In a recent piece from Industry Week, Christopher Tang put the problem plainly: the U.S. is consuming some critical defense products faster than its industrial base can produce them. It’s a reality that aerospace and defense (A&D) manufacturers are grappling with in real time. And it’s not a simple fix. Replenishing those products requires factories, tooling, suppliers, and skilled workers.
A&D demand is strong, backlogs are long, and the pressure to ramp up production is being felt across the industry. New factories and production lines will eventually need to come online, but that capacity takes time and won’t solve the constraints companies are facing today. For now, the faster lever is to get more out of the factories that already exist.
What is hidden capacity in manufacturing?
Manufacturers often measure capacity in terms of facilities, machines, workers, and available hours. Output falls when materials are unavailable, engineering changes arrive late, quality problems require rework, or employees must search for the information needed to complete a job.
Manufacturing researchers define “hidden capacity” as production time lost to non-value-added work. I want to be careful here, because “hidden capacity” can sound like consultant-speak for something that isn’t really there. It is real. It just doesn’t show up on the reports most manufacturers are looking at. A 2022 study published in the International Journal of Production Economics examined losses buried in routine production processes. The researchers found that removing non-value-added activity can increase output without additional capital investment.
Other researchers developed Overall Throughput Effectiveness to identify bottlenecks and hidden capacity across an entire factory. Equipment-level measurements alone may not reveal where production loses time, so the method measures constraints and productivity across the production system.
A factory can have all the people and equipment it needs and still underproduce, simply by losing productive time each day. Identifying where that time goes can reveal ways to increase output now, even before manufacturers add new facilities or equipment.
How do connected systems increase factory output?
Manufacturing information moves between design systems, ERP, scheduling, quality, and the shop floor. The people executing the work depend on that information being accurate and up to date. When those systems are disconnected, employees must move information manually and resolve inconsistencies as they arise. That makes it harder to identify where production time is being lost.
In Data-driven algorithm for throughput bottleneck analysis of production systems, researchers used real-world manufacturing data to identify bottlenecks based on machine activity. Their work showed how data already captured by manufacturing execution systems (MES) can support automated bottleneck detection and better shop-floor decisions.
Production constraints can shift as material shortages, equipment problems, and scheduling conflicts emerge. By linking enterprise plans to production activity, MES gives teams current work instructions, production status, and quality information so they can identify the constraint limiting throughput, reduce delays, and make better use of existing resources.
Productivity depends on the whole production system
Manufacturing capacity depends on the entire production system, not just available equipment and labor. Machines sit idle when materials are late, while skilled employees lose production time resolving documentation problems or waiting for current instructions. Quality issues consume additional labor and machine time through inspection, rework, and scrap. These losses reduce the output a facility can produce with the resources it already has, even when staffing and equipment appear sufficient. Improvements in quality and production execution can preserve capacity and support delivery performance.
How does MES help identify production bottlenecks?
Factories depend on suppliers with their own equipment, skilled workers, and production constraints. So, connecting planning and execution across that network gives teams earlier notice of material shortages, order changes, and upstream delays, helping them respond before a critical component limits production.
In an iBase-t and Synchrono customer case study, a large A&D manufacturer was relying on manual, spreadsheet-driven planning and had limited visibility into bottlenecks and order status. The company integrated advanced planning and scheduling technology with Solumina MES to synchronize planning and production in real time. iBase-t reports increased throughput along with improvements in schedule attainment and delivery performance.
Where should manufacturers start?
My advice? Manufacturers can start with a production constraint where additional output has clear business value, such as a line with a persistent backlog or a facility struggling to meet its schedule. Production data can show where time is being lost and which changes are most likely to improve performance.
Throughput, rework, cycle time, schedule attainment, and delivery performance can show whether the operation is using its resources more effectively. Results from an initial implementation give leaders evidence to guide further investment and expand improvements while longer-term efforts to strengthen the industrial base continue.
Strengthening the industrial base we have today
Christopher Tang is right that rebuilding American manufacturing capacity will take sustained, long-term investment. But manufacturers don’t have to wait for new factories to start closing the gap.
Existing factories can produce more today by recovering the hidden capacity they already have. Studies of hidden capacity identify production time lost to non-value-added work, and research using MES data shows how manufacturers can more systematically locate throughput constraints. Connected manufacturing execution helps companies use that information to address delays, quality problems, and other sources of lost production time.
