Definition
Capacity planning compares the hours needed per work centre with what is available in that period: running hours on the machines, hours from operators and programmers, and room at outside suppliers. The result shows where it pinches, and when.
What it means for the calculation
The plan decides the delivery time you can promise, and that promise often decides the order as much as the price does. A machine that is full turns a short operation into weeks of waiting. For an owner, utilisation also sets what an hourly rate has to be: the same fixed costs spread over fewer running hours makes each hour more expensive. And a bottleneck at one work centre sets the lead time of the whole shop, even when the other machines have room.
Where this comes up
In the shop's own planning, per work centre and per week, and in the delivery promise that follows from it.
Common mistakes
Planning on average utilisation instead of on the bottleneck; the bottleneck sets the lead time, not the average. Also squeezing in a rush order without working out which other orders will be late because of it.
The plan decides the delivery time you can promise, and that promise often decides the order as much as the price does. A machine that is full turns a short operation into weeks of waiting. For an owner, utilisation also sets what an hourly rate has to be: the same fixed costs spread over fewer running hours makes each hour more expensive. And a bottleneck at one work centre sets the lead time of the whole shop, even when the other machines have room.
See how Blake reviews a partFrequently asked questions
Is capacity planning the same as a planning board?
A planning board shows the sequence; capacity planning checks whether the total fits at all.
Why does utilisation touch the hourly rate?
Because fixed costs are spread over the running hours; fewer hours means a higher rate per hour.
What is a bottleneck?
The work centre with the fewest free hours relative to the work that has to pass through it.