Capacity planning is a planning exercise for correctly determining in advance the required resource hours over time for dealing with fluctuating demand. The exercise is necessary for any production system that has to handle spikes in demand using only limited resources when production smoothing is neither possible nor economical. Capacity planning is generally more difficult in make-to-order (MTO) environment with unpredictable nature of orders and unpredictable order times. It is much more difficult for a system with multi-functional machines and multi-skilled workers. If product mix keeps changing, then demand for resources will keep changing and create moving bottlenecks in the system. Capacity planning is helpful to mitigate the moving bottlenecks. Short-term capacity planning is done by running machines for a few extra hours, providing overtime for workers or running production for extra shifts on some days. On the other hand, long-term capacity planning is done by hiring workers, training workers for additional skills or adding more machines. Capacity planning may also involve outsourcing some operations or even entire production of some selected products. The goal is being able to accept and manage extra demand without declining it due to lack of resource availability.
Quick and unexpected increase in customer demand over short intervals
Changes in quantities or priorities of existing orders
Acceptance of rush orders for high margins
Increasing delays for some orders on shop floor
Irregular material supplies
About Optisol
Capacity planning is a planning exercise for correctly determining in advance the required resource hours over time for dealing with fluctuating demand. The exercise is necessary for any production system that has to handle spikes in demand using only limited resources when production smoothing is neither possible nor economical. Capacity planning is generally more difficult in make-to-order (MTO) environment with unpredictable nature of orders and unpredictable order times. It is much more difficult for a system with multi-functional machines and multi-skilled workers. If product mix keeps changing, then demand for resources will keep changing and create moving bottlenecks in the system. Capacity planning is helpful to mitigate the moving bottlenecks. Short-term capacity planning is done by running machines for a few extra hours, providing overtime for workers or running production for extra shifts on some days. On the other hand, long-term capacity planning is done by hiring workers, training workers for additional skills or adding more machines. Capacity planning may also involve outsourcing some operations or even entire production of some selected products. The goal is being able to accept and manage extra demand without declining it due to lack of resource availability.
Specifications
Business Size
Startup
Language Support
English
Product Details
Benefits
Reduce rejection of orders due to capacity concerns
Reduce anxiety to meet due dates
Increase revenue by being able to handle more demand and demand spikes
Improve customer satisfaction by increasing on-time delivery and accepting rush orders without affecting other orders
Make judicious investments on new resources for increasing production, revenue and profit
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