In my first month as an Operations Manager back in 2009 at an Automotive and Architectural Glass company, I faced a situation that completely shifted my perspective on productivity.
One day, a Marketing staff member hurried over to the production line, handed the Quality Inspector a stack of yellow pad sheets—three pages, back-to-back and labeled them “URGENT.”
Curious, I asked the Quality Inspector, who reported to me, “What’s all that paperwork?”
“These are today’s priorities,” he replied.
Something didn’t sit right. So, I asked him to follow me. We walked straight to the warehouse, and I turned to him.
Me: What do you see?
QA: Inventory, Sir. A lot of inventory.
Me: If the warehouse is overflowing, why do we have three pages of urgent priorities?
QA: I don’t know, Sir. I’m just following instructions.
That was my lightbulb moment. I immediately called the forklift operator and told him, “Bring out all inventory older than 30 days and stack it in the covered court, right in front of the Marketing Office.”
Then, I marched into the Marketing Director’s office—who also happened to be the General Manager and laid it out plainly:
“We have a big problem. The warehouse is full, the backlog is growing, and your team is flooding my production line with so-called priorities. They’re disrupting operations.”
I walked to the window, pulled the curtain aside, and pointed to the mountain of inventory now visible in the courtyard.
“That’s our cash,” I said. “And it’s stuck. Please tell Sales and Marketing to sell all of it.”
My boss looked at the scene and nodded. “You’re right. That’s inventory carrying cost.“
I held up the thick priority list. “What should I do with this?”
His answer was simple: “Throw it in the garbage.”
The Fix
I knew we needed a better system, so I implemented a structured planning process. I created a shared folder with a demand file, giving Sales and Marketing a clear rule:
- By Tuesday, they had to input their real customer orders up to the maximum capacity for the week.
- Anything beyond Tuesday? It would roll into the next week’s shipment.
The results were immediate. Warehouse inventory shrank. Backlogs vanished. In just one month, chaos turned into efficiency.
The Lesson
High utilization sounds great—until you realize it’s meaningless without real demand. If production is running at full speed but the output just sits in a warehouse, you’re not making money. You’re just tying up cash in unsold goods. The real measure of throughput isn’t what you produce—it’s what you sell.
So, is high utilization good? Yes, but only if it drives actual sales. Otherwise, it’s just waste.
Engaged 