Process Capacity
It refers to the production capacity of workers or machines, and is usually expressed by "hours". The Process Capacity of workers is called human capacity, while that of machines is called machine capacity.
They are calculated by means of the following formula:
Human capacity = actual working hours x attendance rate x direct labor rate x equivalent manpower
(it is obtained by converting direct labor hours of actual working hours to the capacity of a worker with normal skills)
Machine capacity = operating hours x operating rate x the number of machine
Related term: Capacity, Capacity Adjustment
FAQs
Types of Capacity Planning
Capacity planning itself can be split into three types: workforce, product, and tool. Together they ensure that you have the right amount of three main resources for the short- and long-term.
Why is capacity planning an important part of the manufacturing process? ›
Capacity planning helps manufacturers understand what their strategy for meeting demand is. It also helps them have a clear picture of what the costs and resources needed to meet their current demand will be and puts in place a structured roadmap to supply chain planning.
What are the stages of capacity planning process? ›
Planning for capacity breaks down into three steps: determining capacity requirements, analyzing current capacity, and planning for the future. To gain a better grasp on how each applies to the planning process, let us take a closer look at each one individually.
What is the first step in a manufacturing planning and control system? ›
One of the first steps in production planning and control is determining demand. Usually performed by sales and marketing, demand planning is crucial in that it determines the required production capacity and raw material requirements.
What are the 3 phases of production planning and control? ›
The three phases are planning phase, action phase and control phase.
What is the formula for capacity planning? ›
Capacity is calculated as (number of machines or workers) × (number of shifts) × (utilization) × (efficiency).
What is an example of capacity planning process? ›
Another example of capacity planning is food manufacturer that has the opportunity to supply a new retailer. They need to understand the impact of increasing production capacity on their resource requirements. They will need to secure more raw materials to produce a higher volume of product (product capacity planning).
What does a capacity plan look like? ›
In turn, capacity planning is a process that identifies whether or not you have the resources and skills to do the work, or the supply to meet the demand. In contrast to resource planning, capacity planning looks at the organizational level to forecast and ensure that businesses can keep up with customer needs.
What is capacity in manufacturing process? ›
What is Production Capacity in Manufacturing? Production capacity refers to the maximum output of manufactured goods and materials that a business can achieve. As a metric, it helps to track the highest possible output of goods that can be created based on factors like time, labor, materials, and equipment.
What are the strategic issues in capacity planning? ›
The most common challenges for effective capacity planning include balancing multiple projects and customer expectations, ensuring optimized current and future capacity, real-time data and forecasting, and efficient collaboration.
Types of Capacity
These types include design capacity, effective capacity, and actual output. Each of these types represents a different level of production capability, and understanding the differences between them can help in making more informed decisions about production planning and management.
What is the first step in the capacity planning process? ›
The first step is to understand the demand in order to start planning your capacity to meet that demand. You'll need to make estimates on what needs to be done for an upcoming project. Use expert advice, historical data and anything else that'll help you know the capacity you need to complete your project.
What are the principles of capacity planning? ›
Basics of capacity planning
Capacity planning involves analyzing historical data, forecasting future demand, and determining current capacity to make sure a business will be able to keep up with customer demand. It also helps businesses with resource planning, which is closely related.
