May 25, 2023 | 6 min read
Using capacity-oriented planning will enable you to cut expenses while augmenting the value of resources across the business areas. Capacity planning is essential for every business, as it ensures improved security in the execution of processes and helps you make a more detailed production plan based on the organization’s capacity and what can be done to boost it.
What is Capacity Planning?In simple terms, capacity planning is how you evaluate the production capacity you’ll require to fulfill future market demand. Since no business has an endless capacity for production, much of this planning involves managing and allocating resources, including how much you need and how you will deliver it. From arranging production, ordering materials, optimizing resources, navigating procedure bottlenecks, and locating opportunities for increased efficiencies, capacity planning involves many moving pieces. A relentless capacity planning software enables you to evaluate the business production capacity to maintain a seamless performance. Just like a puzzle, these pieces need to be organized so companies can meet the forecasted demands for coming days, weeks, months, or years. The main goal of capacity planning methods is to maximize your production capabilities while increasing profits and minimizing costs. You cannot produce an indefinite amount of goods, nor can you store all of these materials and spend more money to maintain and monitor them.
The Benefits of Capacity Planning
Capacity planning tools are the ultimate exercise in strategic resource management. With intelligent capacity planning software, you can enjoy endless benefits for your business. Read on to understand better:
There are two words every business fear: customer attrition (the number of customers that stopped using your company’s product or services).
And still, many businesses face this issue by not having adequate capacity planning. These businesses often deal with situations like not delivering products on time to meet supply demand and eventually ending up being stocked out.
One bad shopping experience is enough for any customer to stop purchasing your products and go to your competitors. Proper capacity planning methods can make optimizing your ordering processes easier and less time-consuming. You will also reduce stock-outs and improve your capacity to serve repeat customers.
Improved customer experience
A satisfied customer is the key to any successful business.
In supply chain capacity planning, the potential is to keep customers happy by delivering the right product, at the right time. Every business’s target is to sell as much as possible to as many customers as possible to thrive in the market.
In terms of the capacity planning process, this means increasing the number of satisfied customers without putting too much pressure on your supply chain. Efficient capacity planning enables you to use the best of both worlds – by producing accordingly towards your planned demand, and you can increase the number of happy customers while minimizing the costs.
Lower cost and increased efficiency
One of the fundamental uses of capacity planning is to make the best out of the resources available at your disposal. Nevertheless, this process is not as easy as it seems. Identifying inefficiencies in how your resources are utilized, where they are being used, and when they are getting used can get complicated at times, as bottlenecks often occur when you least expect them.
With the industry-leading capacity planning software connected to your business, you can plan more effectively for future demand, be prepared for the required productions, and give your business an elegant solution with zero waste.
Capacity Planning Best Practices and Strategies
Capacity planning is a strenuous process and integral to developing efficiency and boosting revenue opportunities.
Given its comprehensive nature, here are some strategies and best practices to help you make the most of your capacity planning process:
You can’t resolve every problem at once. When evaluating where to focus your capacity planning methods, identify projects with the highest priority for your business. Which product has the most ROI?
Are there any quick adjustments required for the short-term period? Strategies like this allow you to make the process smoother and more effective.
Capacity planning is not one individual’s task. It requires all the major stakeholders to collaborate, from executives to business leaders, to be informed every step of the way. The same applies to external entities and supply chain providers. Demand planning software allows you to communicate at every stage of your business and delivers extensive reporting to better understand future demand.
Plan for the worst situations and hope for the best
The idea of cautious measures is very relevant in capacity planning. Predicting future demand is really difficult at some point. That’s why you need to fuse your business with an intelligent rough cut capacity planning software working side by side with you to get the desired results. Hoping for the best and planning for the bad is absolutely necessary when dealing with constantly changing customer behavior and major shifts in market trends.
Remember, capacity planning is a continuing process
The capacity planning process is an in-depth and complex activity that needs time, patience, and effort. Having tools specially crafted to help accomplish it effectively is important. To operate your capacity planning continuously and smoothly, you require an automated dashboard that can relentlessly focus on your priorities.
Even though the process can be tedious, the investment is worth the results. A continuous evaluation and refinement approach can take time to see sizable gains. Maximize your time and results using capacity planning methods.
Avercast’s Capacity Planning Software allows you to handle inventory management with optimum visibility throughout the entire operations and helps you avoid unforeseen situations like stock-out or overstocking. To get started with seamless and efficient automated processing, talk to our experts or book a free demo.