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Focus on asset utilisation often has an adverse impact on Supply Chain performance!
I have seen umpteen instances where an expensive asset is under-loaded by planners. It happens when demand for that asset is less than its capacity. How we deal with such lower utilisation is key to the supply chain performance.
Many planners are under pressure from the production team, and often from the top management, to load the asset more. They end up advancing future production to improve the asset utilisation.
It makes sense only when the demand is seasonal and the peak demand is expected to be higher than the production capacity. In all other cases, we should leave the asset utilisation at the level dictated by its demand, so that the production flow is not hampered.
Advancing future production not only leads to flow disruption through inventory accumulation, it also results in higher supply lead time, poorer response to demand shifts, and loss of product freshness to the final consumer.
Correcting just this one flawed policy leads to amazing improvements in the overall supply chain performance!