For manufacturing and production operations, there is a limit to what can be produced within a given day.
This can be due to space limitations in warehousing or a maximum number of items that can be processed on a machine in a given time frame.
In other words, the available capacity is finite and there is a finite amount of products that can be produced or stored in that timeframe.
These frustrating situations highlight the need for proper analysis of the capacity you have and its utilization, to identify he root of the issues.
Capacity Analysis is the process of identifying the available capacity for your organization which includes the available inventory holding capacity, machine capacity, labor capacity, etc.
It also aims to identify how capacity utilization can be optimized to increase the total available capacity of the operations.
The overall goal of many manufacturing companies is to create an optimized and efficient schedule to have balanced flow between supply and demand, while minimizing waste and costs.
Companies can get closer to their goals by maximizing the available capacity they already have.
To do this, it is helpful to model the capacity of the entire infrastructure, process, and/or machines. Then, as long-term production planning and demand forecasting are performed, a capacity plan can be developed.
The capacity plan ensures that the production facility knows which orders they can commit to based on the available capacity of their facility.
Capacity planning promotes a systemic approach of determining resource requirements for a projected output within a given time frame. Proper capacity planning will help identify whether you have the right capabilities (or 'skills') required to meet demand.
It is important to understand your capacity limitations so that you can identify areas of improvement and develop a capacity plan that is just right for your organization.
Many factors contribute and detract from the available capacity. These include the quality and quantity of labor, machine availability, waste levels, government regulations, required machine maintenance, and other external factors.
Unexpected events, as most recently observed during the COVID-19 global pandemic, have highlighted how external factors can affect capacity levels.
Physical distancing requirements reduced the total available capacity for many manufacturers, leading to a decreased output. Some of these companies chose to add overtime capacity, while others chose to outsource some of their operations or even added automation to increase the output of their production lines.
The prevailing theme for businesses that thrived during the pandemic had one thing in common - agility. These companies were able to quickly identify the effects of losing capacity in order to make the right choices to meet their business goals quickly and efficiently.
The key frameworks to model capacity are rooted in real world thresholds (constraints) of practicality and profitability. Most commonly, these include:
The first step to take when you are constantly operating under constrained capacity is to identify the bottleneck.
A capacity bottleneck is a process or operation that has limited capacity and reduces the capacity of the entire production plant.
Bottlenecks cause delays in production, too much work-in-process items, and can be costly to the company. Identifying capacity bottlenecks can help identify the real cause of the problem and develop a plan to resolve it.
There are many ways to increase resource capacity within your facility:
In today's manufacturing facilities, the optimization of production scheduling and capacity planning are changing rapidly and drastically.
Outdated capacity planning models that relied on guesswork and oversimplification lead to a decrease in efficiency and under-modeled capacity.
However, Advanced Planning and Scheduling (APS) systems have changed the way capacity planning and analysis are handled today.
PlanetTogether’s software is by far the best and most encompassing planning software package offered today.
These systems use capacity performance models with real-time data and analysis to determine what capacity is needed. Capacity constraints are automatically applied to ensure that every machine is capable to perform the work that is assigned to it.
Advanced Planning and Scheduling systems are reshaping and augmenting ERP and MRP softwares by allowing faster and more accurate performance results that have improved operations planning as a whole.
Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent.
These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.
APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.
With PlanetTogether APS you can:
The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system.
APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!