CAPACITY PLANNING

Capacity planning involves analyzing the capabilities of a company’s resources to meet anticipated demand.  Having insufficient or excess capacity can be costly to the organization in the form of lost sales or inventory related expenses respectively.  Depending on the severity of the mismatch between demand and capacity, additions to, or removal of assets may be appropriate.

BENEFITS OF CAPACITY PLANNING

Capacity planning will help your organization optimize efficiency and ensure that neither money nor effort is wasted while meeting your customer’s needs.

THE CAPACITY PLANNING PROCESS

• Design a process flow diagram that illustrates how the organization converts input into output
• Calculate the capacity of the company’s resources is based on this process flow diagram
• Determine what the demand will be on the company’s resources
• Ascertain if the organization has the appropriate amount of capacity to handle the anticipated demand
• If adjustments are needed, provide guidance in selecting the appropriate course of action

FURTHER READING

These links elaborate on the topics at hand.  They serve as a good starting point for those that would like to learn more or would like to address these topics “in house.”  For those that prefer to continue to focus on their current responsibilities and would value the objective perspective of a professional outside of the organization, click here.

Capacity Planning – Long-term capacity planning, Short-term capacity planning, Capacity-plannin
Excerpt:  “There are four procedures for capacity planning; capacity planning using overall factors (CPOF), capacity bills, resource profiles, and capacity requirements planning (CRP). The first three are rough-cut approaches (involving analysis to identify potential bottlenecks)…”

ImperoCo Business Solutions - "Developing Organizational Success."