What is Capacity Planning? Tips to Apply the Right Strategy

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To cultivate a flourishing garden with many plants, you need to make sure that each plant gets enough sunlight, water and vitamins and nutrients to survive. With sunlight or water scarcity your plants won’t look as appropriate as you expected.

what is capacity planning

Project management is not different. If you don’t have enough resources to implement strategies and complete a project, your garden won’t be made according to the plan. You may not be able to control external elements that affect your garden, but you can always make sure that you have all the resources you need for capacity planner.

A Brief Overview of Capacity Planning

Capacity planning, also known as yield management, is a strategic management and allocation of resources such as employees, tools and places to meet dynamic consumer needs, balancing operating efficiency and optimal resource allocation for high revenue.

In short, the use of allocation software for capacity planning can help forecast future demand and align organizational processes with available resources such as labour, machines and infrastructure. Businesses use the ability planners to balance supply and demand, allowing them to meet the changing needs of the industry without spending unnecessary costs or putting more pressure on their resources.

Types of Capacity Planning

According to the definition of textbook, there are three main types of capacity planning that organizations can employ in different situations. They’ve been listed as follows:

  • Lead capacity planning or lead strategy, is where businesses work to increase production capacity when they anticipate a high demand.
  • Lag strategy planning is the process of increasing production capacity when enterprises struggle with real-time demand.
  • Match strategy planning combines lag and lead capacity planning, in which companies continuously increase capacity in incremental increments until they reach the desired resource utilization stage. 

Tips for Effective Capacity Planning

As per a survey by Atlassian, 48% of workers admit they have too much work to do and too many unreasonable deadlines to complete the work.

Often, project managers and sales teams enthusiastically nod “yes” to every request that lands on their plate without thinking if they have the resources to handle that kind of work. This is where a capacity planner can be immensely helpful. From avoiding team burnout to setting more realistic deadlines, there are countless advantages of capacity planning.

Want to understand your team’s actual capacity with the right strategy? Well, here are some effective tips you can follow:

Analyze Historical Data

If you want to accurately guess the future requirements, consider demand patterns, sales trends and previous data on manufacturing cycles. Businesses can extract the data from their capacity planner, analyze past performances, and get valuable insights into potential fluctuations and demand for devising proactive strategies.

Switch to Automation

Do you understand what kind of expenses could be in error-prone capacity planning strategies? Instead of depending on the traditional capacity planning strategy, companies can use advanced analysis tools and software solutions to streamline their capacity planning operations. Adopting automation can help CEO make better decisions by efficiently analyzing large amounts of data, searching trends and allowing structured resource roadmap for same charge distribution.

Consider Seasonal Variations

Consider this scenario. You are in the retail business, and during Black Friday sales or clearance sales, you need to hire an influx of seasonal workers. However, to find out the exact number of workers or resources you might need, anticipating customer traffic is essential. You can use a state-of-the-art capacity planner and add additional headcount for a short period, so you don’t have to resort to downsizing or retain additional employees even when the peak season is over.

Calculate the Gap

Your organization is growing, and so are its resource requirements. If your goal is to make capacity planning seamless, try building flexibility into your infrastructure by investing in scalable technologies and adaptable processes. Having agile software solutions by your side can help you calculate your team’s current capacity and measure the capacity gap you are currently facing so your business processes can align with the audience’s demands.

Regular Review

Capacity planning is a continuous exercise that requires your unwavering commitment. Regularly assess plans in view of changing circumstances, market mobility and business objectives and make any necessary adjustment to stay on track with organizational goals.

The Bottom Line

At times, project managers are obsessed with productivity, and rightly so. However, getting the most out of an organizational workforce and optimizing productivity demands insights across different operational wings, and up and down the workforce infrastructure. Manually handling capacity planning can be daunting, error-prone, and somewhat cost-intensive. However, fortunately, now you can automate the overall process with allocation software and get a clear understanding of your business capabilities and workforce distribution.

Looking for a capacity planner to create an efficient business plan? Try out eResource Scheduler today!

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