Capacity Planning Software Helps You Stay Ahead And Prepare For All The Future Demand

By Author: Karishma Shikalgar
Total Articles: 12
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The answer to all these questions is easier than you might think. Thriving businesses of all kinds use capacity planning software to answer similar questions each day.

Meeting customer demand is a vital goal that businesses set during production. Production that involves budgets, resources, and time constraints undergo various evaluations to make sure companies use them effectively. Understanding capacity planning strategies can help the operations management team assess these resources to ensure they meet demands and increase company profits.

In this article, we describe capacity planning strategy, dive into the factors affecting it, and outline its benefits during production.

What is capacity planning?

Capacity planning is a type of process where production planning includes evaluating production capacity and workforce requirements to make sure your supply chain is fully equipped to meet future demand. This process lets businesses understand how and when to scale, identify bottlenecks, create better capacity strength, and mitigate risk within a planned period.

Factors that affect capacity ...
... planning

Capacity planning strategies help businesses prepare for the following factors that affect the demand for products:

Market trends: market volatility changes as competitors enter or leave the market. These shifts impact the amount of output the company can produce.

Industry trends: every business uses different product standards or makes changes to them. These types of industry patterns fluctuate the demand for goods. For instance, oil companies face a demand drop because of the increasing adaptability in the use of electric vehicles.

Seasonal change: businesses adjust production throughout the year following general demand patterns, such as what customers want during the holiday season. With capacity planning tools connected to your business, you can reduce or increase production during high or low demand according to the season.

Economic events: a business needs production flexibility to tackle unforeseen financial circumstances. You can try to forecast the economic conditions using capacity planning methods to understand short-term and long-term demand patterns.

Three Ways to optimize your supply chain capacity planning strategy

Measure and track essential supply chain KPIs – organizations must ensure they track the most fundamental metrics in the supply chain. If this scenario is overlooked, overall capacity planning efficiencies can be compromised in the long run. By tracking essential KPIs, businesses can optimize planning efforts to target goals, unravel the sources of bottlenecks or understocked situations, and help make better decisions for boosting profits. These key KPI parameters are inventory turnover, delivery schedules, end-to-end product lifecycle, order rates, and on-time deliveries among others.

Include holistic supply chain cost – the common mistake most businesses make is to pay close attention only to immediate production or inventory costs. They end up missing out on the bigger picture of the hidden expenses related to the supply chain. Capacity planning is affected by different variables like taxes and inventory storage within each factory. Using capacity planning tools throughout the supply chain to analyze tradeoffs between various cost factors is essential.

Focus on overall supply chain visibility – capacity planning software provides complete visibility and gives much-needed clarity on the way forward to assess the current performance of processes, identify the possible gaps, and how these move through the supply chain towards the final product. It can also support capacity planning efforts by improving the quality of individual components by applying data analytics where needed. With intelligent supply chain visibility, companies can optimize resources by lowering costs, balancing inventory spaces, and enhancing customer satisfaction.

The benefits of capacity planning for your business

Reduced stock-outs

These days, customers don’t like to wait, and if they don’t have to, they won’t. New sales channels on the internet have made it easy for customers to find products elsewhere if you’re out of stock. With the help of capacity planning software, you can efficiently predict your business capacity for future targets.

Increased delivery capacity

As online sales are growing more than ever, delivery capacity is becoming an essential and moving factor for many businesses. Many retail customers prefer to get free or one-day delivery by whatever means possible. Rough-cut capacity planning enables you to have products available for delivery whenever the order is placed, keeping your business running smoothly.

Identifies process inefficiencies

Intelligent capacity planning methods empower your business to zero in on process inefficiencies. This way, you can locate major or minute hurdles in the product pipelining and speed up the entire manufacturing-to-delivery process.

Avercast's capacity planning software (RCCP) allows you to run every aspect related to demand. With this tool, you can plan ahead and be ready for all your future customer demands. You can efficiently plan for capacity change, adjust shifts as required, and manage outsourced production. Get in touch with Avercast and book a free demo today!