Only craft gold UR gear. Also, only upgrade gold UR gear.
Do not waste resources on purple, blue, or green gear for crafting or upgrading.
You will need to upgrade your Gear Factory to level 20 to add stars to your level 40 gold gear.
In your gear factory, Dismantle all excess purple, blue, and green gear then Merge all the materials into Dielectric Ceramic. When you get 750 Ceramics craft a piece of gold gear until all 3 squads have level 0 gold gear equipped.
I copied the image below from another site. The game provides recommendations to help you level up your gear. Neither is perfect but both are good guidelines.
Make sure to start getting Blueprints from the Honor Store as soon as you can. Also, the Glittering Market comes up once a month and is a good source for Mythic Blueprints. Also save your Ammo during the Bullseye event until you have 700 ammo then use them all to get the Mythic Blueprints.
