Capacity Planning: Types and Important Steps to Know

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In today’s rapidly changing world, running a business must include planning for an uncertain and unpredictable future. In the same way marketing automation wasn’t a thing a few years ago, knowing how many employees or products to order in the next few months is daunting. Moreover, how to adapt to changing customer expectations?

Although making these predictions may seem difficult, the solutions to these anticipations are simpler than you might think. A successful business must leverage capacity planning to find solutions to these daily uncertainties.

What is capacity planning?

Capacity planning is essentially a management and production method that involves maximum utilization of resources through accurate projection of production demands. Here you need to determine the production capacity of your business and the manpower required to meet the market demand. Using a good capacity planning tool makes it easy for companies to identify when to scale, identify and mitigate riskand modifying their capacity design to adapt to changing market conditions.

There are three main types of capacity planning. They understand:

· Product Capacity Planning – Ensures there are enough products to meet forecasted demand.

· Workforce Capacity Planning – Ensures that there are enough employees and man-hours to complete a project. Workforce planning helps communicate workforce needs to managers and stakeholders.

· Tool Capacity Planning – Ensures there are enough tools or machines to complete a project.

Capacity planning steps

Capacity planning includes the following three steps:

1. Capacity Needs Assessment

Companies should begin capacity planning by determining capacity requirements. This is essentially to assess the capacity needed to meet market demands. This is determined by the overall production plan and detailed material schedules which indicate expected production rates.

From there, managers can estimate the capacity required to achieve the desired production rates. Businesses can then organize the workload by identifying the resources and capabilities needed to complete the project. For example, if the end result is improved customer relations, identify methods to achieve this, such as CRM softwarecan be effective.

2. Analysis of current capacity

The second step is to assess the current capacity of the business. Here you need to analyze the system as a whole, as follows:

· Check performance of current resources by comparing planned and actual outputs

· Monitor the use of various company resources

· Determine which workloads take longer. Assessing your current capacity helps identify gaps and areas that need improvement

3. Plan for the future

Planning for the future becomes easy once you understand your current capacity. Your future capacity plan should consider potential bottlenecks that could overwhelm the production system. If your current capacity is less than the capacity required to meet market demand, you can identify ways to increase capacity. This may include creating additional shifts, adding overtime, investing in additional machinery, etc.

Endnote

An effective capacity plan should help companies prepare for the future. With accurate plans, you can easily meet promised delivery dates without stretching resources. ResourceGuru Scheduling Software enables businesses and capacity planners to generate accurate production plans and schedules, ensuring resources are utilized to their full potential.

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