Capacity planning is a key task for any manufacturing business. If you get it right it can maximise the utilisation of your assets, maximise your turnover and allow you to achieve a high on time delivery performance for your customers. Many businesses get this wrong. Improving the visibility of your capacity plan and making the whole process more visual can help you to realise the benefits of an effective shop floor capacity plan.

Blind leading the blind

One of the problems with loading a shop floor environment is the 'not knowing' factor. If your capacity plans are both visual in nature and visible then there is a good chance that you will overload or underload your business. Whilst getting this right isn't rocket science it is something worth investing time and effort into to get right.

If you don't share your capacity plan with other parts of your business (especially sales and maintenance) then there is a good chance that decisions could get made that will knock your production schedules off track. Share the capacity plan in a simple and visual way to get the best results for your business.

You can't fool your capacity

Whilst you might try to fool yourselves about how much produce, you can't fool your capacity. Just like trying to put a pint in a half-pint glass, you can't put 50 hours per day into a resource that can only handle 10...

I remember dealing with one company... They couldn't cope with their order book, which was limited to approximately 50 sales orders per day. I'm sure that you see the obvious error in their logic, one sales order could be one hour of capacity or 100. The number of sales orders was irrelevant. They solved the problem... they raised the limit on their sales orders to 70 per day. If you want to know the outcome - it didn't work. Until they accepted how the capacity plan was designed to work they couldn't progress... thankfully they did in the end.

Don't try and fool your capacity plan. Stretching resources is a very short term strategy.

Tripling turnover

Getting your capacity planning right can have bigger implications than just delivering on time. One of Giles' previous employed roles experienced this dramatically. In short, the knock on benefit of sorting out the capacity planning system was to drop the production lead time through the business. This started a chain reaction of ERP improvement, related Kaizen improvements across the business and building a reputation in the marketplace as the fast turnaround guys for bespoke production within our sector. In eighteen months the business' turnover increased from £10M to £30M without any increase in staff and no overtime. Our gross margin soared too... it was a bit of a manufacturing fairy tale.

Delivering on time, consistently, can be a differentiator in your marketplace and you have the opportunity to use that factor to drive additional sales from your existing customer base.

Fraction's simple view

We've intentionally taken a simple view when developing Fraction. We wanted to make the whole thing visual and simple to manage.

Pick up your works order, review the available capacity and drop it into your schedule.

That's it. Now your team can get on with managing their production duties and not spending ages 'shuffling the deck'.

Communication and a visual plan

Once you have tidied up your order book and got a production schedule that works your initial capacity planning challenge is over. The next challenge is to clearly communicate that sequence with your teams and then taking away their obstacles so that they can achieve what they need to achieve.

A simple way to do this is to have a dashboard that reviews the works orders, provides you with a sequence to work to and a quick way to review progress. We built this into Fraction:

So, what are you waiting for?

If you need to sort out your capacity plan then draw up an improvement plan and get to it.

And, if you just don't have a system to do this - sign up for a free demo of Fraction ERP today.

Having a simple and effective capacity planning tool makes all of the difference to decision making and delivering on time efficiently.