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Capacity Planning

Capacity Planning. 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. Diagram of Capacity. What Makes Up Capacity.

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Capacity Planning

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  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 1.5 + (150)(0.2) = 31.5 standard hours • Actual time is 31.5 / (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:

  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

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