Capacity Planning In Operations Management
Capacity planning is the process of evaluating all available production resources, including machinery, staffing, and work centers to understand if the manufacturer will be able to meet customer demand now and in the future.
An important subset of capacity planning is resource capacity planning, which is the process of deciding how to optimize the function of existing resources, which resources to add, and which resources to downgrade or remove.
There are many key factors directly affecting capacity planning in operations management. We’ll cover those in more detail below, but first, we’ll look at why capacity planning is so important.
Importance Of Capacity Planning
Frankly, without it, you are not running a business efficiently. It really is that dire. Without looking at the projects you are working on and the people that are working on them, you can’t be sure that the project is being completed as quickly as it can be. Even if you’re somebody who is directly involved in liaising with the team to check on progress, you don’t know if there is a more efficient way of working if you haven’t carried out capacity planning. By doing this, you’ll be able to tell if too many people are working on one task (meaning you’re paying out more in wages than is necessary) or if not enough people are working on it (in which case you probably won’t be finished on time). Whichever way you look at it, capacity planning is important in making sure that everybody is working to their full potential.
What you also need to understand is that capacity planning works in estimates too, not actuals. By this we mean, a capacity plan not only looks at where your business is right now in terms of the workload you are facing but also where it is likely to be in the future. This is important because business managers might look at their actual workload and reduce the workforce because there seem to be too many outgoing expenses in terms of wages, and not enough income in terms of orders from customers. The problem with this approach is that it can often turn out to be a rash decision that will cost the business in the long term. With a smaller workforce, you may be unable to handle more work when it eventually comes your way again. Capacity planning can help you there.
Factors Affecting Capacity Planning
Just about every element of your production environment needs to be taken into account for effective capacity planning. Even factors that don’t seem important can impact operational efficiency. For example, many manufacturers have discovered that seemingly irrelevant factors like office decor and layout can impact worker productivity. This means that a factory with offices or breakrooms that are decorated in an attractive matter and laid out in a way that facilities effective communication can actually inspire the workforce to be more productive and improve capacity across the board.
Away from your business facilities, you’ll also need to consider the product or service you offer. Variety is the spice of life, but too much in terms of what your business offers and output will be slowed down. How streamlined your business is in terms of what you offer customers will directly affect how quickly and how efficiently you can get things done.
One challenge that production schedulers have is keeping track of all the factors that impact capacity planning. This can be readily remedied with a next generation scheduling software like Optessa. Optessa allows schedulers to configure all capacity constraint factors in seconds, without custom coding. This advanced planning and scheduling system will then consider all these constraints when creating the production schedule and optimize operational capacity with patented algorithms.
