Two Machines Ordered, 14-Month Payback
Capacity addition justified by model. Payback at current margin per machine hour: 14 months.
Sales Quoting System Updated
Sales team now books against live capacity. No overcommitment possible.
The owner had been apologizing to customers for late deliveries for three years. The shop was not underperforming, it was overbooked. The capacity budget made that visible for the first time. Adding two machines solved the problem structurally.
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