How AI-Powered Capacity Planning is Changing The Manufacturing Landscape – a ThroughPut Perspective

May 5, 2021 · 6 minutes
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The consumer demand scene is constantly changing and when you suddenly land in a situation where your product is in great demand, it can turn into a missed opportunity if you’re not prepared.

So, how do you prepare for such an unprecedented situation? How would you determine how many resources you would need to deploy to get the order delivered? How would you allocate your resources to get the maximum output and ROI? The answer to all these questions is capacity planning.

Capacity planning helps you determine resources as a manufacturer in proportion to the output you need to generate to meet the demand.

With proper capacity planning strategies, you can determine how much raw materials, labor, equipment, and investment in facilities you’ll need over a period of time to meet future demand.

But is there a way to make capacity planning more efficient? Of course, there is! With emerging technologies like Artificial Intelligence (AI) and Machine Learning (ML), manufacturers and businesses can mitigate various risks and impacts on the supply chain and build resilience for the future.

An effective AI-powered capacity planning tool can help you in various ways:

  • It can help you plan your manufacturing resources better and optimize your limited resources in the best possible way.
  • You can maintain a healthy balance of demand and supply in your supply chain by assessing actual capacity against realized demand.
  • It can help you optimize your production schedules by detecting and eliminating bottlenecks as they arise.
  • It allows you to revisit historical data on demand, initial inventory levels, supply-demand behavior patterns and use the knowledge of asset performance capabilities to this data.

Think you can Manage your Supply Chain Without Capacity Planning? Think again!

AI-powered capacity planning helps you achieve the right balance of demand and supply in the chain. Wondering how? Let us explain.

Customer demands today include low cost, superior quality, and instant availability of products. Advanced AI-powered tools can help you meet all the criterions through automation and augmentation.

Tools like ThroughPut’s ELI help you analyze capacity utilization by allowing you to track the capacity utilization against the actual, suggested, and available capacity for each resource category.

They help you with solutions that can boost your asset performance by providing updates about average machine performance, stable and unstable processes, current and potential operational constraints, and more.

To create a proper capacity plan in manufacturing, you will need information about how many hours in a day/week/month you’ll require these resources for production.

With a carefully designed capacity plan, you can ensure that the right people work on your project at the right time using the right equipment and deliver quality work on time.

Not just resources, AI helps you keep track of your inventory levels at all times so that you can deal with market fluctuations without breaking a sweat. With AI-powered capacity planning, you can:

  • Track, measure, and trace inventory with recommendations on when and where reallocation is possible
  • Balance demand and supply with deep insights on a mid-term and near-term range
  • Manage and match inventory availability and market demand to make smarter business decisions

Making Strides into Capacity Planning with Artificial Intelligence 

There are many reasons why traditional capacity planning methods fall apart in the current digital world. Traditional methods are manually intensive, inaccurate, and based on assumptions, and most importantly, they’re costly.

To make smarter capacity planning decisions, enterprises need accurate data that isn’t based on assumptions. 

Artificial Intelligence (AI) and advanced analytics play an important role in providing huge continuous improvements over traditional, legacy processes.

AI-driven capacity planning solutions help you decrypt relevant information to obtain appropriate insights by applying predictive analytics, data analysis, forecasting, and optimization models. 

These insights are based on legitimate data and regulated through Machine Learning (ML) algorithms. They can help enterprises make appropriate decisions on time by forecasting and putting necessary network changes in action to stay ahead of the demand curve.

AI-powered Capacity Planning – the key to a Resilient and Agile Supply Chain

AI-powered capacity planning strategies take into account all the relevant aspects of production including workforce, facilities, production schedules, budgets,  and supplies.

With these strategies, manufacturers can improve productivity and can keep a close eye on all production costs especially during periods of growth and recession.

If you think that capacity planning is only relevant to large enterprises, you may want to reconsider your opinion. Small and medium businesses also need effective capacity planning.

By automating capacity planning through AI, decision-makers can view their capacity at different operational levels and maintain a balance in the supply chain. 

Automated capacity planning offers a flexible approach and provides both local and holistic views of capacity to the enterprises.

As your capacity planning solution forecasts demand, capacity planning acts as the input for other production functions which includes demand management, aggregate planning, scheduling, and shop floor control.

Top AI Influencer & Industry Analyst, Ronald Van Loon shares key insights about “2021 AI & Supply Chain Trends and Market Insights.

Digitally Transform Capacity Planning and Always be Ready for the Unexpected

What used to be an involved process that solely relied on guesswork and assumptions earlier is now transforming into optimal manufacturing models based on standardized data and insights.

With the advent of AI, the Internet of Things (IoT), the Cloud, and other digital technologies, manufacturing capacity planning and that of the entire supply chain management has undergone tremendous change.

  • From making short-term decisions about staffing to making long-term capital decisions, digital technologies have made production more efficient.
  • The key to optimizing the capacity planning supply chain is to ensure that the crucial aspects of growth are taken into account. This includes keeping track of every stage of your product from raw material to the delivered product. 
  • Sometimes, production may need more equipment or more workforce or your customer service may need additional staff to resolve issues, purchasing may have to renegotiate existing contracts and find a new supplier, or maybe shipping would need demand forecasts. All of these factors will have to be considered while creating a capacity plan and with advanced insights, this work becomes a lot easier.
  • You can also make changes to planned production or available capacity using rough-cut capacity planning (RCCP) analysis. 
  • Recognizing bottlenecks in production and keeping track of the amount of work passing through these points will ensure that you don’t overload a workstation or production to stop. With AI-powered capacity planning, you can always be on top of your bottleneck capacity management in manufacturing by:
    • Monitoring production progress
    • Re-allocating resources to address bottlenecks
    • Checking task status

ThroughPut makes it easy

If you’re ready to get started on the road to manufacturing capacity planning with Artificial Intelligence, ThroughPut’s ELI is the right way to go. 

ELI gives you a detailed view of your critical resources. It helps you achieve your capacity utilization goals and minimize losses by maximizing the demand closer to real-time with the need to offset by production lead time. Here’s how ELI helps.

  • It provides you with a resource view and products view to help you keep track of your resources and product against the actual, suggested, and available capacities and quantities respectively.
  • It provides a bird’s eye view to your capacity planners, operations managers, and chief supply chain officers across the capacity levels so they can estimate the capacity of your asset load accurately, plan scheduled or unscheduled maintenance, get multi-site and multi-plant visibility for work orders, and more.
  • It also keeps you updated about inventory levels by tracking and tracing the products across the chain and assessing the change in market demand.
  • ELI works to cut your losses by maximizing the real-time demand, keeping the resource utilization under the set capacity limit.

Get the most out of your investment in AI-driven capacity planning software – ELI. Ask for a demo today and get started on the path of profits. 

AI-driven supply chain optimization software for the manufacturing industry. Schedule A Demo Now
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Anita Raj - Vice President of Product Marketing at ThroughPut AI
Anita Raj
Vice President of Product Marketing