Capacity Planning Challenges And Their Solutions

Time phased planning is essential for procurement, resource planning, and production. Many companies implement capacity planning without considering the future – they mostly focus on meeting today’s needs. This is one of the major areas manufacturers often fail to consider and by doing so they even leave the significance of ERP software value on the table.

Resource (both tangible and intangible) capacity planning should meet your forecasted demand. It’s a balancing act of your current capacity to fulfill your future demand. In the discrete manufacturing industry, it is quite challenging to find out when to start production, which means you need to manage and monitor your shop floor. This could be done only by adopting capacity planning.

This model when put into your business architecture will help you determine the most realistic approach to production.

Capacity planning in the manufacturing business stands for calculating accurate capacity for your production plant – how much you can produce to keep up with your future product demand.

Plan well to keep up with forecasted production demand:

Be it a short or long-term objective, you need to plan for the labor, machines, and auxiliary equipment you need on the shop floor and production lines. Well, since the primary goal of any business is to reduce cost and increase profits, and capacity planning is a crucial factor in this regard.     

In labor capacity planning, you need to measure the standard work hours each worker spent against the required time to meet your production schedule based on weekly work orders. Analyze labor availability by the skill level and category they fall in and schedule their work accordingly.

In machine capacity planning, check for the availability of the machines and how much work they can do in the requested time frame. Check their capacity limits and variables that can affect it; for instance, setup, maintenance or upgradation, etc. Evaluate machines by type and amount of work done by day, week or month.

In auxiliary equipment and tools planning, check for their availability at the work center and evaluate if you are having the same equipment as mentioned in the bill of material. If not, then take appropriate actions.

Factors that can affect your capacity planning and its utilization in production management include,   

  • Type and number of projects to be completed

  • Labor and equipment required for a project

  • Forecasted work center requirements for timely production

  • Added work that’s not related to production in a time frame    

  • Standard time available for resources to complete their jobs

You must have enough workforce to complete a project, all while considering the allocation and utilization of the required labor on the shop floor and production line. Moreover, you also need to take into account how much production you can give in a certain time period and how much you should undertake – depending on the labor and machines you have in hand.   

This is where you need to implement a production management system into your business.

What makes a capacity plan necessary?

It’s important to have a well-developed production capacity plan based on real-time, accurate data so that the right people can work on the right machines to complete a project without delay. Also, it allows you to check and evaluate your monetary resources involved in delivering quality products on time.   

It’s also important to have your capacity plan in place to create a healthy work environment with major focus on scalability because it’s not only about comparing work hours consumed against the production requirements. Without well-planned capacity management, you may run into risk of;     

  • Workers being overloaded

  • Inaccurate work scheduling

  • Labor exhaustion and burnouts

  • Dropping work quality

  • Declining labor morale

  • Increased lead times

  • Delayed order fulfilment

  • Increased overhead costs

And, this all will happen just because of poor capacity planning and failed project management.    

Challenges encountered during capacity planning:   

Let’s take a look at the key challenges you may face while working on your capacity planning and how you can overcome them for successful execution of your plan.  

Non-Homogeneous Data:

You cannot make precise and well-informed decisions using granular data. You need homogenous, real-time, and accurate data before you start planning for your manufacturing capacity.

Data granularity is the first thing you may come across because the capacity plan for improved production heavily depends on data. It usually includes all information about the performance of your manufacturing business and how you put all data together.

Now, more the data, the more in-depth analytics you need to work on and hence, requiring more effort to maintain it. You need to decide where to focus more while collecting the information you need for capacity planning. For instance, you should pay attention to;  

  • Manufacturing hierarchy

  • Production scheduling

  • Project time frames  

To deal with this challenge of data granularity, you should deploy a manufacturing ERP with a consolidated database with automated protocols, ensuring data consistency and accuracy.  

Inadequate Production Management:

Keeping production management maturity is another challenge that greatly ties with the skills of your workers. If you don’t focus on the skill sets and expertise of your workers, your capacity planning will not bring you the required results. Also, the strength of your capacity planners largely depends on their abilities because to put together and implement it in an effective way needs the best resources and seamless collaboration between managers and planners.   

With production management maturity, you can easily put your capacity plan together. It requires flexibility and experience as you need to adapt when things are no more aligned with the plan. This is where you can use production management software for effective capacity planning and shop floor productivity and control.

Last but not the least is capacity forecasting to meet future demands, prioritizing manufacturing orders and making all tasks for workers easier, and time tracking to comprehend capacity limits.

Bottom Line:
Find a dynamic, scalable tool that will help you in capacity planning, automate production processes and make communication quicker and easier with your employees to complete the manufacturing order sooner than later. 


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    Tomas Mandy

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