Before you read the 3 Examples of Capacity Planning, you should read the first part of this article that broke down Capacity Planning in 10 Steps here: https://www.workclout.com/post/10-steps-to-create-apply-capacity-planning-for-manufacturing
If you have read it already, read on!
Capacity planning and techniques will function differently depending on production mode. Practical examples of models in capacity planning for different production modes include:
Make to Stock is common within discreet manufacturing and process manufacturing. As these operations often have complex multi-level BOMs, capacity planning must include planning for sub-processes required to produce components or assemblies for final construction. An example of this would be a production facility where single serve meal or snack kits are produced.
With each kit consisting of meat, cheese, bread and juice, a complex BOM is required to facilitate production of each. This would include the individual food types as well as tray formation and wrapping. It is also possible that these facilities would use a combination of in-house production for some parts of the kit and sub-contracted sourcing for others.
The complexity of the final product as well as the changing nature of the foods offered requires accurate BOMs, concise measurements of labor and machine capacity and the ability to changeover quickly and often. Companies with MRP systems in place could use Capacity Requirements Planning (CRP) that relies on MRP inputs and inventory to produce a capacity plan.
This type of operation could also use the rough-cut planning system of Capacity Planning Using Overall Factors, where production standards and the master schedule are used to develop a capacity plan. MTS production facilities would need to make full use of all ten steps above to develop accurate and actionable capacity plans.
By nature, make to order production modes will require less WIP and fewer processes. However, they still rely on repeatable BOM structures to produce units higher in cost, or that are not commodified or consumable goods. An example of this type of manufacturing would be a facility that produces coffee makers. With a specific product line with less BOM levels, production can be triggered by the actual order itself rather than producing to maintain a stock level for consumables.
In this mode, a factory may choose to utilize to use a rough-cut capacity planning method such as capacity bills or resource profiles. In capacity bills, the BOM and routing sheet is used to show the sequence or work center required for production along with the setup and run time. For an MTO utilizing resource bills, the same variables are used as in capacity bills but with lead time for product included in so workloads can be planned on a time scale.
MTO environments may contain sub-process production for key components and assemblies, but in the case of the example of the coffee maker manufacturer, they would also require a high degree of assembly for the final product. An MTO manufacturer would need to have tight control of its process routing and a deep understanding of resource capacity and resource utilization.
In an engineer to order production system, each unit is a unique iteration of a product. And while a BOM may be developed to guide the construction and assembly, it is usually a single level BOM or one with fewer levels. As the calculations for workloads, work centers and resource capacity must be calculated at each order, a rough-cut method such as capacity bills would be most effective in capacity planning.
An example of this type of manufacturing would be a factory that produces luxury limousines. As each finished unit is a unique iteration, the factors for each unit would need to be added together to develop a capacity plan.
Using the ten steps above, key considerations for an ETO would be in the establishment of a workload and in the document of equipment capabilities.
In the case of the limo manufacturer, while standards cannot be developed for common products as each unit is a one-off, an accurate understanding of welder capacity, paint booth dwell time and other key functions along the line may be more important to an ETO than would some other steps in determining capacity.
If you want a free consultation on how to approach capacity planning at your factory, feel free to book a time with a capacity planning expert here: https://meetings.hubspot.com/workclout/free-30-min-supply-chain-consultation
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