Production Capacity Planning
# Production Capacity Planning
Effective capacity planning ensures you can meet demand without overcommitting.
## Understanding Production Capacity
### Calculate Your Capacity:
- Daily/weekly production output by product type
- Number of shifts operated
- Equipment capabilities and limitations
- Labor availability
- Raw material supply constraints
### Capacity Metrics:
- Units per day/week/month
- Machine hours available
- Labor hours available
- Square footage utilization
- Bottleneck operations
## Capacity Planning Process
### Step 1: Current Orders Review
Review existing commitments:
- Orders in production
- Confirmed orders awaiting production
- Pending RFQs likely to convert
- Recurring order commitments
### Step 2: Capacity Assessment
Calculate available capacity:
```
Total Capacity - Committed Capacity = Available Capacity
```
### Step 3: Order Evaluation
For new orders, evaluate:
- Does it fit within available capacity?
- What is the impact on existing orders?
- Can overtime or additional shifts help?
- Should we extend lead time?
- Is outsourcing an option?
## Managing Capacity Constraints
### When at Full Capacity:
- Extend lead times for new orders
- Prioritize high-value orders
- Consider outsourcing (if quality maintained)
- Hire temporary workers
- Add production shifts
- Upgrade equipment
### Seasonal Fluctuations:
- Plan for peak seasons
- Build inventory during slow periods
- Hire seasonal workers
- Communicate seasonal lead time adjustments
- Offer discounts during slow periods
## Capacity Buffer
Maintain 10-20% capacity buffer for:
- Rush orders from key customers
- Rework requirements
- Equipment maintenance
- Quality issues
- Employee absences
- Supply chain disruptions
## Production Scheduling
### Scheduling Methods:
**First Come, First Served:**
Simple but may not optimize for profitability.
**Priority-based:**
Rank by customer tier, order value, or strategic importance.
**Shortest Processing Time:**
Do quick orders first to clear backlog.
**Constraint-based:**
Schedule around bottleneck resources.
## Using the Platform
1. Access **Production Calendar**
2. View scheduled orders
3. Identify available slots
4. Schedule new orders
5. Set milestone dates
6. Track progress
## Communication
- Update order status regularly
- Notify buyers of any delays immediately
- Provide revised delivery dates
- Explain capacity constraints when needed
- Be proactive, not reactive
## Capacity Expansion
Consider expansion when:
- Consistently at capacity
- Turning away profitable orders
- Long-term demand growth
- Equipment utilization >85%
Expansion options:
- Add equipment
- Increase shifts
- Hire more staff
- Outsource non-core processes
- Expand facility
Effective capacity planning ensures you can meet demand without overcommitting.
## Understanding Production Capacity
### Calculate Your Capacity:
- Daily/weekly production output by product type
- Number of shifts operated
- Equipment capabilities and limitations
- Labor availability
- Raw material supply constraints
### Capacity Metrics:
- Units per day/week/month
- Machine hours available
- Labor hours available
- Square footage utilization
- Bottleneck operations
## Capacity Planning Process
### Step 1: Current Orders Review
Review existing commitments:
- Orders in production
- Confirmed orders awaiting production
- Pending RFQs likely to convert
- Recurring order commitments
### Step 2: Capacity Assessment
Calculate available capacity:
```
Total Capacity - Committed Capacity = Available Capacity
```
### Step 3: Order Evaluation
For new orders, evaluate:
- Does it fit within available capacity?
- What is the impact on existing orders?
- Can overtime or additional shifts help?
- Should we extend lead time?
- Is outsourcing an option?
## Managing Capacity Constraints
### When at Full Capacity:
- Extend lead times for new orders
- Prioritize high-value orders
- Consider outsourcing (if quality maintained)
- Hire temporary workers
- Add production shifts
- Upgrade equipment
### Seasonal Fluctuations:
- Plan for peak seasons
- Build inventory during slow periods
- Hire seasonal workers
- Communicate seasonal lead time adjustments
- Offer discounts during slow periods
## Capacity Buffer
Maintain 10-20% capacity buffer for:
- Rush orders from key customers
- Rework requirements
- Equipment maintenance
- Quality issues
- Employee absences
- Supply chain disruptions
## Production Scheduling
### Scheduling Methods:
**First Come, First Served:**
Simple but may not optimize for profitability.
**Priority-based:**
Rank by customer tier, order value, or strategic importance.
**Shortest Processing Time:**
Do quick orders first to clear backlog.
**Constraint-based:**
Schedule around bottleneck resources.
## Using the Platform
1. Access **Production Calendar**
2. View scheduled orders
3. Identify available slots
4. Schedule new orders
5. Set milestone dates
6. Track progress
## Communication
- Update order status regularly
- Notify buyers of any delays immediately
- Provide revised delivery dates
- Explain capacity constraints when needed
- Be proactive, not reactive
## Capacity Expansion
Consider expansion when:
- Consistently at capacity
- Turning away profitable orders
- Long-term demand growth
- Equipment utilization >85%
Expansion options:
- Add equipment
- Increase shifts
- Hire more staff
- Outsource non-core processes
- Expand facility