The definition of capacity is “the maximum amount that something can contain.” When used in casual conversational vocabulary, this word is easy to understand. However, when used in a supply chain setting, there are many more elements encompassing the concept of capacity.
What is capacity planning?
Capacity planning allows companies to plan how much production and inventory they can manage in a given amount of time. The good news is, there is software that helps different professionals enhance their capacity operations.
Capacity planning software
What does capacity planning software do? Well, it forecasts future capacity needs and capabilities, and then allows users to access this information to plan their future operational strategies. These predicted insights allow overseers to manage to manufacture effectively. Find below some of the many ways inventory planning software is implemented.
Provides analysis of how current production and capacity operations could be adjusted to be more efficient.
Intuitively assesses resources used in production, adjusts practices to increase productivity, and identifies and avoids bottlenecks.
Adjusts load at different locations with just a few clicks.
Creates custom reports to use in planning.
Alerts users of issues that need priority attention.
Allows users to implement it with their inventory planning tools.
Helps users make educated and timely decisions.
Benefits of capacity planning
Obviously, there are many parts to capacity management software, but perhaps even longer is the list of benefits that come from effective capacity planning. This tool allows users to improve some of the most crucial parts of their operations. As you know, production and storage both require a large amount of money. Capacity management tools give users access to processes that will help both their operations and wallets.
Reduced complications in production operations
Time saved through improved planning processes
Effectively allocated resources
Reduced waste of resources
Above are just some of the benefits that can be seen when users implement inventory planning software. Operations can be planned in a much more strategic way, which brings these benefits and more.
Let’s look at a hypothetical but relatable example.
With the holidays upon us, Santa is very busy. He has a big operation on the North Pole, and lots of labor from elves. However, with his main production requirements happening on time during the year, it can get crazy around the holidays. Santa must be very organized and precise to make sure every child in the world gets what they want.
Similarly, your business has its peak season(s), and you try to do everything you can to ensure your consumer demand is met. Santa meets with children in malls across America to ask them what they’re hoping to find on Christmas morning. I’d argue you don’t have the resources or time to ask each potential customer what they’re going to want in the coming months. Forecasting tools can predict what your consumers are going to want, and when they’re going to want it. These forecasts can be used in capacity planning.
It wouldn’t make sense to plan your capacity unless you know what products need to be manufactured, stored, and transported.
Let’s say Santa found out there are 100 children who want stuffed animals and 100 children who want video games. It’s no secret to Santa that manufacturing these two items is both different processes. Santa has a very strict deadline of December 24 every year. He knows that video games take longer to produce, but they don’t take up as much space as manufacturing stuffed animals. Using capacity planning tools, Santa is given suggestions of the most efficient way to produce these toys before the big day. This allows Santa to have peace of mind, meet his deadline, save resources, please his consumers, and more!
If you offer products for sale, then you could benefit from capacity planning tools. You may ask yourself, “what’s the best capacity planning software?” It’s important to do your research to find the best fit for the specific needs of your company. One thing is for sure, if you implement inventory planning software tools into your company operations, you will quickly notice the benefits!