1. Capacity Planning

2. 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

3. Diagram of Capacity

4. What Makes Up Capacity Facility Machines Labor Force
Hours of Working Time (Shifts, Overtime)
Vendors (Materials)

5. 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

6. Capacity Inputs Open Order File MRP (or MPS) Routing File
Work Center File

7. 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

8. You Do One Work Days = 5 Number of 8-Hour Shifts = 2
Number of Machines = 2
Labor Efficiency = .7
Machines Efficiency = .7
?? Standard Hours ??

9. 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 (150)(0.2) =
31.5 standard hours
Actual time is / (1.2)(0.8) =
32.8 hours

10. You Do One Units of Item X = 300 Set Up = 2 Hours
Run Time = .3 Hours per Item
?? Standard Hours ??

11. 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 25
181.5
Planned Load
100.5
120
100 90
510.5
Total Load
152
165
130
125
692
Rated Capacity
140
700
(Over)/Under
(12)
(25) 10 15 8

12. Correcting Capacity Problems
Short Term: Control Capacity
Overtime
Outsourcing
Alternate Routings
Flexible Work Force
Reschedule (Expedite)
Overlap
Lot Splitting

13. 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