Capacity Planning Software – Plan, Analyze and Prepare for Capacity

September 2, 2022 · 8 minutes
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As accurately said, orchestrating a capacity-planning strategy is both an art and a science. On one hand, you need to determine the resources needed to meet the demand for products and services.

And on the other, an effective capacity-planning strategy can help plan these resources and ensure all customer needs are served promptly.

The process of Capacity Planning in any organization is essentially a function of three resource types: machines, people, and tools. One or more of these types of resources are used to perform an operation on a job.

For planning purposes, demand and supply managers want to know how many hours in a given week or month would each of these resource types be available for consumption.

This is then compared to all job operations that would need that resource allocation, and then calculate how many hours of their available time are needed for each operation. To summarize, this calculation would help them develop a proper capacity plan and to leverage the right capacity planning software.

How can Capacity Planning Software Help? 

A sound Capacity Planning Software can eliminate ambiguities and guesswork from production planning processes by optimizing through efficiency and planned capacity. Some of the aspects through which it can help:

  • It creates possible “what if” scenarios that help identify short-term and long-term operational bottlenecks and shortcomings and work out possible alternative solutions.  
  • It provides reliable algorithms and manual alternatives which help organizations easily focus on customer orders and align fulfillment mechanisms accordingly. 
  • It ensures inventory & supply chain optimization across all levels by accurately projecting finished goods and supply chain forecasting for each component-level.
  • It uses relevant ERP data to continuously optimize production plans using inputs like available material, capacity constraints, and day-to-day shop floor performance.
  • It provides a sound production schedule by including a demand/supply level strategy across the manufacturing facility.

What is Capacity Planning Software?

Capacity planning software is a programmable solution that helps manufacturing organizations understand the actual production capacity needed to address fluctuating demands for its products and services.

With reference to capacity planning, design capacity is defined as the maximum amount of work that an organization is capable of completing in a given period.

And, effective capacity is the highest possible amount of work that an organization is capable of completing in a set time period, owing to constraints like quality problems, delivery schedules, material handling, labor shortages, etc.

Here are some of the key questions that production teams try to answer during the capacity-planning process:

  • How much free capacity exists at present in each of the service departments/ functions? 
  • How much capacity buffer is needed for those? 
  • How much workload growth is expected between the current and the next scheduled capacity-planning iteration, which includes both natural customer-driven growth and new product features?
  • How much capacity is needed to continue the targeted free capacity buffer after the expected workload growth?

With regard to the manufacturing industry, the process of Capacity Planning is made up of three resource types: machines, people, and tools.

One or more of these types of resources are used to perform an operation on a job. For planning purposes, manufacturers want to know how many hours in a said week or month would each of these resource types be available for consumption.

This is then compared to all job operations that would need those resource allocation, and then calculate how many hours of their available time are needed for each operation. To summarize, this calculation would help manufacturers develop a proper capacity plan.

How to Choose the Right Capacity Planning Software?

Utilizing Capacity Planning Software for a data-driven manufacturing operation can boost production tremendously, but the challenge lies in choosing the best Software and tools that are most relevant to the organization’s set up. Here are some guidelines which can help in making this decision: 

1. An Intuitive User Interface

A quick and user-friendly interface goes a long way in accelerating the capacity and supply chain planning process to accomplish tasks quickly and efficiently. Therefore, a Software that is agile and easy to use can help concentrate on long term goals and business development.

2. Fast and Smooth Implementation

Successful implementation of Capacity Planning software is dependent on the coordination of many variable factors. With several sales and ERP systems that are available in the market today, operations teams need to ensure the implementation process is smooth to avoid potential bottlenecks.

3. Capacity Planning Accuracy

A sound Capacity Planning tool is one that works accurately despite complex process feeds. Typical just in time manufacturing set up is one that has overlapping operations and it is important to have accurate Capacity Planning in place to avoid risks and miscalculations.

4. Scalability of Operations

With mid to large scale complex manufacturing operations management, scalability is of utmost importance. A Capacity Planning Software that can seamlessly integrate into all available data sources is the ideal choice.

A scalable tool should be able to monitor and make predictions about thousands of data sources at once with accuracy.

5. Simple and Comprehensive Reporting

A good Capacity Planning Software is one that facilitates ease in reporting across business function heads. Along with precision in reporting facts it should be able to simplify the process of sharing information to reduce the time and effort in analyzing and gaining insights from these reports.

Essential Features of Capacity Planning Software

A good Capacity Planning Software is one that is embedded with useful features targeted at improving capacity and supply chain efficiency, maximizing utilization, minimizing wasted time, and reducing overall supply chain costs. Some of the features are as follows:

1. Production Monitoring

This feature allows users to become familiar with issues within capacity planning by using metrics to understand production flow and status. By analyzing production trends, manufacturers can plan for the adequate capacity required to deliver optimum levels at any point in time.

2. Real-time Data

The ability to access real-time information pertaining to the machine and factory floor is another requisite. A Capacity Planning Software that includes an intuitive dashboard for access to these metrics is highly valuable and can help manufacturers balance considerations around historical infrastructure performance and current usage.

3. Precitive Analytics

Capacity Planning Software that includes predictive analytics capabilities to enable manufacturers to accurately predict future capacity requirements is critical. It helps plan for specific assets and the entire factory infrastructure as a whole. This also helps define specific parameters to access advanced and predictive analytics reporting to support capacity projections.

4. Performance Modelling

It is a fact that the best Capacity Planning tools always use some sort of performance modeling. However, traditional modeling can be time-consuming, so it is important that the tool works on specific information regarding the incoming workloads, as it can then predict how the systems will perform and identify risk.

Automated analytic modeling techniques are most useful in the day-to-day monitoring of applications and systems. This helps track the performance of large numbers of factory infrastructure elements that serve applications and business services.

Capacity Planning For Your Organization– Getting started

In manufacturing, maximizing the existing capacity relies upon a steady stream of business operations. So, if manufacturers want to ensure 100% asset utilization, they would need sufficient business volume to properly manage production. 

While capacity planning relates to effective scheduling and proper machine allocation, there are still some standard norms when it comes to manufacturing. If manufacturers ignore the most common causes of machine downtime in production, then no master scheduling plan will produce results. Here are some guidelines to ensure a good success rate for manufacturing Capacity Planning:

1. Monetize the Value From Hight Cycle Times

Manufacturers who focus on accurately tracking their cycle times and eliminating downtime, usually succeed in planning adequate capacity. These teams can, in fact, convert the lost production time between cycles into a definite dollar value and quantify the costs for each production cycle.

2. Focus on Clear and Concise Information Flow

A clear flow of work orders can ensure workers are aware of their tasks and complete them on time. This implies that functional work orders, bill of materials, and assembly instructions are easy to understand, thus avoiding delay, rework, or redundant work between departments and operations.

3. Absolute Quality and Documentation Control

To ensure clarity in interpreting the work orders, there has to be a 100% focus on quality control and documentation streamlining. Adherence to quality improvement standards from training workers to documenting operational issues should be a priority across departments. 

4. Adjust and Match Capacity with Utilization Hours

It is important to constantly correlate the capacity hours with the utilization hours based on the utilization pattern for a particular resource. Based on a clear long term indicator of utilization, capacity can be planned to load operations.  

Leveraging AI for Accurate Capacity Planning

Artificial Intelligence (AI) based Capacity Planning in operations management can drive better-optimized plans using voluminous data sets from sensors across the factory floor. AI helps by being able to comb through and extract insights from this data much more quickly than a human planner could possibly manage.

Also, if integrated properly, AI in supply chain and operations can quicken capacity based decision-making. It uses real-time planning to deliver the following benefits to manufacturers:

  • Minimal disruptions across the production line
  • Reduced delayed shipments 
  • Efficient resource management
  • Judicious inventory planning and management 
  • Better use of time for planners and decision-makers to add value to other strategic areas 

ThroughPut’s ELI is an AI-powered bottleneck elimination engine that analyzes existing industrial data in real-time. ELI continuously detects, identifies, prescribes & prevents shifting bottleneck operations to create optimum Capacity Planning strategies that can save millions in delays, inefficiencies & lost revenue.Request Demo

Explore ELI today

Finally, AI in manufacturing helps manufacturers get meaningful operations outcomes by creating seamless efficiencies while keeping capacity planning intact.

Try Supply Chain Management Software – ELI today to start experiencing operational excellence for your manufacturing plant today.

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Anita Raj
Product Marketing Specialist