Utilization is a measure of operation: how often a machine is used, or how much time a technician works. The utilization rate is a measure of operation compared with the total available time. For example, a machine might be operational for 10 hours per day but available for 15 hours, yielding a utilization rate of 66.7%.
Tracking utilization rates helps companies determine whether labor, equipment and resources are overused, underused or deployed effectively. These rates also help inform production planning, staffing requirements, maintenance scheduling and long-term budgeting. In addition, utilization rates are tied to other industrial maintenance KPIs such as overall equipment effectiveness (OEE), mean time to repair (MTTR), mean time between failures (MTBF) and workforce optimization.
Below, you’ll find the definition, formula, examples, and practical ways to apply and manage utilization.
What is utilization rate?
Utilization rate is the percentage of available time a resource, such as a machine, technician or team, is productively in use. In practice, this means it measures the time spent working vs. the time available.
It’s important here to distinguish between utilization and efficiency. While both deal with the use of labor, resources or machinery, they measure different values. Where utilization measures how often something is used compared to its total availability, efficiency measures performance during use.
In the example above, 10 hours of use out of 15 available gives a utilization rate of 66.7%. If output was 75 of an expected 100 units during those 10 hours, efficiency = 75%.
Both high and low utilization can expose bottlenecks and resource allocation imbalances in your organization. If equipment is only being utilized 50% of its available time, this may indicate issues with operational efficiency or unexpected downtime. If a technician is utilized for repairs in 10 out of every 10 available hours, this may indicate the need for additional staff to optimize the employee utilization rate.
The utilization rate formula (with examples)
The formula for utilization rate is as follows:
Utilization rate = (Actual time worked / Total available time) x 100
Here are two examples.
A technician available for 40 hours per week is performing work for 30 of these hours. This means: Utilization rate = (30/40) x 100 = 75% utilization.
A machine is available for 16 hours but only runs for 12. Therefore: Utilization rate = (12 / 16) x 100 = 75% utilization.
It’s worth noting that rates can be calculated for any process or person, including:
- Individual employees
- Maintenance teams
- Machines and equipment
- Departments
- Production lines
In practice, utilization ratios and rates help contextualize operations or labor within the larger context of manufacturing processes. For example, while a 75% utilization rate leaves 25% of potential operational time available, this 25% may be necessary to ensure smooth operations—running at full capacity can put strain on equipment seals, gaskets and connectors.
Consider the capacity utilization rate of manufacturing production in the U.S. According to the Federal Reserve, this rate was 75.5% in September 2025, down from a long-term average of 78.2%. While this reflects a dip in the average, it still indicates that the industry is operating at a strong level of efficiency, with room to scale production as demand grows.
Types of utilization in manufacturing
While utilization rates can be calculated for any resource, several types are common across manufacturing processes. They include:
- Labor utilization: How much of a technician’s available time is spent on productive tasks.
- Machine utilization: How often equipment is running compared to how much it could run.
- Facility utilization: This may include measurements of how often workstations are used compared to their total available hours, or actual production line uptime versus potential uptime.
- Maintenance and billable utilization: The percent of maintenance hours spent on actual repairs vs. admin or travel time.
How to calculate technician utilization rate
Unlike machine utilization, which is simply a measure of operation vs. available time, maintenance utilization rates account for the type of tasks performed by technicians.
Productive tasks:
- Preventive maintenance
- Corrective work
- Predictive tasks
- Inspections
- Troubleshooting
Non-productive tasks:
- Admin tasks
- Waiting for parts
- Travel between areas
- Meetings
Here’s an example. A technician works an 8-hour shift. This is the total amount of operational time available. During those 8 hours, the technician spends 4 hours on preventive maintenance, 1 hour on corrective work, 1 hour on inspections, and 30 minutes on predictive tasks. The other 1.5 hours are split between administrative tasks such as reporting and documentation, traveling between production areas, and waiting for parts.
To calculate the utilization rate, first add the productive time: 4 + 1 + 1 + .5 = 6.5 hours. Then, divide the total productive time by all available time and multiply by 100: Utilization rate = (6.5/8) x 100 = 81.25%.
While it’s possible to improve utilization rates by reducing the amount of time spent waiting for parts or moving between areas, it’s important to recognize that 100% technician and workforce utilization is not achievable or advantageous. Consider admin tasks and meetings. While not “productive” as maintenance, both are necessary to ensure operational compliance.
Why utilization rate matters for manufacturing operations
Calculating and tracking resource utilization rates and integrating them with other metrics offers multiple advantages, such as:
- Revealing staffing or capacity needs: If technicians report utilization rates over 90% or machines are running near 100% utilization, this may indicate the need for more staff to address maintenance tasks or an in-depth manufacturing capacity analysis to determine ideal utilization rates.
- Identifying resource underuse or overloading: Equipment utilization rates under 50% may indicate problems with resource management, while those near 100% may suggest overloading. These values typically represent underlying issues. For example, low utilization rates may be due to supply, inventory or skill issues.
- Ensuring machines are not idle or overworked: Idle machines mean lower productivity and wasted money on power, heating and other utilities. Overworked equipment is more prone to sudden failures that can lead to significant downtime. Optimal utilization helps drive improved profit margins.
- Supporting better maintenance planning and scheduling: Utilization rate data helps inform better maintenance planning and scheduling. If utilization rates are low, this may indicate scheduling inefficiencies that can be addressed. If rates are high, companies can invest in more preventive maintenance to ensure machines remain operational.
- Preventing technician burnout: High technician utilization rates can lead to burnout. If technicians are constantly running from one task to the next with no time to prepare and no buffer for unexpected issues, both their performance and mental health may suffer. If high rates are reported, this may indicate the need to hire more skilled maintenance technicians or partner with a third-party service provider.
- Improving production forecasts and budgets: Because utilization rates are based on actual rather than optimal data, they help predict potential costs for operations and maintenance, and they can improve production forecasting accuracy.
Consider a manufacturing company facing an unexpected increase in machine downtime. While analysis of the machine itself reveals no obvious issues, utilization calculations reveal that technicians spend most of their time on corrective work rather than predictive or preventive tasks. As a result, they’re treating the symptom rather than the root cause of the issue.
Ideal utilization rates
Ideal utilization rates depend on the resource. For example, ideal utilization rates for maintenance personnel fall between 70% and 85%, while rates for machinery are typically 80% to 95%, depending on production strategies and output requirements.
In both cases, however, 100% utilization may create more problems than it solves. When it comes to maintenance technicians, a 100% utilization rate increases the risk of staff burnout and overload and also leaves no time buffer for unexpected issues.
If machines are operating at 100% utilization, meanwhile, there is no time for preventive maintenance, which in turn leads to higher breakdown risk, increased MTTR and lower reliability.
Common mistakes when calculating utilization rate
There are several common mistakes manufacturers make when calculating utilization rates:
- Using scheduled instead of available time
- Counting breaks or mandatory meetings as productive
- Not including unplanned downtime
- Poor data entry or incomplete work orders
- Overestimating capacity availability
Tools and systems that improve utilization tracking
Utilization tracking and reporting can be complex and time-consuming, especially as production lines expand and companies diversify their product offerings. With the right tools and systems in place, however, companies can automate utilization reporting and enable real-time visibility.
First up are computerized maintenance management systems (CMMS) and enterprise asset management (EAM) platforms, which help track technician utilization and work order hours. Next are the use of IIoT systems and sensors that monitor equipment uptime and runtime in real time.
It’s also important for manufacturers to integrate these solutions with enterprise resource planning (ERP) and scheduling platforms to improve accuracy and leverage analytics tools and dashboards to help visualize bottlenecks and identify solutions.
Ready to optimize utilization and improve production performance, but not sure where to start? ATS offers workforce support, preventive maintenance services, predictive maintenance implementation, and real-time equipment monitoring to deliver unified utilization insights. Let’s talk.
References
Board of Governors of the Federal Reserve System. (2025, December 3). Industrial Production and Capacity Utilization: G.17. https://www.federalreserve.gov/releases/g17/current/
