Capacity planning refers to the process of determination of the production capacity that an organization requires to cater to the changing requirements for the production. Design capacity refers to the ultimate work amount that any organization is capable of accomplishing in a given period of time. It is common for organizations to face different challenges such as material handling, delays, quality concerns etc. Inefficiency results from the discrepancy between demands of the customers and the organization’s capacity. Capacity planning conference aims to minimize this difference. Capacity of an organization varies and depends on changes in production output like decreasing and increasing production quantity of any new line of products or the existing products. Proper utilization of the products existing is possible with overall improvements in the OEE or overall equipment effectives. An organization’s capacity can be increased with introduction of equipment, techniques, materials, increase in number of machines and workers, increase in shifts and ensuring addition of new production facilities.
In a capacity planning conference, capacity of an organization is calculated as utilization x number of shifts x efficiency and total workers or the number of machines. The strategies that are discussed in the conference are as follows. Lead strategy that refers to addition of capacity anticipating increase in demand. This is an aggressive strategy that aims to lure away customers from the competitors of a company by reducing lead time and improving level of service. This helps in reducing stock out costs. Huge capacity does not automatically mean high inventory levels; however, it can imply higher cycle stock costs. One can rent the excess capacities to other companies as well. Lag strategy refers to capacity addition only once the organization is running in full capacity. This conservative strategy decreases the risk of waste that ultimately results in low service levels. Match strategy refers to addition of small amounts of capacity with regard to changes in the market. Adjustment strategy refers to reduction and addition capacity in large or small amounts resulting from demand of customers or as a result of major changes in the system architecture.
HR practitioners in the capacity planning conference look after the issues discussed below. The practitioners determine critical role that help attaining success in business, develop plans to make sure priorities such as talent development, succession planning and training are met. Redesign of the organizational structure that align with the changing conditions in the market, collection of data to gain a better picture of the labor trends and workforce profile, identification of behaviors of the candidates as well as the key competencies of candidates such as the decision making abilities. The conferences also look into the priorities of capacity planning in course of the economic downturn.
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