Capacity Planning

Capacity planning runs at several horizons. Long‑term planning sizes plants, lines and headcount for one to several years; rough‑cut capacity planning tests the master production schedule against bottleneck resources; detailed capacity requirements planning checks the planned orders from material requirements planning (MRP) work center by work center. In each case the forecast in units is translated into hours through routings – the time per unit on each resource – plus changeovers. One week on a packing line:

• Available capacity – 2 shifts × 7.5 h × 5 days = 75 h, minus 6 h of planned maintenance = 69 h.
• Load – 4,000 units of product A at 0.6 min = 40 h, 2,000 units of product B at 0.9 min = 30 h, 4 changeovers at 45 min = 3 h, total 73 h.
• Utilization – 73 / 69 = 106%; the 4 missing hours have to come from overtime, earlier production or fewer changeovers.

Capacity planning in practice

Capacity stated in units is valid for one product mix only. In the example above, 6,000 units a week split 4,000 A and 2,000 B need 73 h; the same 6,000 units split 3,000 and 3,000 need 78 h. A sales team that promises volume against “6,000 units a week” commits the line to a different load every time the mix moves toward slower products. The capacity check therefore needs the forecast at item level, or at least by groups of items with similar routings, not as a single total.

The second trap is the size of the planning bucket. A month at 90% average utilization can contain weeks above 100% when seasonal or promotional peaks fall into a few weeks. Monthly buckets hide that; the overload appears only when the schedule is built, too late to hire or to pre‑build. Pre‑building moves the peak into inventory, so the choice between overtime, pre‑build and a later delivery is a cost comparison, with inventory carrying cost on one side.

Logio builds capacity models that link demand, routings, setup times, staffing and maintenance in capacity planning and production capacity planning projects. The demand input comes from demand forecasting in Veritico STOCK per item, store or warehouse and day. On the distribution side, STOCK plans warehouse, transport and workforce capacity and smooths peaks by balancing replenishment orders into a daily minimum–maximum range.

Related terms

• Master Production Schedule (MPS)
• Sales and Operations Planning
• Material Requirements Planning (MRP)
• Integrated Business Planning (IBP)