North American manufacturers must balance a multitude of issues to stay profitable.  Increased competition from overseas manufacturing with its access to cheap labor, the reduced availability of qualified workers in the manufacturing trades, and tightening employee and environmental regulatory requirements, are just a few issues challenging the wits of manufacturing executives today.  Equally important is the struggle to shift into a new era of production – from high-volume, low-mix work, to the increasing number of low-volume, high-mix short-run projects coupled with just-in-time ordering – which has placed high demands on all aspects of manufacturing.

Because of all this change and instability, the costs of manufacturers’ traditional growth strategies – such as adding floor space, capital equipment, personnel and overhead – present a more significant risk than in the past.  Manufacturing executives and managers must assess all the factors relating involved in transforming resources into goods and services.

Capacity, and underutilization of resources — Central to this is assessing production capacity, because the maximum number of goods that can be produced over a given period under normal working conditions is the one barrier that every manufacturing business faces.

Capacity decisions affect production lead-time, operating costs and the company’s ability to compete.  Inadequate capacity can lead to the loss of customers and business.  Excess capacity can drain the company's resources and prevent investments into more productive ventures.  The question of when capacity should be increased, and by how much, is the critical decision.  Failure to make capacity decisions correctly can be damaging to the company’s overall performance, particularly when time delays are present in the manufacturing process.

One critical aspect of poor capacity planning in manufacturing is the failure to fully realize the capability of existing machining resources.  For many machine shops, increasing capacity means adding more equipment and workers, and extending valuable floor space.  But, the true production capacity of a machine tool is seldom fully realized by those responsible for assessing production volumes.  This factor is so important that it can make or break the profitability of a machine shop.  At the very center of this issue is the inefficiency of computer-aided manufacturing (CAM) toolpath generation, which plays a critical role in fully influencing machine production capacity.