Some manufacturers have the opposite of a sales problem. Quotes arrive faster than the plant can run them, lead times are stretching and the leadership meeting keeps coming back to a second shift or a new machine.
Across the industry, the outlook points the same way. In the National Association of Manufacturers’ survey for the third quarter of 2026, respondents projected sales and production to grow at the fastest rate in more than four years. The association’s chief economist put it this way:
Strong demand is fueling a notable increase in anticipated sales and production growth, both projected to rise 4.3% and 3.8%, respectively, the highest growth rates for both indexes since Q2 2022.
Before you add capacity, look at what the capacity you already have is spent on. When every line is full, it is easy to assume every order on it has earned its place. Some of it has not, and a busy plant makes that hard to see.
A full order book hides thin work
The costs of complexity are usually hidden, so executives often don't grasp the magnitude of the problem until a downturn hits and businesses start feeling strong pressure on margins and profits.
In a strong year the income statement looks good, the floor is busy and nobody is asking which orders pay. The work that pays badly is still on the schedule. It is taking hours that better work could have had, and the cost shows up as longer lead times and turned-down quotes rather than as a loss on any report.
The instinct in that position is to run harder, with overtime and expedites. That buys output this week, and it spends more of the plant’s scarcest hours on orders nobody has checked.
Where the hours go
Every plant has one place that sets its output: the machine or line that everything else waits for. Call it the constraint. An hour it spends on one order is an hour no other order gets, so the useful question about any order is what it earns for the constraint hours it uses.
Those hours depend on more than run time. Short runs bring changeovers, first-piece checks and breaks in the schedule. Standard cost usually spreads that time across everything instead of charging it to the order that caused it, for reasons we set out in Your standard costs cannot tell you which work pays. Plante Moran describes the effect in terms of overall equipment effectiveness (OEE):
High volume parts often subsidize the OEE impact of changeovers on low volume parts when no change-over time is considered.
So an order that looks profitable on the quote can be one of the most expensive things on the schedule, once you count the hours it takes from better work.
Rank the work by what it earns per constraint hour
You can do the first version of this with numbers you already have.
- List what runs on the constraint. Every customer and part family, with the hours each took there last year, setups included as far as your records show them.
- Divide revenue by those hours and sort. Revenue is a fair place to start because no overhead rate distorts it. Cost the top of the list on actual materials, setups and scrap as you go, because a part that is mostly bought material can rank high on revenue and earn little. Move to gross profit per constraint hour as those numbers firm up.
- Look hard at the bottom of the list. Those orders return the least for each constraint hour they use. Some should be repriced, some moved to another machine or an outside shop and some kept on purpose. Plante Moran names fair reasons to keep low-margin work, such as “securing a sales foothold with a prospective customer.”
The hours that come back from the bottom of the list go to the orders at the top, and to new work that would rank there. Run this before approving the next machine. It shows how much of your current capacity is spoken for by work you would not choose again.
Screen new work before you quote it
With demand strong, the bigger decision is what to let in. Every new quote is a claim on constraint hours, so put these questions into the quoting routine:
- How many constraint hours will this take, setups included?
- What will it earn per hour at today’s material and labor cost, rather than the standard?
- Would it rank above the work it will push out?
A quote that fails the screen can still be won, at a price that pays for its hours or on a date that fits the schedule.
Keep the ranking current
One ranking goes out of date as prices, material costs and the mix move. Rerun it monthly, give it one owner and make the screen part of quoting so it happens without a meeting. We wrote about why one-time efforts fade in Why cutting one item at a time fails, and what to do instead.
Where to start
The Growth Check takes about fifteen minutes. One of its questions asks: if revenue doubled next year, which costs would double with it, and which ones should not have to? For a plant that is already full, the first answer may be that you could not ship it. Put that in your answer. It tells us where to look first, and we read every response ourselves and reply by the next business day with what stood out.