As a business that’s trying to turn a profit and satisfy as many customers as possible, you want to make sure that you’re working as efficiently as possible. It can be difficult to manage the resources, people, and time you have at your disposal. If you don’t do this effectively, then it can lead to a lot of waste.
But that’s where strategic capacity planning comes in…
What is strategic capacity planning?
Strategic capacity planning is a way of optimizing your business output so that your customers’ needs are met with as little waste as possible within your business. It is easy to understand in terms of product supply and demand. You want to make sure that you have enough of each product in stock without having excess inventory. So, you need to be able to predict when a certain product will be in high demand and when demand will wane.
However, strategic capacity planning is also important for service-based industries. You need to make sure that you have enough employees, time, and tools at your disposal to meet the demands of your clients and other business operations without having excess. For example, you may hire a new employee when you take on a new client so that you can better meet the demands of this new project.
Why is it so important?
Strategic capacity planning is essential for ensuring that your business is working as efficiently as possible. Without successful capacity planning, you could either find yourself with excess capacity, i.e. lots of spare time or idle employees that aren’t contributing to your productivity. Or, you could find yourself overworked and under-resourced, unable to keep up with the demands of your clients.
When you know what your capacity is, you know exactly how much work you can take on and when. It makes missed deadlines a thing of the past. By planning ahead, you can expand your capacity when demand is high by hiring new employees, for example. This is key to maximizing profits and productivity within your business.
How to calculate capacity
To help you get your head around capacity planning, here are a few different types of capacity to take into consideration:
- Maximum capacity – As the name suggests, this is the maximum level your team can work at based on number of employees, hours, resources, materials, etc.
- Effective capacity – Effective capacity is a more realistic measure of capacity than maximum capacity. It considers variables like coffee breaks, sick days, and human error to more accurately measure the capabilities of your team.
- Actual capacity – This is the capacity that your team is actually working at. It is likely to be less than effective capacity unless your team is working at optimal potential.
To assess your actual capacity, you can simply examine the results produced over a certain timeframe – one week, for example. These concepts originated in manufacturing, in which case it is easy to see how many hours and materials it takes to produce a certain amount of the product. With services, it is a little more abstract but still measurable.
LogicalPlan has a great feature for measuring and predicting your capacity. On each task, you can enter an estimated time that it will take to complete that task. Once complete, the user responsible for the task can enter the actual time it took them to complete it. This is great for predicting future capacity as you have an accurate impression of how long certain tasks will take.
LogicalPlan for strategic capacity planning
Effective capacity planning is all about understanding the makeup of your team, what they are working on, and how much time they have to spare in the week or month. It’s also about knowing what tasks your team needs to complete on and how long they will take.
LogicalPlan’s timeline view allows you to see all of this at a glance. It’s a great tool to aid your capacity planning because you can easily see how much time, manpower, and resources you have available at that time. If you want to take on more projects but your timeline is overloaded, you know it’s time to bring new employees on board, or else turn down the work.
To optimize your team’s capacity, start using LogicalPlan for better project management and planning.