Overview

This is part 2 of 3 parts on Capacity Planning.

Capacity Planning is both an art and a science. If you want your company to truly serve its clients and to be successful now and, in the future, you need to have an up to date capacity plan. Then you truly know what your capabilities are and when you will need to add to them as demand starts to meet or exceed what you can do.
Session, one covered the theory and application of Capacity Planning and why it is necessary. In this session we look at an example of a Capacity Plan and how it is developed.

A Capacity plan must cover a few different aspects of manufacturing. These include:
   
Sales requirements
Manufacturing info such as equipment, rates and run times.
Assumptions
Production calculations

Each piece is covered in a step-by-step fashion. This is done for each area of manufacturing, so the larger the company, the more info and data are required, and the more calculations are needed. The good news is that once the formats are developed, these can be used forever, making any needed changes that occur based on adding new items and retiring old ones.

The examples used are straight forward and easy to follow. The more straight forward the calculations, the more understanding, acceptance, and use can be had not only by the person doing the planning but by those he / she is sharing the resultant information with.

While simple in theory, the planning is quite thorough and comprehensive. And it should be updated at least every two years or sooner if there are major changes in the company based on higher or lower than expected sales growth.

After reviewing the planning example, we will then cover “Capacity Cushion”. This is defined as A capacity cushion is the amount of reserve capacity built into your production to handle sudden increases in demand or temporary losses of production capacity. As a general guide, the average utilization rate should not be too close to 100% over the long term.

This can also be called a Manufacturing Buffer or Just in Case Capacity. It is used where sales forecasts may be unreliable or when a company is just starting operations and there is little or no sales history. 

After completion of Session 2, the participants are ready for the third and final session which covers Types of Capacity Planning, Planning steps. and the Benefits of Capacity Planning.
     

Why you should Attend

Capacity Planning is both an art and a science. If you want your company to truly serve its clients and to be successful now and, in the future, you need to have an up to date capacity plan. Then you truly know what your capabilities are and when you will need to add to them as demand starts to meet or exceed what you can do.

The plan should cover all the information necessary in order to make it worthwhile. That means that you also need to know what the company’s sales plans will be now and for the future. That covers at least 3 years and up to 5 years. Nothing beyond that is needed.

The plan should be reviewed every 6 months unless there are some major changes to the company’s needs or your ability to produce. In that case the plan (At least the part affected) needs to be reviewed and updated immediately. 
A good, smart organization will take this seriously and act on whatever the plan directs them to do.

Areas Covered in the Session

• Planning Example
• Capacity Cushion
  

Who Will Benefit

• VP Operations
• Capacity Planning managers and employees
• Director of Operations