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Structure your Manufacturing Capacity Planning & Strategy

manufacturing capacity planning

What is Capacity Planning in Manufacturing?

Capacity planning in manufacturing comprises of three important resources which include machinery, people or labour and the tools used. Usually a production job involves one or more of these three components and this is key for capacity planning. To understand how many hours, days or weeks that each of these resources would be available for completing a manufacturing process. This is then multiplied into all possible job operations that are required to be done which would need these resources and how much time is needed for that operation. This can help develop a good capacity plan for the job order.

Capacity Planning for Manufacturing – Process Involved

A good process plan can help manufacturers optimally configure the system to ensure SLAs are met while only investing the necessary resources needed to get the work completed. This helps manufacturers optimize the production process and make them prepared for the future.

1. Understanding the Service Level Requirements

  • The first step is to break down the manufacturing job or production order into various categories.
  •  This can help create a structured flow to quantify the exact user expectations. It includes establishing workloads, determining the unit of work, and setting service levels. 
  • Manufacturers can then decide how each work task will be organized based on labor availability, or the complexity of work involved. 
  • Finally a “service level agreement” lays out the acceptable parameters between the manufacturer and the consumer.

2. Estimating and Analyzing the Current Capacity

The next step is for manufacturers to take a deeper estimate of the existing production schedule to evaluate the final capacity. Manufacturers usually analyse separate workloads and follow these steps:

  • Compare the measurements of specific workloads mentioned in the SLA with the overall job objectives.
  • Evaluate the actual usage of multiple resources across the system 
  • Check the resource utilization for each workload and then decide which of these consume more manpower.
  • Finally calculate the most time consuming aspects of each workload to arrive at the response time taken for each job.

3. Planning for Future Requirements and Demand

  • Once the current capacity is analyzed, manufacturers can then plan for future demand.
  • By accurately forecasting the processing requirements, a system or process overload on the manufacturing set up can be avoided. 
  • Manufacturers would need a clear estimate of the actual incoming work that is expected in the coming few months. 
  • Finally, they can configure the most optimal system needed to satisfy these requirements over the forecasted period of time.

How to Structure your Manufacturing Capacity Planning Template

Here is a checklist of variables to consider while structuring your Manufacturing Capacity Planning Template :

1. Capacity

The most basic element which is the number of units available of a specific resource for a particular length in time. Manufacturers need to also account for any gaps/ holidays/ breaks / maintenance downtime if any, while calculating the capacity.

2. Setup/Run Hours

The next variable is to define how much time a specific operation on a job will take to eventually move through a resource. This is made up of a combination of setup time, which is a static number and the run time which depends on the number of items on the job. Finally, the total hours are compared to the total capacity of the resources needed for planning.

3. Utilization

This variable is a measurement of the capacity usage and measures the total usage of the resource. It is important for capacity planning, as it is a measure of the actual capacity compared to the estimated capacity.

4. Efficiency

Efficiency is defined as the measure of the actual setup/run time versus the estimated setup/run time for a work job. Efficiency can help track how much capacity is needed actually and the difference from the original plan. When this is multiplied across several job loads, efficiency can be a critical measure to define final performance.

5. Queue time/move hours

It is important to understand that just because an operation is scheduled to complete at a certain time using one resource, this doesn’t imply that the subsequent resource can immediately start running it. It usually takes a material handler to move a specific  job from one resource to the next. This can also impact the machine’s utilization, since it may sit idle while waiting for the next job to be available.

6. Offset hours

From a capacity planning standpoint, a work job may progress in different ways including offset hours. These hours that can always be offset to another job, and can help save time and resources. Knowing ahead of time of how one can plan for operations that can be offset can make a massive impact on the manufacturing capacity planning.

7. Concurrent Resources

Many times manufacturers need more than two or three resources to be available at the same time to complete a job operation. Also, the ability of the worker to run all three together may also impact the completion of the job. Sometimes it may need multiple labour resources to run each operation. This can further get complicated once all of the jobs are multiplied and therefore concurrent resources is an important aspect to consider.

With a strong Capacity Planning Software, manufacturers can ensure a structured approach to capacity planning and avoid surprises along the  operations value chain. Here is a great comprehensive reference guide on how to go about selecting a  sound Capacity Planning Software and how it can help manufacturers.

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