Accurately predicting the eb and flow of supply and demand can be challenging for any organization. Learning how to deploy efficient manufacturing solutions with capacity planning software that maximize demand can help ensure inventory and supply chain optimization all while setting a sound production schedule.
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What is Capacity Planning Software?
For those unfamiliar with the term, capacity planning software refers to programmable solutions for manufacturing organizations. These solutions help companies balance actual production capacity with the fluctuating demand for products or services offered by the organization.
By balancing design capacity, or the maximum amount of work produced in a given period, with effective capacity, the most work produced in a set time period, a company can optimize resource allocation. There are three main resource types included with capacity planning software: machines, tools, and people.
The combination of the three above resources, along with their availability over a period of time, will help a company determine the true capacity they are capable of outputting.
4 Benefits of Capacity Planning
The primary benefit to capacity planning software is that it allows a company to remove a number of unknown factors in their production process. By creating operational mock scenarios for bottleneck situations or demand shortcomings, companies can better prepare alternative solutions. Beyond this, there are four other primary benefits for capacity planning:
More intelligent budgeting
It’s estimated that companies waste an average of $1 million every 20 seconds, or 10% of every dollar spent by businesses due to ineffective implementation of business strategy. By using capacity planning, a company can focus on optimizing their budget to meet specific amounts of predicted demand. This can lead to leaving less money on the table in the long run.
Keep skills fresh
By constantly evaluating the machinery, tools, and people contributing to your organization, you can ensure that all skills used in the production process are optimized. Older skillsets that haven’t been refreshed will slow the entire production lifecycle. By identifying these skills and taking the time to teach your workforce updated versions, anybody can enhance their production line.
Make improved hiring decisions
By focusing on the people best suited for a certain role within the organization as part of the capacity planning process, you can identify any gaps in your workforce where a person with particular skills would be useful. This information can be used to make more successful hiring decisions going forward that are geared towards improving production output.
Stay on top of customer demand
Perhaps one of the biggest and most obvious benefits of capacity planning software is its ability to help an organization counteract the fluctuations of demand by allowing it to create alternative solutions if demand fails to meet expectations. By staying on top of demand, you can save money all while ensuring your customers stay satisfied.
Improve your organization workflow today
Enhancing the production cycle of your organization can seem like a challenge if you don’t know where to begin. Optimizing the fluctuations in supply and demand by using capacity planning software is an excellent strategy for meeting a budget all while satisfying the needs of your customer base.