Capacity Planning

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Capacity Planning
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Capacity

• Capacity is the amount of work that can be done
  in specified time period
• Capacity is a rate of work done, not quantity of
  work done
• Two types of capacity (1) capacity required or
  load and (2) capacity available

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Diagram of Capacity
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What Makes Up Capacity

• Facility
• Machines
• Labor Force
• Hours of Working Time (Shifts, Overtime)
• Vendors (Materials)

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Capacity Planning

• Determine capacity available at each work center
  in each time period
• Determine the load at each work center in each
  time period
• Translate MRP or MPS into hours of work required
  at each work center in each time period
• Sum up capacities for different items on each
  work center
• Resolve differences between available capacity
  and required capacity

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Capacity Inputs

• Open Order File
• MRP (or MPS)
• Routing File
• Work Center File

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Determining Capacity Available

• A work center consists of 4 machines and is
  operated 8 hours per day for 5 days a week.
  Utilization (1-idle time) is 85 and labor
  efficiency is 110.
• Available time (4)(8)(5) 160 hours
• Rated capacity (160)(.85)(1.1)
• 149.6 standard hours

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You Do One

• Work Days 5
• Number of 8-Hour Shifts 2
• Number of Machines 2
• Labor Efficiency .7
• Machines Efficiency .7
• ?? Standard Hours ??

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Determining Capacity Required or Load

• A work center processes 150 units of item Z. Set
  up is 1.5 hours and runtime is 0.2 hours per
  item. Efficiency is 120 and utilization is 80.
  
• Standard time is 1.5 (150)(0.2)
• 31.5 standard hours
• Actual time is 31.5 / (1.2)(0.8)
• 32.8 hours

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You Do One

• Units of Item X 300
• Set Up 2 Hours
• Run Time .3 Hours per Item
• ?? Standard Hours ??

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Comparing Load with Capacity Available

• Be consistent with times, either all standard or
  actual
• Example of work center load report

Week 20 21 22 23 24 Total
Released Load 51.5 45 30 30 25 181.5
Planned Load 100.5 120 100 90 100 510.5
Total Load 152 165 130 120 125 692
Rated Capacity 140 140 140 140 140 700
(Over)/Under (12) (25) 10 20 15 8
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Correcting Capacity Problems

• Short Term Control Capacity
• Overtime
• Outsourcing
• Alternate Routings
• Flexible Work Force
• Reschedule (Expedite)
• Overlap
• Lot Splitting

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Correcting Capacity Problems

• Medium Term Plan Capacity
• Make/Buy Decisions
• Plan Alternate Routings
• Add Tooling
• Retrain Work Force
• Long Term Model Capacity
• Facility Changes
• Capital Equipment Changes

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