3 Steps to Develop an Effective Capacity Planning Process

Irrespective of the size of the business, every manufacturing company benefits from the financial and logistical capabilities of capacity planning. The capacity planning process is a method of project management that takes into account the efficient use of resources through a projection of production needs. Establishing a proper capacity planning process is essential for companies to maintain workforce and product manufacturing. The capacity planning process does not need to be onerous, but it should involve carefully thought-out steps to ensure that businesses have the right amount and type of resources at the right time. That is why resource planning forms an integral part of the capacity planning process. In this article, our supply chain analytics experts have laid down a few steps that are critical to developing an effective capacity planning process.

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Steps to Develop an Effective Capacity Planning Process

Determining Service Level Requirements

This is the first step in the development of a capacity planning process. In this step, a business needs to break down work into categories and quantify users expectations for how that work gets done. This step involves three stages:

• Establishing workloads
• Determining the unit of work
• Setting levels of service

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Businesses can organize workloads by specifying either who is doing the work, the type of work performed, or the process of the work. Workloads measure the number of resources needed to accomplish the work, a unit of work helps in measuring the quantity of work completed, and setting service levels helps in laying out acceptable parameters between the provider and the consumer.

Analyze Current Capacity

The next step in developing the capacity planning process is to analyze the current capacity of the business operations. Businesses need to analyze their current production schedule for better capacity management. They should analyze each workload by following these four steps:

• By comparing the measurements of any items referenced in service level agreements with their objectives
• Strategic resource planning and checking the usage of every resource of the system
• Analyzing the resource utilization for each workload and identifying workloads that are the primary users of each resource
• Determining points where each workload spends its time and gaining insights into which resource takes the most significant portion of response time for each workload

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Plan for the Future

This is the final step involved in developing an effective capacity planning process. Once the current capacity is analyzed, businesses need to know the amount of work that is expected to come over the coming quarters. Following this, they need to configure the optimal system for satisfying service levels over this period. The optimal configuration ensures you meet service level requirements and offers an opportunity for companies to optimize their production process and prepare themselves for the future.