Measuring Capacity

Why measuring capacity matters

This whitepaper outlines a comprehensive framework for assessing asset capacity and efficiency — a key step in optimising business operations. It shows that many organisations own or lease significant assets, but only a portion of that capacity is actually earning a return.

By breaking capacity into clear components and putting numbers against each one, senior managers can see where value is being created, where it is being left on the table and where targeted action will deliver the biggest gains.

The four elements of capacity

The framework identifies four key elements of asset capacity. Together they add up to 100% of the time or output your assets could be delivering:

• Employed Use: assets actively used and paid for by customers. This is the capacity that directly earns revenue.
• Compensated Underemployed Use: assets that are idle or lightly used, but still generating some income (for example, minimum monthly charges or standby fees).
• Non-Compensated Underemployed Use: assets that are available but not being used, and not earning anything. They still cost money to own, house and maintain.
• Unemployed Use: assets that are completely idle and incurring costs, often “forgotten” or under-managed.

Understanding how much of your capacity sits in each category is the first step to benchmarking efficiency and maximising returns.

Using calculators for real assets

The whitepaper provides practical examples using calculators for machines, vehicles and properties. For each asset type, you can:

• Quantify how many hours, days or units of output are in Employed Use.
• Estimate the level of Compensated and Non-Compensated Underemployed Use.
• Identify Unemployed Use — capacity that is completely idle.

Once these numbers are in place, it becomes much easier to see the true financial impact of under-capacity, not just in terms of cash cost, but also in opportunity cost.

The cost of non-compensated use

Non-Compensated Underemployed Use is particularly important. It represents:

• A direct cash cost — depreciation, lease payments, storage, insurance and maintenance on assets that are not earning.
• A significant opportunity cost — those same assets could be redeployed, sold or replaced with something that generates a return.

By shining a light on this “quiet” part of capacity, organisations can make better decisions about which assets to keep, upgrade, relocate or retire.

Turning insight into action

Analysing these capacity elements allows organisations to develop targeted strategies to enhance asset utilisation and reduce inefficiencies. Examples include:

• Reallocating assets from low-use sites to where demand is higher.
• Changing maintenance or operating practices to increase Employed Use.
• Disposing of truly Unemployed assets and freeing up cash.

Over time, this approach supports operational excellence and improves the bottom line, especially when paired with financial tools that show the cash impact of better asset decisions.

Linking capacity to cash with MyCash Dashboard

When capacity insights from this framework are combined with the cash visibility in MyCash Dashboard, leaders can see both the operational and financial sides of asset performance. You can test scenarios such as:

• “What happens to our cash if we lift employed use by 10% on these machines?”
• “How much cash could we release if we sell or redeploy our unemployed assets?”

That connection between capacity and cash is what turns a technical efficiency conversation into practical decisions that move the numbers.